Q4 2024 Ultrapar Participações SA Earnings Call
Welcome cheese Ultra posh fourth quarter to 94 results conference call.
The results to a simultaneous webcast that maybe accessed to ultra parts website at <unk> Dot Ultra Dot Gunther D R and M Z IQ platform.
Speaker Change: The presentation will be conducted by Mr. Rodrigo <unk>, Chief financial and Investor Relations Officer.
Speaker Change: And the Q&A session, we will have the presence of Mr. Marcos Lutz Ultra Bos CEO and the Ceos of Ultra Gadsden Ultra cargo Derbyshire Bertelli and this shoe amaral respectively.
Speaker Change: But we also have Mr. Pedro Gaddis, and Sebastien for Kim CFO and VP of operations of <unk> Branco, respectively I.
Speaker Change: I would like to inform you that this event is being recorded and all participants will be listen only mode. During the company's presentation.
Speaker Change: After <unk> remarks, there'll be a Q&A session at this time further instructions will be given.
Speaker Change: We would like to remind you that participants of the webcast may submit their questions through our website.
Speaker Change: Webcast by submitting their questions.
Speaker Change: The replay of this call will be available.
Speaker Change: Immediately after four seven days before proceeding we would like to state that forward looking statements are being made under the safe Harbor of the Securities Litigation Reform Act of 1996 four.
Speaker Change: Forward looking statements are based on the beliefs and assumptions of ultra power management and <unk>.
Speaker Change: Information currently available to the company.
Speaker Change: The info risks uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future.
Speaker Change: Investors should understand that January economic conditions industry conditions, and other operating factors could also affect the future results of ultra bar and could cause results to differ materially from those expressed in such forward looking statements.
Speaker Change: I'd like to turn the conference over to Mr. Rodrigo busy not Oh, we always start our conference Mr. Donato you have the floor.
Rodrigo Donato: Good morning, everyone. It is a pleasure to be here once more to talk about which reports the results. We will start with a brief overview of 2024 last year was another year of important improvements for the company even in an environment of volatility and uncertainty we continue to see growth in natural gas in this regard.
Rodrigo Donato: And resilience and if you didn't get despite the environment of significant irregular practices in the <unk> sector.
Rodrigo Donato: We maintained a strong operational cash flow generation, which allowed the company to increase its.
Rodrigo Donato: The investment level, while maintaining financial leverage at comfortable levels.
Rodrigo Donato: Our largest capital allocation in a single asset for their last 10 years.
Rodrigo Donato: One 8 billion Reais investment, including proceeds from the advanced for future kept the increase to acquire a 42% is taken and refused to Brazil. We also are quite victualler for 124 million Reais complementing our portfolio of energy solution Ultra gas.
Rodrigo Donato: We evolved our management model with a new governance, providing greater agility autonomy and accountability for our portfolio companies. We also announced the planned transition process for the position of CEO and CFO Ultra part should be concluded by April 2025, and with that I will now move on to the presentation.
Rodrigo Donato: <unk> of our results for the fourth quarter and the full year of 2024.
Rodrigo Donato: On slide two I would like to remind you of the reporting criteria any standards used throughout this presentation.
Rodrigo Donato: And moving now to slide three with enterprise consolidated results as you can see in the Upper left chart. Our recurring EBITDA totaled 1.284 billion reais in the first quarter of 'twenty four.
Rodrigo Donato: 3% decrease over the first quarter of 'twenty, three mainly due to the lower EBITDA at <unk>.
Rodrigo Donato: And the negative impact from the share of loss of <unk> of 104 million Reais in the quarter.
Rodrigo Donato: Looking at annual results.
Rodrigo Donato: <unk> EBITDA totaled 5.377 billion Reais, a 4% decrease over time and it's weak due to a lower EBITDA at EBITDA and got into share of loss of Adobe is partially offset by rapid results at ultra gas and Mr cargo.
Rodrigo Donato: <unk> net income was <unk> 526 million Reais in 2020 for the same level, we had in 2023 due to lower our recurring EBITDA DPP dengue and the reversal of deferred income tax from <unk>, which was offset by higher extraordinary tax credits as we have already announced.
