Q1 2024 Ultrapar Participações SA Earnings Call
Speaker: And moving now to slide 3, as you can see in the chart on the upper left side, our recurring EBITDA totaled R$1,306,000,000 in the first quarter of 2004, 28% higher than that of the first quarter of 2013. This increase is due to higher EBITDA of the three main businesses, especially Piranga, results that I will detail in the next slide. Utropower's net income was R$155 million, 66% higher year-over-year due to the EBITDA growth I've just mentioned and the lower net financial expense.
As you can see in the chart in the upper left side, our recurring EBITDA totaled 1.306 billion Reais in the first quarter of 24, 28% higher than that of the first quarter of 'twenty three.
Speaker: This increase is due to the higher EBITDA. The three main businesses, especially belenguer results that I will detail in the next slides.
Speaker: Net income was for 155 million reais, 66% higher year over year.
Speaker: Due to the EBITDA growth I've, just mentioned and the lower net financial expenses.
Speaker: Investments totaled R$438 million in the first quarter of 2024, an increase of 20% year-over-year, mainly as a result of greater investments at Ultra Cargo. We had an operating cash consumption of R$573 million in the first quarter of 2024, R$138 million lower than the consumption we had in the first quarter of last year, mainly reflecting the higher EBITDA of the businesses and the increase of R$265 million in draft discount operations in this first quarter.
Speaker: Investments totaled 438 million Reais in the first quarter of 24, an increase of 20% year over year, mainly as a result of greater investments at ultra cargo.
Speaker: We had an operating cash consumption of 573 million reais in the first quarter of 24 $138 million lower than the consumption. We had in the first quarter last year mainly.
Speaker: Mainly reflecting the higher EBITDA the businesses and the increase of 265 million Reais interrupt discount operations in this first quarter.
Speaker: These effects were attenuated by higher working capital at impedance. Moving now to slide four to talk about our reliability management, we ended the first quarter with a net debt of 7.8 billion reais, an increase of 1.7 billion in relation to December 23.
Speaker: These effects were attenuated by higher working capital.
Speaker: Moving now to slide four to talk about our liability management. We ended the first quarter with a net debt of $7 8 billion Reais and increase of $1 7 billion in relation to December 23.
Speaker: This increase is mainly due to the payment of dividends in March this year and the investment in working capital. We have a seasonal calendar effect in the first quarter, as you can see in the chart, resulting from the bank holiday at the end of the year. Added to this, IPTA recorded a higher level of working capital in the first month of 2024, with the effect on prices of tax-free increases, higher inventories, and lower suppliers due to the reduction in imports, which have longer payment terms.
Speaker: This increase is mainly a consequence of the payment of dividends in March of this year and the investment in working cap.
Speaker: Have a seasonal calendar effect in the first quarter that you can see in the chart, resulting from the bank holiday at the end of the year.
Speaker: Added to this Peter got recorded a higher level of working capital in the first months of 'twenty 'twenty four with the effect on prices of tech screen increases higher inventories and lower suppliers due to the reduction in imports, which have longer payment terms on our leverage went from one one times in December 20 321.
Speaker: Our leverage went from 1.1 times in December 23 to 1.3 times in March 24, due to the higher net debt that I've just mentioned, attenuated by higher EBITDA in the last 12 months. I'd like to point out that the numbers of Net Debt for the first quarter of 2024 still do not include pending receivables of R$964 million related to the sales of Occitane and Extra Pharma. As you can also see in the table at the bottom of this slide, the Net Debt in March 2024 added to the draft discount, vendor, and pending receivables of Occitane and Extra Pharma is R$8.4 billion, which is approximately R$900 million lower than the balance of the same. Moving now to the next slide, slide number five, we'll talk about another good quarter for UltraGas.
Speaker: Three times in March 24, due to the higher net debt that I've just mentioned.
Speaker: Weighted by higher EBITDA in the last 12 months.
Speaker: I'd like to point out that the numbers of net debt for the first quarter of 'twenty. Four is still does not include pending receivables of 964 million reais related to the sales of Oxycodone extra fun.
Speaker: As you can also seen the table at the bottom of this slide the net that March 24 added to the threat discount Sandler and painting receivables of Occitane and extra pharma is $8 4 billion Reais, which is approximately 900 million reais lower than the balance of the same period last year.
Speaker: Moving now to the next slide slide number five.
Speaker: Another good quarter for <unk>.
Speaker: The volume of LPG sold in the first quarter was 4% lower year-over-year due to a 6% reduction in the bottled segment on the back of lower market demand and a more competitive environment after the pass-through of tax-free increases in some segments. The bulk segment remained stable, with its growth offset by lower sales to condominiums.
Speaker: The volume of LPG sold in the first quarter was 4% lower year over year due to the 6% reduction in the bottled segment on the back of lower market demand and a more competitive environment. After the past throughout tax increases in the in some segments.
Speaker: The bulk segment remained stable with its growth offset by lower sales to condominium.
Speaker: Ultra-Gaza's GNA in the first quarter of 24 was 1% lower than that of the first quarter of 23 due to initiatives to increase operational efficiency and lower expenses on sales commissions, partially offset by higher personnel expenses, mainly resulting from collective bargaining and repayment. Utragazebida totaled 401 million reais in the quarter, 4% above that of the first quarter last year. This growth is explained by initiatives to increase efficiency and productivity implemented in the less borders, by a better sales mix, and by inflation pass-through despite lower sales volume.
Speaker: We'll try gas SG&A in the first quarter of 'twenty four it was 1% lower than that of the first quarter of 'twenty three due to initiatives to increase operational efficiency and lower expenses with sales commissions, partially offset by higher personnel expenses, mainly resulting from collective by gaining agreement.
Speaker: With regard to EBITDA totaled 401 million reais in the quarter, 4% above that of the first quarter last year.
Speaker: This growth is explained is explained by initiatives to increase efficiency and productivity implemented in the less borders by better sales mix and by inflation pass through despite lower sales volume.
Speaker: And for the second quarter, we expect Ultragas to continue its good operating performance with EBITDA similar to that of the first quarter despite seasonally higher volumes. Moving now to slide six to talk about another great result for Ultracargo. The company's average stock capacity was 1,067,000 cubic meters in the first quarter of 2004, a growth of 12% over the first quarter of 2003.
Speaker: EBIT for the second quarter.
