Ultrapar (UGPA3) Q4 2024 earnings summary

Executive summary

• Net revenue reached R$133.5 billion in 2024, up 6% year-over-year, with strong results at Ultragaz and Ultracargo, while Ipiranga faced margin pressure from unlawful fuel sector practices.

• Recurring Adjusted EBITDA for 2024 was R$5.4 billion, down 4% year-over-year, mainly due to lower Ipiranga margins and losses from Hidrovias.

• Net income for 2024 totaled R$2.526 billion, stable compared to 2023, with R$769 million distributed as dividends.

• Major investments included R$2.2 billion in 2024, with R$1.8 billion for a 42% stake in Hidrovias do Brasil and R$150 million for share buybacks.

• Governance enhancements included a new model and leadership transitions planned for 2025.

Financial highlights

• 4Q24 net revenue was R$35.4 billion (+6% vs. 4Q23), driven by Ipiranga and Ultragaz.

• Recurring Adjusted EBITDA in 4Q24 was R$1.284 billion, down 23% year-over-year, mainly due to Ipiranga and Hidrovias.

• Net income in 4Q24 was R$881 million, down 21% year-over-year, impacted by higher financial expenses and Hidrovias losses.

• Operating cash flow for 2024 was R$3.7 billion, slightly below 2023 due to higher working capital needs.

• Dividend distribution for 2024 totaled R$769 million.

Capital allocation and financing

• R$2.2 billion invested in 2024, with 59% for expansion and the rest for maintenance.

• Largest single-asset allocation in a decade: 42% stake in Hidrovias for R$1.8 billion.

• Net debt at December 2024 was R$7.8 billion (1.4x LTM EBITDA), up from 1.1x in 4Q23 due to investments.

• Share buyback program of R$150 million and R$500 million advanced to Hidrovias.

• Dividend payout ratio was about 35%, with buybacks complementing shareholder returns.