Rodrigo Donato: Our board of directors approved the additional payment of dividends of 119 93 million Reais equivalent to <unk> 46 cents per share.
Rodrigo Donato: It will be paid from March 2014. In addition to the payment made in August last year totaling a distribution of 769 million reais in dividends for the year 'twenty 'twenty four and.
Rodrigo Donato: Moving now to slide four to comment on the cash generation for the year, we had an operational cash generation of 3.736 billion Reais in 2024, 2% lower than that of 2023 due to higher working capital investment, which was primarily driven by lower imported product.
Rodrigo Donato: <unk>.
Rodrigo Donato: And as you can see in the graph at the center in 2024, we received the final payments related to the sale of Occidental and extra pharma totaling 977 million Reais, we allocated a much higher capital to acquisitions.
Rodrigo Donato: Sort of $1 billion 782 million Reais, mainly with the investment in <unk> and the $150 million to the buyback program.
Rodrigo Donato: We also increased our Capex, which totaled 2.213 billion reais in 'twenty 'twenty, 4% to 14% increase over its intended three mainly driven by higher investments in industrial cargo.
Rodrigo Donato: Moving now to slide five to talk about our liability management and leverage.
Rodrigo Donato: Our leverage increased in the last quarter from one three times to one five times due to a lower LTM EBITDA, partially offset by a reduction in net debt.
Rodrigo Donato: Reduction in net debt is due to higher operational cash generation, partially offset by three items the advanced payment for future kept increasing in the reviews are multi to 500 million reais.
Rodrigo Donato: Predict change rest is gone by 276 million Reais and the launch of buyback program, which consumed 50 million reais in the period.
Rodrigo Donato: And then the bottom of the slide you can also see a table with a total amount of the drag discount bandra and painting receivables from the sales of Occidental and extra pharma.
Rodrigo Donato: Net debt as of December 20th any four including these effects was $8 9 billion Reais, which is $2 4 billion higher than the balance into December 'twenty, three driven by the investments and acquisitions already mentioned and moving to slide six to discuss the competitive environment in a few industry, Brazil has experienced an.
Rodrigo Donato: Greece and unlawful activities in recent years and the few sector. According to data from this into two almost equal ago. The country loses 29 billion Reais a year due to that division and fewer deterioration. We included this slide to highlight the many challenges we have been facing regarding these unlawful practices.
Rodrigo Donato: Well as evolutions, Brazil has conquered two regulated sector with tax collection games.
Rodrigo Donato: Over the unlawful activities that affect the most of our recent results.
Rodrigo Donato: Is the noncompliance with the required biodiesel blending diesel biodiesel is more expensive than diesel and its price has increased since the beginning of 2024. There is also a large number of distributors who failed to meet with novel targets and are not purchased the mandatory carbon tax credits annually. These unlawful practices have allowed the.
Rodrigo Donato: Companies to gain market share over the company's debt followed their routes.
Rodrigo Donato: The market share album lawful companies that follow their rooms decreased two nine percentage points. In 2024. We are also experiencing advancements recently as the new law for another view, turning noncompliance environmental crime, among other things and anticipation of a more of a V of herpes in coffins for.
Rodrigo Donato: And we expect that the fight against unlawful practices continued to advance and allow a better competitive environment for the companies that follow the rule and moving to slide seven let's talk about <unk> as a result, the volumes sold in the quarter decreased 1% year over year with a 3% growth in the Otto cycle and a 6% decline.
And these are mainly in the spot market in 2024 U P tanker sale volume grew 2% with a 5% increase in the auto cycle and a 1% drop in diesel we ended 2024 with a network of 5860 stations in line with that of 2023.
Rodrigo Donato: Additionally, we closed the quarter with 1450 <unk> stores with a 9% same store sales growth in the fourth quarter of 'twenty four.
Rodrigo Donato: And as SG&A decreased by 13% over the fourth quarter of 23, driven by lower personnel expenses and one off expenses related to the conclusion of the third station reviewing process of the legacy network and marketing expenses in the fourth quarter of 'twenty three the other operating results line total negative a 100 million.