Speaker: Ultra gas to continue its good operating performance with EBITDA similar to that of the first quarter. Despite.
Speaker: It doesn't really stronger volumes moving now to slide six to talk about another another great result for carnival.
Speaker: Company's average installed capacity was $1 million of six to 7000 cubic meters in the first quarter of 'twenty for a growth of 12% over the first quarter of 'twenty three due to the capacity additions coming from Oprah Vila do Conde and hold the Napoli terminals throughout the second half of last year.
Speaker: Due to the capacity additions coming from the Opla, Vila do Conde, and Rondonópolis terminals throughout the second half of last year. These capacity additions still had a small impact on this quarter's results and should begin to gradually contribute to the upcoming month as operations ramp up. The cubic meter sold grew 21% year-over-year, mainly due to greater handling of fuels in Santos, Vila do Conde, and Aratu and the start-up of operations in Nopla and Rondono. Trocargo's net revenues were R$263 million in the first quarter of 2024, 11% higher than that of the first quarter of 2023, as a result of higher cubic meters sold and spot sales.
Speaker: These capacity additions, we still had a small impact on the on this quarter's results and should begin to gradually contribute to the upcoming months as operations brainpower.
Speaker: The cubic meters sold grew 21% year over year, mainly due to greater handling a fuse incentives.
Speaker: And the startup of operations in our planning on the markets Trocar.
Speaker: <unk> net revenues were 263 million reais in the first quarter of 'twenty, 411% higher than that of the first quarter of 'twenty three as a result of the higher cubic meter so and spot sales.
Speaker: Combined, cost and expenses were 8% above that of the first quarter of 2023 as a consequence of higher personnel expenses, legal advisory with contractual renewal, and depreciation, in line with the capacity additions. Trocardo's EBITDA totaled R$165 million in the quarter, a 16% growth year-over-year, due to greater capacity occupancy with profitability gains, to spot sales, and productivity and efficiency gains, despite higher expenses That margin was 63% in this quarter, three percentage points above that of the first quarter of 2020.
Speaker: Combined cost and expenses were 8% above that of the first quarter of 2003 as a consequence of higher personnel expenses.
Speaker: Advisory with contractual renewal and depreciation.
Speaker: And with the capacity additions, regardless EBITDA totaled 165 million reais in the quarter, a 16% growth year over year due to greater capacity occupancy with profitability gains to spot sales and productivity and efficiency gains despite the higher expenses.
Speaker: EBITDA margin was 63% in this quarter three percentage points above that of the first quarter of 'twenty three.
Speaker: And for the second quarter, we expect Ultracargo to continue its good results with EBITDA levels close to those seen in the last quarter. And to conclude this presentation, moving now to slide 7, let's talk about Ipiranga's results. First, I'd like to draw your attention to a change we made in our report, which since the beginning of 2020 had been reported with the results of the holding company and other companies, is again consolidated into EP Dengar's results to allow comparability between test periods. We added the results of Avast-SAE in two pirangas for 2023 as well.
Speaker: And for the second quarter, we expect ultra cargo to continued good results with EBITDA levels closer to those seen in the last quarters.
Speaker: Well.
Speaker: And on page three of the earnings release, we have detailed the composition of these adjustments to allow a complete understanding. Regarding the results, the volume sold by Ipiranga in the first quarter grew by 2% over the first quarter of 2023, with a 7% growth in the Otto cycle, driven by a greater share of ethanol in the product mix, partially offset by a 3% decrease in diesel. We ended the first quarter with a net worth of 5,881 service stations, more than in December. A total of 55 service stations were added to the network during the quarter, and 51 were closed during the quarter.
Speaker: And to conclude this presentation moving now to slide seven let's talk about <unk> results.
Speaker: Furthermore, we ended the quarter with 1,532 AM-PM stores, with semi-store sales growth of 6% in the first quarter. Ipiranga's SG&A increased by 5% over the first quarter of 2023 due to higher personnel expenses, mainly increased headcount and the collective bargaining agreement, and provisions for adult full account. These effects were partially offset by lower expenses with continuous disprovision. The other operating results line totaled a negative R$165 million in the quarter, a worsening of R$26 million year-over-year as a result of higher costs with the carbon tax credit. The line of results from the disposal of assets was positive R$36 million, resulting from the sale of eight real estate assets. Ipiranga's EBITDA totaled R$819 million in the quarter.
Speaker Change: First I'd like to draw your attention to a change we made in our report.
Speaker: Recurring EBITDA totaled R$783 million, 48% higher year over year. The higher EBITDA reflects better margins mainly due to commercial environment normalization and inventory gains in the first quarter of 2024, despite three negative effects, the higher level of inventories in the sector due to distribution companies positioning for the planned tax increases in the first month of the year, due to tax distortions with emphasis on the AMAPA tax benefit, which was revoked last April, and irregularities in the biodiesel mixture, which had a share increase from 10 percent to 14 percent in the mix in the last 12 months.
Speaker: About 38, which since the beginning of 2020 had been reported with the results of the holding company and other companies.
Speaker: Is that game consolidated into <unk> results.
Speaker: To allow comparability between periods, we added the results of about <unk> <unk> or <unk>.
Speaker: Three as well and on page three of the earnings release, we have detailed the composition of these adjustments through our complete understanding.
Speaker: And for the second quarter, we do not anticipate significant inventory gains. On the other hand, we expect the normalization of the inventory levels in the sector and the reduction of the effect of tax distortions in AMAPA. Therefore, we expect profitability similar to that of the first quarter. And with that, I now conclude my presentation. And I appreciate your interest and attention. And let's now move on to the Q&A session to answer your questions. Thank you. We are going to start the question and answer session for investors and analysts now. The first question comes from Monique Grego, Italy's BBA. Ms. Grego, please.
Monique Grego: Hello, good morning. Hello everyone, thank you very much for the opportunity to ask a question. I have two questions. The first one concerns Iparanga.
Monique Grego: About the results the volumes sold by <unk> in the first quarter grew by 2% over the first quarter of 'twenty three with a 7% growth in the Otto cycle, driven by greater share of ethanol in the product mix.
Speaker: In the webcast of the previous quarter, you indicated that you expected Iparanga to reach margins aligned with the recurring margins of 2023, but the results were below what was expected. Miss Inato has just highlighted that it was a quarter with higher inventory levels and competition due to irregularities and tax discrepancies. But despite these reasons... To what extent do you think that the limited opportunities for trading may also have contributed to results below what was expected? The second question is the following.