Rodrigo Donato: 14 million react in the quarter, an improvement of 16 million reais compared to the fourth quarter of 2003 due to lower expenses with carbon tax credits. The lineup result from disposal of assets totaled 63 million Reais, resulting mainly from the sale of <unk> real estate assets.
Rodrigo Donato: If you didn't get to EBITDA was $1.841 billion in the quarter. The recurring EBITDA amounted to 844 million reais, 27% lower year over year, the lower EBITDA, mainly reflects reduced margins impacted by unlawful practices in the industry and higher inventory levels and lower.
Rodrigo Donato: Sales volume, partially offset by lower expenses.
Speaker Change: Anthony for if you understood away, but that was far below 445 million reais.
Speaker Change: EBITDA totaled $3 3 billion Reais, a 6% reduction year over year, mainly due to industry and local practices a higher inventory levels throughout the year.
Speaker Change: For this first quarter, we continued to see a high level of unlawful practices in the industry, particularly in biodiesel.
Speaker Change: Even so we expect profitability levels not below that of the fourth quarter of 'twenty four despite the lower seasonality helped by inventory gains in the first quarter of 'twenty five.
Speaker Change: And now moving to the next slide number eight to talk about another good quarter for which our guests the volume of LPG sold in the fourth quarter was 3% higher year over year due to a 3% increase in the bottled segment as a result of higher market demand aimed to a 4% increase in the bulk segment, mainly reflecting higher sales to industries.
Speaker Change: The total volumes sold in 2024, it was 1% higher driven by a 3% increase in bulk sales due to higher industry demand, while the bottled segment declined by 1%.
Speaker Change: With regard to SG&A in the fourth quarter of 2004 was 16% higher than that of the fourth quarter of 23 due to higher personnel expenses, mainly due to a collective bargaining agreement and acquired businesses as well as expenses on lawsuits with regard recurring EBITDA totaled 441 million reais in the quarter, a 9% growth.
Speaker Change: <unk> year over year as recurring EBITDA was 1 billion 6080, 7 million Reais and so and it's only four 2% growth over 20% and three the growth was driven by higher volume and better sales mix. In addition to results of new energy solutions, despite their higher costs and expenses, mainly due to <unk>.
Speaker Change: Right and the effects of inflation.
Speaker Change: And for this first quarter, we expect an EBITDA similar to that seen in the first quarter of 24.
Moving now to slide nine we will talk about another great quarter ultra cargo.
Speaker Change: Installed capacity remained at 1 million $6 7000 cubic meters.
Speaker Change: <unk> meter sold grew by 9% year over year, mainly due to the startup of operations at our plant in <unk> and greater handling our fusing Vila do Conde.
Speaker Change: <unk> net revenue reached 288 million Reais in the fourth quarter at 70, 410% higher year over year in 2024 net revenues totaled 1.076 billion Reais, a 6% increase over 2023.
Speaker Change: The growth reflects higher cubic meters sold and improved sales mix and higher spot and contractual tariffs, partially offset by lower spot sales a few.
Speaker Change: Combined cost and expenses were 11% higher than that of the fourth quarter of 'twenty three due to higher maintenance costs personnel expenses, mainly variable compensation and consulting services for expansion projects, which are a cargo's EBITDA totaled 169 million reais in the quarter, 11% growth year over year.
Speaker Change: Driven by an improved sales mix higher tariffs from spot sales and contractual adjustments EBITDA margin was 60% in the first quarter of 'twenty for the same level as in the fourth quarter up 23 in.
Speaker Change: In 2020 for the truck I was EBITDA was 668 million Reais, a 6% growth over 2023, reflecting higher cubic meters sold higher spot tariffs and contractual adjustments despite increased expenses.
Speaker Change: For this first quarter, we expect an EBITDA similar to that seen in the first quarter of 2020 for them to conclude the presentation today moving on to the next slide number 10, let's talk about all of our investments in 2024, we invested 2.213 billion reais with $1.304 billion.
Speaker Change: Is allocated to expansion representing 59% of the total.