Speaker: Actually offset by a 3% decrease in diesel we ended the first quarter with a network of 5881 service stations far more than in December 'twenty three.
Speaker: Total of 55 services stations were added to the network and 51 were closed during the quarter. Furthermore, we ended the quarter with 1530 <unk> stores with same store sales growth of 6% in the first quarter.
Speaker: <unk> SG&A increased by 5% over the first quarter of 'twenty three due to higher personnel expenses, mainly increased head count and collective bargaining agreement in provisions for doubtful accounts. These effects were partially offset by lower expenses with contingency provisions.
Speaker: The other operating results line total of negative 165 million reais in the quarter, a worsening of $26 million year over year as a result of higher causes with carbon tax credits the lineup.
Speaker: <unk> thrown the disposal of assets total policies 36 million.
Speaker: Resulting from the sale were eight real estate assets.
Speaker: If you didn't get the EBITDA totaled 819 million reais in the quarter recurring EBITDA totaled 783 million, 48% higher year over year the entire.
Speaker: The higher EBITDA reflects better margins, mainly due to commercial environment normalization and inventory gains in the first quarter of 'twenty four despite three negative effects the higher level of inventories in the sector.
Speaker: Bishop company's positioning for the planned tax increases in the first month of the year.
Speaker: Due to tax distortions with emphasis on the AMA Apotex benefit, which was reported last April and irregularities in the biodiesel mixture, which had a share increase from 10% to 14% in the mix in the last 12 months.
Speaker: And for the second quarter, we do not anticipate significant inventory gains.
Speaker: On the other hand, we expand the normalization of the inventory levels in the sector and the reduction of the effect the Texas portions in them. Upon therefore, we expect our profitability is similar to that of the first quarter.
Speaker: And with that I'll conclude my presentation and I appreciate all your interest and attention and let's now move on to the Q&A session to answer your questions. Thank you.
Speaker: And you said Amazon bought us at some point to start now the question and answer session for investors and analysts.
Speaker: First question comes from <unk>.
Speaker Change: Got it.
Speaker: How will they be.
Speaker: Awesome.
Speaker Change: Ms <unk> please.
Speaker Change: Hello, Good morning.
Speaker Change: Hello, everyone. Thank you very much for the opportunity to ask a question and I have two questions.
Speaker: The first one concerns if ranga.
Speaker: The webcast of the Pizza Squire you indicated that you expected it to ranga to reach.
Speaker: Margins are light with the recurring March itself, 20th century, but the results were below what was expected.
Speaker: That well has just highlighted.
Speaker: It was a quarter with high inventory levels on competition due to irregularities in tax discrepancy.
Speaker: But despite those reasons.
Speaker: What extent do you think that.
Speaker: The limited opportunities of trading.
Speaker: Made also have contributed to results below what was expected.
Speaker: The second question is the following.
Lyndon: Could you please share with us, I know it's early, but could you please share with us more about the impact of everything that's happening with the floods in the south of Brazil, especially with Ipranga and Outragaz? And what kind of impact are you anticipating for the upcoming months because of the floods in the south of Brazil? This is Lyndon speaking. Let me tell you about the whole quarter. Arbitration started in January at break-even levels, and gradually, it was closing.
Speaker: Could you please share with us I know, it's early but could you. Please share us more about the impact of everything that's happening with the floods in the south of Brazil, especially with the brand and ultra gas.
Lyndon: And what kind of impact are you anticipating for upcoming months because of the floods in the south of Brazil.
Speaker Change: Thank you.
Monika: Hi, Monika this.
Lyndon: This is Linda and speaking.
Lyndon: Let me tell you about the whole quarter.
Lyndon: Arbitration started in.
Lyndon: Generally our break even levels and gradually it was.
Lyndon: Closing.
Lyndon: It was somewhat close by the end.
Lyndon: It was somewhat closed by the end, but at the same time, despite it, this market had an excess supply of two reasons. First, because there was a perspective of gaining inventory, with all the different syntaxes in January and February, so everyone increased their inventory levels for a quarter that. Normally, as part of the season, it's lower or it's slower. And in the first water, there was the air.
Lyndon: But at the same time.
Lyndon: Despite it.
Lyndon: The DSO market had a access.
Lyndon: Supply for two reasons first.
Lyndon: Because there was a perspective of gaming inventory.
Lyndon: With all of the difference in taxes in January and February.
Lyndon: So actually one increase their inventory levels.
Lyndon: Score a quarter that.
Lyndon: Normally as part of the season is slower or is slower.
Lyndon: And in the first Florida that was it.
Lyndon: Adversity, which was widely discussed, which was the special regimen at Amapa. Whitman 930 Reals per square meter lost. That was..., and it has impacted our margin forecast. Guess I would not play.
Lyndon: Adversity, which was widely discussed which was the special regimen at Mopani.
Lyndon: Which meant 930.
Lyndon: Real spur square meter loss.
Speaker Change: That was it.
Lyndon: Inventory levels are gentlemen, it was expected, but not on my Palm Oh, we didn't expect that tax discrepancies to be present and it has impacted our margin forecast.
Speaker Change: Okay. So eloquently.
Lyndon: We had June, really support and be able to compete; that impact on the tax exemption impacted our stations. Very important stations lost volume and margins. So to preserve businesses, our own contracts with service stations, we've brought down our margins while maintaining volume levels. And that was the right decision, in my opinion, because if you analyze the first quarter over the first quarter, 24, we can see a volume gain of 2% and very little impact in terms of market share.
Lyndon: We had to you.
Lyndon: Really is support and be able to compete.
Lyndon: Okay.
Lyndon: Yeah.
Lyndon: That impact on.
Lyndon: The tax exemption impacted our stations very important stations have lost volume and margins.
Lyndon: So to preserve businesses.
Lyndon: Specially.
Lyndon: Our own contracts if service stations.
Lyndon: <unk> brought down.
Lyndon: Our margins maintaining volume levels.
Lyndon: And that was the right decision in my opinion, because if you analyze the first quarter over the first quarter 'twenty four we can see a volume gain of 2%.
Lyndon: And very little impact in terms of market share.
Lyndon: Therefore, it was a strategy to maintain our business. Now, concerning opportunities of trade and gain, I wouldn't say we have anything there. It's an important means to us. It has helped us, and we are going to carry on with the same strategy, with the same belief about how trading can help us in our business. Now concerning the south of Brazil. The material impact on Ipiranga is not relevant, but this is not a material discussion, but a discussion about relevance.
Lyndon: Therefore, it was a strategy to maintain our business.
Lyndon: Okay.
Lyndon: Now concerning opportunities job trading gain.
Lyndon: Don't say well have anything there it's an important.
Lyndon: Means to us it has helped us and we are going to.
Lyndon: Carry on with the same strategy with the same beliefs about.
Lyndon: How trading can help us in our businesses.
Lyndon: Now concerning the south of Brazil.
Lyndon: The material impact over a brand guy is not relevant but this is not a material discussion a discussion about relevance.
Lyndon: Would like.
Lyndon: I would like, To emphasize, and normally we have high participation, I would like to say that IPRANGA. That's where we're going to do is where Paranga started. IPRANGA is fully involved in the process of providing support to the populations in the region, making donations of fuel, water, food, and being part of some rescue activities.
Lyndon: Do you emphasize that normally we have a high participation.
Lyndon: I'd like to say that eight ranga.
Lyndon: That's where we went to Jewish there in Paraguay started.
Lyndon: The brand is fully involved in the process of providing support to the population from the region, making donations and she'll water food being part of some rescue activities.
Lyndon: Today we've set up a new logistics to support physicians to take them to Rio Grande do Sul, carry medications, and other extremely needed foods. We are also working with NGO Assam Cidadania. And everyone is invited to make a donation, and then Ipranga matches what is donated by the population. There is a link on Iperanga's Instagram, and on my own personal account. Just click on it, and I know I can count on everyone's collaboration.
Lyndon: Today, we've setup I know logistic to support physicians to take them to Rio Grande you just show carry medications and other H a needed.
Lyndon: Rich.
Lyndon: We are also working with Ngls sounds cydonia.
Lyndon: Everyone is invited to make a domination and then if ranga matches what is dominated by the population.
Lyndon: There is a link and it Broncos Instagram in my own personal account, just click and I know I can count on everyone's collaboration.
Luis Carvalho: The state needs help, and the sooner... they can resume their lives, their activities in the state, the better for everyone. And this is what we should all focus on. Great, Lyndon. Thank you very much for your detailed answer, and congratulations on your initiatives there in the region. Thank you. The next question comes from Luis Carvalho, UBS. Hello. Thank you very much for taking my question. I have two quick questions. First, to load them.
Lyndon: The state needs help and the sooner they.
Luis Carvalho: They can resume their lives their activities in the state.
Luis Carvalho: The better to everyone and this is what we should all focus on.
Luis Carvalho: Great Linda Thank you very much for your detailed answer.
Luis Carvalho: And congrats on your initiatives there in the region. Thank you.
Luis Carvalho: The next question comes from Luis Carvalho UBS.
Luis Carvalho: Okay.
Luis Carvalho: Hello.
Luis Carvalho: Thank you very much for taking my question I have two quick questions.
Luis Carvalho: First to alerts.
Luis Carvalho: With BN.
Speaker: We've been emphasizing this strategy of capital allocation in the company. You've had a very good turnaround in the main businesses of the company. And maybe now you can give us some more details about the recent... So, tell us what you expect in terms of synergy, return on investment, and what are the main metrics that should be considered when trying to understand the investment in Hydrovias. I'd like to hear more about other opportunities as well. The deal of his reviews does not impact the leverage of the company, and you have a very comfortable indebtedness level.
Luis Carvalho: And we've been emphasizing that strategy of capital allocation of the company you have had a very good turnaround and the main businesses of the company.
Speaker: And maybe now you can give us some more details about the recently.
Speaker: Acquisition of asset at <unk>, Brazil part of the interest of headroom here with Brazil, So tell us what you're expecting in terms of synergy return on investment what are the main metrics.
Speaker: That should be considered when trying to understand the investment in <unk>.
Speaker: I would like to hear more about other opportunities as well.
Speaker: The deal of you is obvious does not impact the leverage of the company and you have a very comfortable indebtedness level.
Speaker: Secondly, concerning ultra-gas, we've seen a recovery in the whole industry, especially with the privatization of leaky gas. But speaking with other players in the area, we've seen some reduction in prices. You said entrance would be lower. I would like to understand. How are you understanding that broic dynamics for ultra-gas?
Speaker: Secondly concerning natural gas, we have seen a recovery.
Speaker: Of the whole interest, especially with privileged session of liquid gas.
Speaker: But sticking with other players in the area.
Speaker: We've seen some reduction of prices.
Speaker: You've said.
Speaker: That the ROIC of new.
Speaker: And then should be lower.
Speaker: And limiting interested parts.
Speaker: I would like to understand.
Speaker: How are you understanding that ROIC dynamics for ultra gas.
Speaker: Is it at the same level as we've been observing, or do you expect it to be reduced? Thank you. Concerning Hydrovias.
Speaker Change: It's at the at the same level as we've been observing or do you expected to be reduced thank you.
Speaker: Okay.
Speaker: Concerning hydro V S.
Speaker: We've been as part of the process of increasing our shares, getting to a maximum of 40%. The asset has a number of market opportunities, in our opinion. There is a synergy of knowledge, which is very relevant for IPRANGA and for Ultracargo.
Speaker: We've been as part of the process of increasing our.
Speaker: The shares getting to it makes a ton of 40%.
Speaker: The asset has a number of market opportunities in our opinion.
Speaker: There is a synergy of knowledge.
Speaker: Which is very relevant for it it Brenda for ultra cargo.
Speaker: The north region transportation is very relevant, and the area will probably increase, really using that crop and off-crop period in mattow growth. So we think the investment has been very positive, as I've told you before.
Speaker: The North region transportation is very relevant in the area will probably increase.
Speaker: Really using that crop and of crop period in Mato Grosso.
Speaker: So we think the investment has been very positive as vital as I've told you before.
Speaker Change: I don't hate reviews.
Speaker: has a motto where they grow in scale and operationally, and I believe we can help a lot, as it's a publicly traded company. I don't think it's on us to make any comments. They will make comments when the right time comes.
Speaker: Has the motto.
Speaker: Where they grow in scale and operationally and I believe we can help a lot.
Speaker: If it's a publicly traded company.
Speaker Change: I don't think we this is.
Speaker: On us to make any comments they would make comments when the right time comes.