Speaker Change: This amount was 465 million reais lower than our plan, mainly due to the postponement of investments through 2025, and highlights to repeat and as infrastructure projects and new ultra cargoes terminals as well as efficiency gains in ultra cargos projects I also remind you of our 2025 investor.
Speaker Change: <unk> plan that was announced at the beginning of this month totaling <unk> 542 million reacts. We are also allocating approximately 60% to expansion and a highlight or detail. Both in this presentation and in the market announcements well.
Speaker Change: Well. This concludes my presentation, we will now move on to the Q&A session to answer the questions. You may have thank you very much for your attention.
Speaker Change: Youre going to start now our Q&A session for investors and analysts.
Speaker Change: Want to ask a question please raise your hand.
Speaker Change: The first question comes from <unk>.
Speaker Change: Debris L Barra CD.
Speaker Change: MS Barbara please move on.
Speaker Change: Mr. Bob Yes.
Speaker Change: Well. Thank you very much for taking my questions I have two quick questions.
Speaker Change: The first one something that attracted my attention concerned the margins of the Bronco.
Speaker Change: When you started the year, we had an expectation of margins, which would be better than 2024.
Speaker Change: Because of all that interesting information you shared about unlawful practices and there was a perspective of Ing group.
Speaker Change: Glenn.
Speaker Change: And they have made some gains throughout the year last year.
Speaker Change: So we really expected to.
Speaker Change: 2024 to have been a better year in terms of profitability to the industry.
Speaker Change: And when you look to a competitor or is it something that didn't turn out to be a reality.
Speaker Change: So my question is exactly about that.
Speaker Change: What do you expect for 'twenty to 'twenty five in your opinion do you think that the industry.
Speaker Change: This potential increase in margin would come.
Speaker Change: Just if we change that unlawful practices is there anything limited within the industry that can help to improvement I know how competitive it is but anything else that can be done to improve margins. So we're seeing pricing.
Speaker Change: I would like to hear more about this dynamic of margins.
Analyzing thank you for it and looking ahead to 'twenty five to understand the dynamic of the whole industry. My second question concerns investment on the Liza <unk> Ultra.
Speaker Change: It's oh.
Speaker Change: This is the company that has the most comfortable balance sheet, making investments when interest rates are higher macroeconomic challenges.
So my question is how are you going to use that favorable balance towards the benefit of the company.
Speaker Change: During which a moment, which companies that would be more conservative in terms of investment.
Speaker Change: What do you think the right time.
Speaker Change: Doing queries that moderation.
Speaker Change: Try to regain our market share. So that's what I would like to hear from you understanding. The fact that you have a more favorable balance sheet than the competition. Thank you.
Speaker Change: Yeah.
Rodrigo Donato: Good morning, Gabriel This is Rodrigo speaking.
Speaker Change: Starting from the Broncos margins.
Speaker Change: And those lines that we showed you.
It was exactly to highlight the main factors that have affected the margin throughout the year.
Speaker Change: <unk>, formerly <unk>.
Speaker Change: The year started with the effect of Bob.
Speaker Change: And Barbara <unk>.
Speaker Change: But.
Speaker Change: You do end up having any effect on the fourth quarter of biodiesel and what happened throughout the year.
Speaker Change: In addition to the increase of the mix of feel.
Speaker Change: Okay.
Speaker Change: And supply and demand.
Speaker Change: The biodiesel price as opposed to diesel price really.
Speaker Change: And so Florida, which.
Speaker Change: Which really makes it gives an advantage of distributors, who do not make the appropriate mix those who have unlawful practices they end up benefiting.
Speaker Change: In a market that's what affected.
Speaker Change: And that can be seen in our highway.
Speaker Change: <unk> why have we suffered so much because we have our resellers maintain competitiveness in this scenario, where there were more unlawful breakfast concerning biodiesel.
Speaker Change: Now looking ahead.
Speaker Change: We refer back to what happened in 2024.
Speaker Change: The return on our investment is really no lower than have fixed investments.
Speaker Change: There had been approval was written off a bill of law and the anticipation and mono phase for <unk>.
Speaker Change: Coffins in ethanol. So it means that companies that are paying tax can really compete in a fair playing field.