Tabar Zahra: Let me now hand it over to Tabar Zahra to make the comments about UltraGas. Thank you for the question. In our opinion... We've maintained the strategy, still operating in the segments that we've prioritized, and working on operational efficiency. The market has a number of cycles.
Speaker: Let me now hand, it over to Deborah to make the comments about ultra gas.
Tabar Zahra: Thank you for the question.
Tabar Zahra: Okay.
Tabar Zahra: In our opinion.
Tabar Zahra: We've maintained the strategy.
Tabar Zahra: Still operating in the segments that we've prioritized.
Tabar Zahra: Working on operational efficiency the market has a number of cycles.
Tabar Zahra: We want to be closer to our clients, so we are developing our network of resellers. We are expanding our network of resellers There are situations going on in the market, as you pointed out, but I think that we are on the right track focusing on customers and relationships with the network. And we can see... a strengthening of commercial relationships and expansion of that in the upcoming years. This is the best strategy for us. Great, thank you. If I could only go back, Luke.
Tabar Zahra: We are going to be closer to our clients developing our network of resellers.
Tabar Zahra: Okay.
Tabar Zahra: We are expanding our network of resellers.
Tabar Zahra: There are situations going on in the market as you pointed out but I think that we are on the right track focusing on customers and relationships with the network.
Tabar Zahra: And we can see.
Tabar Zahra: Anthony of commercial relationship and expansion of that in upcoming years.
Tabar Zahra: This is the best strategy to us.
Tabar Zahra: Yeah.
Luke: Great. Thank you if I could go back <unk> and <unk>.
Speaker: At this level of leverage, do you expect the investment in Hydrovias to mature, or are you already open to other opportunities concerning your level of leverage in the company? We want to expect and develop further the investment in Hedrovias, but we are also open to other opportunities. Thank you.
Speaker Change: This level of leverage do you expect to mature the investment of it reveals or are you already open for other opportunities concerning your level of leverage.
Speaker: Of the company.
Speaker: We want to make fact and develop further divestment of headroom there, but we are also open to other opportunities. Thank you.
Gabriel Barra: The next question comes from Gabriel Barra, CT. Thank you for taking my question. There are two important points, which are follow-ups to some extent of the previous questions. First, about ultra-gas.
Speaker Change: The next question comes from Gabriel Barra City.
Gabriel Barra: Yeah.
Gabriel Barra: Thank you for taking my question.
Gabriel Barra: There are two important points.
Gabriel Barra: Which are follow ups to some extent of the previous questions first about ultra gas.
Speaker: We've seen lower volumes in bottles. Based on what Bissonnato has said about the dynamics for the next quarter, maybe there are going to be higher volumes with stable results that would be in line and similar to the previous quarter. So I'd like to understand in the mid and long term, are there any initiatives that will get more mature throughout the years? What can we expect in terms of volume and margins looking ahead in recent conference calls?
Gabriel Barra: We've seen lower volumes in bottle.
Speaker: Operations and.
Speaker: Based on what <unk> has said about the dynamic for the next quarter, maybe they are going to be higher volumes with stable results.
Speaker: That would be in line and similar to the previous quarter, So I'd like to understand in the Midland mobile charm.
Speaker: Any initiatives.
Speaker: That will get more matured throughout the years, what can we expect in terms of volume and margins looking ahead.
Speaker: In recent conference calls in the Rosetta has said that.
Speaker: And Tabazhara has said that maybe we shouldn't expect such high margins as we've had in previous years. But what can we expect for 2025, 2026? Now thinking about Ipranga and going back to the first question we had today, I recall Pesenato talking about the margins at the end of February, thinking about margins aligned with the average of the year. But the negative impact was all concentrated in March, a month where there was not that much visibility. And this is why I decided to ask you. Amapá was one of the main detractors of margins in the quarter.
Speaker: Maybe we should then expect such high margins as we've had in previous years, but what can we anticipate for 'twenty five 'twenty six.
Speaker: Yes.
Speaker: Now thinking about it Braga and going back to the first question I had today.
Speaker: I recall pits and onto the talking about the margins in the end of February.
Speaker: Thinking about margins aligned with the average of the year, but then negative impact was all concentrated in March.
Speaker: A month, where there was not that much visibility.
Speaker: And this is why I decided to ask you.
Speaker: APA was one of the main detractors of margin in the quarter.
Speaker: And.
Speaker: Um, that was just. Most of the month of April was also under the effect until, finally, the injunction was passed in the court. So can you tell us something about the margins at the beginning of this next quarter? How are you doing with that? I think the dynamics now are much better than what used to be in the past, but what can you anticipate in terms of short-term and also mid-term? Thank you. This is Tampajaras speaking.
Speaker: There was just.
Tampajaras: Most of the month of April has also been another fact until finally, the injunction was best in the court. So can you tell us something about the margins in the beginning of this next quarter. How are you doing with that.
Tampajaras: I think the dynamics now is much better than what it used to be in the past.
Speaker: But.
Tampajaras: What can you anticipate in terms of short term and also meet them. Thank you.
Speaker Change: This is <unk> speaking.
Tampajaras: Based on what I've said before, we have the same strategic view; we have long-term initiatives. You mentioned one, capturing financial data, exactly what we have planned. But there is still room every single quarter to expand further.
Tampajaras: Based on what I've said before.
Tampajaras: We have the same strategic.
Tampajaras: The view, we have long term initiatives.
Tampajaras: You mentioned one capturing.
Tampajaras: Financial.
Tampajaras: Efficiency with Matt.
Tampajaras: Exactly what we have planned.
Tampajaras: But there is still.
Tampajaras: Room every single quarter to expand further in terms of profitability, we can see a gradual improvement.
Speaker: In terms of profitability, we can see a gradual improvement, but in the coming years. We believe we can go deeper and build something else in the long term. There is huge potential for the company, in our opinion. You were right. March was the worst month, says Linden.
Speaker: But in upcoming years.
Speaker: Okay.
Speaker: We believe we can go deeper.
Speaker: And viewed something else in the long term there is huge potential for the company in our opinion.
Linden: You are right.
Speaker: March was the worst month said ethylene then there was an impact in January and February, but if things got worse in March.
Lyndon: There was an impact in January and February, but things got worse in March and, yes, it invaded the month of April until that special tax regimen was revoked. We now expect a natural recovery once it's over. Thank you. The next question comes from Vicente Falanga, from Bradesco. Hello. Good morning.
Vicente Falanga: And yes, it invaded the month of April until that special tax regimen was revoked.
Vicente Falanga: We expect now natural recovery once it's over.
Vicente Falanga: Thank you.
Vicente Falanga: The next question comes from the centre for longer Bradesco.
Vicente Falanga: Hello. Good morning, Thank you for taking my question.
Vicente Falanga: Thank you for taking my question. I would like to insist, once again, on the ultra-gas markets. You mentioned in the release that the competitive environment is somewhat tougher. Is there anything that concerns you? Have there been some players acting not very rationally? Have you lost market share? And, if yes, how are you planning to recover that?
Vicente Falanga: I would like to insist once again on ultra gas market.
Vicente Falanga: You've mentioned in the release that the competitive environment is somewhat tougher is there and you see that concerns you.
Vicente Falanga: Has there been some players that gene not very rationally have you lost market share and if yes. How are you planning to recover that is it only price are going to do anything else.
Speaker: Is it only price? Are you going to do anything else? This is the topic that I would like to hear more about. And finally, about ethanol, which is now part of the tax reform. It's going to go into effect as of 2027.
Speaker: This is the topic that I would like to hear more fraud, and finally about ethanol.
Speaker: Which expired now of the tax reform.
Speaker: It's going to go into effect as of 'twenty to 'twenty seven.
Speaker: Do you believe that it can be anticipated to some extent? things that have been considered for a while, and they would be somewhat simple to implement. Let me start with UltraGas, especially the water. In our opinion... It was a competitive quarter.
Speaker: Do you believe that it can be anticipated to some extent.
Speaker: Because this is a mechanism.
Speaker: That have being considered for a Y O N O would be somewhat simple.
Speaker: To implement.
Speaker: Let me start with ultra gas.
Speaker: Especially about the quarter.
Speaker: In our opinion.
Speaker: It was a competitive quarter.
Speaker: There were some problems with taxes that led to price increases in the market. We see increased competitiveness, especially in the bottle segment. And we still maintain our strategy of strengthening and protecting our network. We are expanding our network of resellers, having a stronger network, expanded to be more and more competitive, and also a progression in operational efficiency. If we have a strong position in the bottled area and an expanded network, we can keep on competing at a good level. The last point about that monophase.
Speaker: There were some problems of Texas.
Speaker: That has led to price increases in the market.
Speaker: We see increased competitiveness, especially in the bottled.
Speaker: Segment, and we still maintain our strategy of strengthening and protecting our network.
Speaker: We are expanding our network of resellers.
Speaker: Having a stronger network.
Speaker: And we went to.
Speaker: Really.
Speaker: Expanded to be more and more competitive.
Speaker: And also a progression in operational efficiency.
Speaker: If we have a strong position in the bottled area, an expanded network of weekend keep on competing at good level.
Speaker: The last point about <unk>.
Speaker: That mono phase.
Speaker: Tax Understanding, It has proved to be very effective in proving the tax rate, improving competition, and everything. Now the industry is considering that, and it makes sense. And just expand that to hydrated ethanol.
Speaker: Tax understanding.
Speaker: It has proved to be very effective improving.
Speaker: Tax rate improving competition and everything.
Speaker: Now the industry is considering that it makes sense.
Speaker: And just expand that you'll hydrated ethanol.
Speaker: And that makes sense for all players, the government, manufacturers, distributors, everyone. What I can tell you is that... There are some discussions of possibly anticipating that having a unified system for the whole process. It shows there is a difference in the level at which taxes are collected.
Speaker: And that makes sense.
Speaker: All players the government manufacturers distributors everyone.
Speaker: What I can tell you is that.
Speaker: There are some discussions of possibly anticipating that having a unified system for the whole process.
Speaker: And if you feel there is a difference said what level the taxes are collected.
Speaker: If it's at the consumption level or at the consumption point. These are just technical issues, but as it's part of the tax reform, it's going to go into effect anyway.
Speaker: If it's at the consumption level or at the consumption point. These are just technical issues, but.
Speaker: As its part of the tax reform, it's going to go into effect anyway. It does makes sense to you or.
Speaker: It does make sense to possibly anticipate that. We believe that it's going to happen. Thank you. The next question comes from Bruno Montanari of Morgan Stanley. Please go ahead.
Bruno Montanari: Possibly anticipate that we believe that's going to happen.
Bruno Montanari: Thank you.
Speaker: The next question comes from Bruno Montanari of Morgan Stanley.
Bruno Montanari: Please go ahead.
Bruno Montanari: Hello. Good morning. Thank you for taking my question. First,
Bruno Montanari: Hello. Good morning, Thank you for taking my questions first.
Speaker: Level of inventory. Especially for diesel. And to the end of the quarter. Do you expect to have inventory levels within your expected range and then be able to really compare things around it?
Bruno Montanari: Level of inventory.
Bruno Montanari: Especially for diesel.
Bruno Montanari: Until the end of the quarter.
Bruno Montanari: Do you expect to have inventory levels within your.
Bruno Montanari: Expected range, and then be able to really compare thanks Ira.
Speaker: We've been hearing from different players about the importance of agribusiness, and Ultrapart was one of the first players to focus on this industry. In your opinion, where can you really get differentiated concerning agribusiness and other businesses? How can you really stand out and set apart? What are the strengths that can really provide you an opportunity to really surf the wave expressly and successfully?
Bruno Montanari: We've been hearing from different players about the importance of our agri.
Speaker: Agribusiness and ultra fired was one of the first players to focus on this industry.
Speaker: In your opinion, where can you really.
Speaker: Get.
Speaker: Differential differentiated concerning agribusiness and other business, how can you really stand out and set apart what are the strengths there.
Speaker: That.
Speaker: And really provide you an opportunity to really serve the wave expressly in successfully.
Speaker Change: Thank you.
Speaker: Thank you. Well, Bruno, the inventory levels are going down compared to the pigs. There has been a decrease towards what would be a normal level, and yes.
Speaker Change: Well Bruno the inventory levels are going down.
Speaker: Compared to the peak.
Speaker: There has been a decrease towards what would be a normal level and yes.
Speaker Change: We believe.
Speaker: That by the end of the quarter, these levels will be within the normal range. From a macro perspective, everyone says that agribusiness is more resilient; it goes through economic crises, it does not depend on domestic GDP.