Speaker Change: But of course, there is a risk of the operations. So this is the expectation.
Speaker Change: Ryan to move ahead in our fight against the regularity is concerning biodiesel.
Speaker Change: In the first quarter the spread reduced because the prices went up and there was a reduction of the biodiesel prices because of the crop season. So I think that's going to help but we still have to have better regulation of biodiesel to avoid these asymmetries between those that pay taxes.
Speaker Change: Those that do not.
Speaker Change: Let me hand, it over to Pedro Gad <unk>, our CFO of <unk> to answer the question about Capex.
Pedro Gad: Good morning. Thank you for the question. This is Pedro speaking.
Pedro Gad: Any pockets that capex opportunities any positive balance sheet.
Pedro Gad: We have reduced the number of our service stations.
Pedro Gad: So in terms of branded stations, we'd rather focused on quality than on speed. It is he pays an acceleration there will be determined on the opportunities that we are considering all of the time when.
Pedro Gad: When we correlate that with market share market share AZ with Zoe team.
Pedro Gad: Of the activities more than a target.
Pedro Gad: Part of our portfolio.
Pedro Gad: Is correlated with branded stations resellers. This is something that has given us good stability and part of our portfolio or just more opportunistic initiatives spot market than what shows to us. So branded we'll think about quality and branding and.
Pedro Gad: This part will just depend on margins and the benefits Devry combat great.
Pedro Gad: Great. Thank you and.
Speaker Change: Let me congratulate the new officers that you have now.
Gabriel: Thank you Gabriel.
Pedro Gad: Okay.
Pedro Gad: The next question comes from Rodrigo Almeida from Santander.
Mike: Please on mute what Mike.
Speaker Change: Good morning, this annatto ultra theme.
Speaker Change: I would like to talk about ultra gas.
Speaker Change: Within your portfolio.
Speaker Change: It seems that ultra gas is the platform that are using to create more options of growth.
Speaker Change: It is contributing with additional EBIDTA for no business can you please share with us.
Speaker Change: What is exciting are the most in terms of new businesses, where can you expect more meat and long term returns something that can gives us an understanding of the magnitude it can be with gas sour gas.
What can you share with us about the use of ultra gas as the platform of growth for the group.
Speaker Change: And secondly.
Speaker Change: I'd like to ask about working capital.
Speaker Change: You talk about reduction of inventory levels in the quarter, probably it's related with bio diesel inventory levels. It would be good we said something about that in the last.
Speaker Change: And finally capital leverage.
Speaker Change: I've, we've already asked about that and we've seen a different thing.
Speaker Change: Buying back so considering your history and what has changed really.
Speaker Change: What has changed to a board you into buying back the shares so whatever you can share with us would be most appreciated.
Speaker Change: Mostly I appreciate it.
Speaker Change: Good morning. This establish a speaking thank you for the question.
Speaker Change: As you were talking about new energy.
Speaker Change: We are happy with what we've developed.
Speaker Change: The idea is not to have segregated businesses.
Speaker Change: In this quarter.
Speaker Change: We have combined our businesses.
Speaker Change: We can seem to see the contribution of new energy new.
Speaker Change: Sources of about 5%.
Speaker Change: With a trend do you have any inquiries over the months.
Speaker Change: But we've been confirming our thesis of having a portfolio of energy solutions.
Speaker Change: When the they are getting close to maturation level, but there's a lot to develop really in the end of 'twenty 'twenty four we started to operate with Biomethane.
Speaker Change: Okay.
Speaker Change: And then it was part of the operation by the end of the year.
Speaker Change: We have a relevant portfolio of clients confronting alloy faces.
Speaker Change: And also negotiation of energy in the free market something more recent still a lot to do but we are very excited about it.
Speaker Change: This is <unk> speaking thank you for the question.
Speaker Change: You have understood that in terms of working capital.
Speaker Change: We've.
Speaker Change: Got that by managing the inventories in the previous quarter, we talked about our planned movement of making investments Bayou does though.
In all and this is something that was done gradually throughout the quarter. In addition, we've also made additional efforts too.
Speaker Change: Do you have oil derivatives that a more balanced accounts, so inventory, especially of bio fuels.