Speaker: That by the end of the quarter this levels will be within the normal range.
Speaker: In a macro perspective.
Speaker Change: Hello, everyone.
Speaker: Everyone says that agribusiness is more resilient it goes through economic crisis. It does not depend on.
Speaker: Domestic GDP.
Speaker: Agribusiness is tough. Our investments in Hydrovias, of course, mean we want to have stronger links with agribusiness, but all companies have some strategies focused on all industries but also with agribusiness. Outro cargo of going, into the field and terminals in the countryside area, has been the provision of LLL, which is a Nipiranga company that provides really services to agribusiness, which has developed great customers and created very good relationships with large operators in the Center West. And Ultragas has done a number of works in rain drying and others. Bringing efficiency and low cost to regions that are historically involved with agribusiness.
Speaker: Agribusiness is.
Speaker: Up.
Speaker: Our investments in he'd Ravi is of course means we want to have stronger links.
Speaker: With <unk>.
Speaker: <unk> business.
Speaker: But all companies have some strategies focused.
Speaker: To all industries, but also with agribusiness.
Speaker: Altra cargo of Boeing.
Speaker: And do you feel and sure.
Speaker: Domino's and the countryside area.
Speaker: The provision of L. L L, which is a any brunger company that provides really services to agribusiness.
Speaker: Which has developed great customers and created very good relationships with large operators in the central West.
Speaker: Dry gas.
Speaker: Has the number of words and grain.
Speaker: Grain dry and others.
Speaker: Bringing efficiency low cost.
Speaker: In regions that are.
Speaker: Historically votive agribusiness.
Speaker: There is no silver bullet there, of course. Well, I can simply do it, and everything will become just a company focused on agribusiness. No, of course not.
Speaker: There is no silver bullet there of course.
Speaker: Well I can simply do it and never saying well become a just the company focused on agribusiness no of course not.
Speaker: I wouldn't say there isn't one single sentence to sum up our strategy. Thank you, Lutz and Lyndon. Thank you for your answer.
Speaker: I wouldn't say there is.
Speaker: Not one single centers to sum up our strategy. Thank you Louis and linen Brendan Thank you for your answers.
Speaker: The next question is by Leonardo Marcondes, Bank of America. Hello, good morning.
Speaker Change: The next question is Milo neither Mark <unk> Bank of America.
Leonardo Marcondes: Thank you for taking my question. The first question concerns IPRANCA margins, and I apologize, Lyndon. But the margins of the second quarter will be similar to those of the first quarter. Did I get that right? Bye!
Leonardo Marcondes: Hello. Good morning, Thank you for taking my question.
Leonardo Marcondes: The first question concerns, if ranga margins and I apologize Linden, but the margins of the second quarter will be similar to those of the first quarter did I get that right.
Leonardo Marcondes: But.
Speaker: It will be a healthier landscape, so to speak, right? because of the revocation of the special regimen in NAMAPA and because of the market at large. Can you... tell us a bit more about that? Have you seen any other factors pressing down margins in the quarter? The second question concerns your branded unit. Your liberation strategy ended at the end of last year.
Leonardo Marcondes: It will be a healthier landscape so to speak right.
Speaker: Because of the relocation of the special regimen enamel fine because of the market at large.
Speaker: Can you.
Speaker: Tell us a bit more about that have you seen any other factors pressing down margins in the quarter.
Speaker: The second question concern your branded units.
Speaker: The your exploration strategy ended in the end of last year.
Speaker: So, how are you thinking about this new... Branded stations, do you expect it to be about 5,900 stations, or would you like to get any higher share in this area? Well, yes, we expect to have similar margins in the second quarter because there is no gain in inventory. Even by improving...
Speaker: So how are you thinking about the new.
Speaker: Branded stations do you expected to be about 5900 stations or would.
Speaker: Would you like to get any higher share in this area.
Speaker: Well.
Speaker Change: Yes, we expect to have similar margins in the second half.
Speaker: Quater because there is no gaining inventory even by improving.
Speaker: The environment. There is not going to be the benefit that we expected in terms of tax. In terms of our brands, This is a strategy we've been sharing with you. We keep on investing. We keep on doing business very selectively. And we are maintaining our plan. The sales we had to do are completed.
Speaker Change: The environment.
Speaker Change: There is not going to be the benefit that we expected in terms of tax.
Speaker: In terms of our branded <unk>.
Speaker: Stations.
Speaker: This is the strategy will be sharing with you we keep on investing we keep on doing business very selective Lam.
Speaker: And we are maintaining our plan.
Speaker: The thing is we had to do or had to do are completed now it's just regular turnover of businesses will keep on EV.
Speaker: Now it's just a regular turnover of businesses. We'll keep on investing, but nothing really abnormal, just.
Speaker: Investing.
Speaker: But nothing really abnormal just.
Speaker: Fine.
Speaker: Fine. That's great. Thank you for your answers.
Speaker Change: That's great. Thank you for your answers.
Regis Cardoso: The next question comes from Regis Cardoso, XP. Hello. Good morning, everyone. Thank you very much for taking my questions.
Speaker Change: The next question comes from registered Those'll XP.
Regis Cardoso: Hello, Good morning, everyone. Thank you very much for taking my questions.
Speaker: Congratulations on your efforts to help the people in the flooded area of Rio Grande do Sul and also for your investments in Hidrovias. I'd like to ask about the echo story of hipranga going from the short term and looking ahead to a five-year perspective. What do you think will be the, sorry, will there be an expansion of profitability turnaround? Do you expect to grow volumes or have diversification? I'd like to hear that from you, in the vestments of Idruviya.
Regis Cardoso: Congrats on your efforts to help the people in the floods the.
Speaker: Flooded area frequented vasu and also for your.
Speaker: Our investments in he drove E S.
Speaker: I would like to ask about the eco story of hip Ranga going from the short term and looking at how do we five via perspective.
Speaker: But what do you think will be is as I'm sure you will it there will be an expansion of our profitability turnaround do you expect to grow volume.
Speaker: Have a diversification.
Speaker: I would like to hear that from you.
Speaker: And divestments of age Avia.
Speaker: There is a level of exposure to agribusiness. Does it make sense for UltraPAR to consider additional assets in this area, expand its position to vegetable oils or grains, anything outside oil and gas? Thank you.
Speaker: If there is a level of exposure to agribusiness.
Speaker: Does it make sense for ultra bar to consider additional assets in this area expense expand its positioned to VAG, though vegetable oils or grains anything outside oil and gas.
Speaker Change: Thank you.
Speaker Change: Well Register.
Speaker: Our story has been consistently told throughout the years, working focused on the four pillars which are essential to our business. It's not a turnaround story anymore because it has already happened. Now it's continuous improvement. The four pillars are going to keep on being emphasized so that we can gain operational excellence, or operational excellence. I'm not going to repeat what I've said on our calls on Ultra Day. So I think, yes, we are gaining operating efficiency based on the plan that you are all familiar with.
Speaker: Our story has been consistently told throughout the years.
Speaker: Working focused on the four pillars, which are essential to our business it.
Speaker: It's not a turnaround story anymore.
Speaker: Because.
Speaker: It has already done now it's continuous improvement the four pillars are going to keep on being emphasized.
Speaker: So that we can gain in operational excellence.
Speaker: Our operating excellence I'm, not going to repeat what I've said.
Speaker: In our calls in Ultra day.
Speaker: So I think as we are gaining operating efficiency.
Speaker: Based on the plan that you were all familiar with.
Speaker: Concerning exposure and other positions beyond oil and gas, we've been considering maybe more than a dozen targets in the last 12 months. Oh, Chicago going into solid bulk, for grains, for fertilizer, for supply, does make sense.
Speaker: Concerning ex Osha and other positions beyond oil and gas.
Speaker: With Dan was considering maybe more than a dozen targets in the last 12 months.
Speaker: We think that.
Speaker: Altra cargo going into <unk>.
Speaker: Solid bulk.
Speaker: For grains for fertilizer for supply does make sense.
Speaker: A good strategy has to be designed in advance, but actions have to match the opportunities. Good morning. And I'm speaking too far away from the microphone, indeed.
Speaker: A good strategy.
Speaker: Has to be designed in advance but actions have to match the opportunities.
Speaker Change: Good morning.
Speaker: And I'm speaking too far away from the microphone indeed.
Speaker: We are not looking. We do not want to only grow. We want to generate value. This is always going to be on our radar.
Speaker Change: We are not looking.
Speaker: We do not want do you only grow we want to generate value. This is always going to be in our radar.
Speaker: So that's what we want. Good. The next question comes from Rodrigo Almeida in Santander. Hello. Good morning, everyone.
Speaker Change: So that's what we want good thank you.
Rodrigo Almeida: The next question comes from Rodrigo Almeida Santander.
Rodrigo Almeida: Hello, Good morning, everyone.
Rodrigo Almeida: I'd like to go back to the topic of investment and capital and hear more. A piece of news saying that you were thinking about gas production and also gas that was not really excluded from your strategy. What can we anticipate looking ahead and also with your acquisition of Hydrovias and thinking about others.
Rodrigo Almeida: I'd like to go back.
Rodrigo Almeida: The topic of our investment in capital and hear more about.
Rodrigo Almeida: About.
Rodrigo Almeida: A.
Rodrigo Almeida: A piece of news, saying that you were thinking about gas protection and ultra gas that was not really excluded franyo strategy.
Rodrigo Almeida: What can we anticipate looking ahead and also.
Rodrigo Almeida: With the your acquisition of <unk> and thinking about others.
Speaker: Leverage is within controlled levels. So what can we expect from shareholders? Yes, more dividends, but Do you have any opinion about buying back? Do you discuss it internally? It also helps us. Let me answer the question about ultra-gas.
Rodrigo Almeida: Leverages within controlled leverage is within control levels. So what can we expect it for shareholders, yes, more dividends, but.
Speaker: Do you have any opinion about buying back.
Speaker: Do you discuss it internally it also helps us.
Speaker: Let me answer the question about ultra gas.
Speaker: Our strategic path is what with design before.
Speaker: We've been trying to identify other synergies.
Speaker: We are just thinking about commercial relationship using our bran and capillarity to bringing more complete solutions.
Speaker: To our customers.
Speaker: And constantly looking for additional opportunities for ultra gas, we are being very close attention and designing our strategy.
Speaker: Our strategic path is what we've designed before. We've been trying to identify other synergies; we are just thinking about commercial relationships, using our brand and capillarity to bring more complete solutions to our customers. And constantly looking for additional opportunities. For UltraVast, we are paying very close attention to and designing our strategy. Good morning, Rodrigo. This is the Senator speaking, saying that our comfort level of leverage is 1.5 times. And based on that, we can think about whether there are projects that would make sense to maintain resources. If not, are resources in cash?
Speaker Change: Good morning Rodrigo.
Speaker: This has been sent out a sticky.
Rodrigo Almeida: Just to talk about dividends.
Rodrigo Almeida: We believe.
Rodrigo Almeida: That's our comfort level of leverage is 115 times.
Rodrigo Almeida: And based on that we can think whether they are.
Senator: Projects that it would make sense to maintain resources if not of resources in cash if not we would share dividends that's it.
Speaker: If not, we would share dividends. That's it. Just a follow-up. Do you have any defined opinion about buying back shares? In Brazil, there is no tax benefit of purchasing back rather than sharing dividends. We prefer to share dividends, and then our shareholders decide if they want to buy back or if they simply want to invest the dividend anywhere else.
Speaker: Just a follow up.
Speaker: Do you have any defined opinion about buying back.
Speaker: Sure.
Speaker: In Brazil, there is no.
Speaker: Tax benefit of a purchase Zhang.
Speaker: Buyback rather than sharing dividend, we prefer to share dividends and then our shareholders decide if they want to buy back or if they simply want to invest the dividend anywhere else.
Rodrigo Picenato: As there are no further questions, I would like to hand it back to Rodrigo Picenato for his closing remarks. Well, thank you all very much for your questions, for your attention once again, and see you in the next quarter. Questions which were not answered will be answered later to you through our Investors Relations Officer. Thank you. Our conference call is closed now. Thank you all very much. Have a great day. Thank you.
Speaker: As there are no further questions I would like to hand, it back to Rodrigo pits and ASO for his closing remarks.
Rodrigo Picenato: Well. Thank you all very much for your questions for your attention once again and see you in the next quarter.
Speaker Change: Questions, which were not.
Rodrigo Picenato: And third will be later answer to you through our Investor Relations officer. Thank you.
Rodrigo Picenato: Our conference call with close now thank you all very much.
Rodrigo Picenato: Have a great day. Thank you.