Rodrigo: Rodrigo concerning capital allocation.
Rodrigo: Why buy back because of the price of shares went down.
Rodrigo: <unk>.
Rodrigo: We can have better control of.
Rodrigo: Concerning our dividend with the how we wanted to return really value to our shareholders.
Rodrigo: The pay out was 35% about 25% and it's spot with the buyback.
Rodrigo: Strategy.
Rodrigo: Depending on the price of those 25 million that would be something like 500 meter area.
Rodrigo: Great a quick follow up concerning working capital do you still see space for optimization, especially that it rang up throughout the year because of.
Rodrigo: Higher cost of capital when you think can be done there in terms of optimizing inventory levels and anything that can be of help.
Rodrigo: Well.
Rodrigo: I think our turnover is something rather the working capital with some very important and then we always focus on that there was a price increase in this quarter.
Rodrigo: We do have some initiatives to optimize the working capital focusing more and it rang up right now, but we still have to observe all the changes in market conditions. That's great. Thank you.
John Mathews: The next question comes John Mathews and felt at UBS.
Speaker Change: She's on mute here Mike.
Speaker Change: Good morning, <unk> team. Thank you very much great result.
Speaker Change: My first question.
Speaker Change: It's about capital allocation and potential of additional diversification at the holding more than at the subsidiary LAPIS and focused on your feelings about investments rather than short term plan, what does ultra have to see to get more excited to start making more investments.
Speaker Change: Yeah.
Speaker Change: As such as the investments you've made at Heathrow V S.
Speaker Change: If you have that opportunity today in other words that would.
Speaker Change: How would you determine that would you prefer lower leverage lower interest rates or would you have to wait for the maturation of investments and he had ravi is or even have more labor or investments.
Speaker Change: So what would be really your plan towards that and concerning ultra cargo you'll have a very well defined pipeline with our deliveries of our installed capacity for 2025. It has been part of your investment plan.
Speaker Change: But there has also been a reduction of expansion in 'twenty six 'twenty seven that's what I understood does it make sense have you been considering other possibilities just growth.
Speaker Change: Cargo and would it be possible to adjust the capex throughout the year include potentials are upward potential opportunities that might come to you during the year of 25 and a hat.
Speaker Change: Thank you.
Speaker Change: Hi, Martin Thank you for the questions, let me thoughts about capital allocation first.
Speaker Change: I think you've answered your question to some extent these are the two factors.
Speaker Change: First we have a balance sheet and we can make new movements, but it will depend on the capacity to execute and execute well.
Speaker Change: We have a plan of integration and value generation. We've had Ravi is in its ongoing lots of efforts towards that but we are still considering potential investments.
Speaker Change: And if we have good return on investment and execution capacity, we can consider new capital allocations, but not short term.
Martin: Martin This is that you're speaking good morning. Thank you for the question.
Martin: We've been making investments in growth in 'twenty to 'twenty four it was a record of investments at ultra cargo.
Martin: Port expansions in our inland project.
Martin: And the results are going to be noticed throughout the year.
Martin: We have Oh Pla.
Martin: The railway systems.
Martin: About Palmer on to your second quarter at a key at the end of the year strong gains estimates the level of investments for 2025.
Martin: At the same level as previous year.
Speaker Change: We are going to start the expansion in Swabi swap has become an important hub.
Speaker Change: For ethanol, receiving <unk> and we have a very robust pipeline.
Speaker Change: In our portfolio with investments, we talk about the railway structuring sample Santos and your peers, we don't see a slowing down but we have high interest rate. What we have to do is reallocate as demand increases.
Speaker Change: Our vision today is not to make changes in the plans that we have presented to you in our annual events.
Speaker Change: Thank you quick follow up on pizza, and others I'm, sorry, the timeline of expectations for maturation.
All of your efforts and he'd Ravi is.
Speaker Change: That is showed you know today by 20 to 25.
Speaker Change: Have it already is it maintain as an expectation from your side.
Speaker Change: Yes, we maintain that.
Speaker Change: Great. Thank you very much.
Speaker Change: Our next question comes from Pedro Suarez BTG Pactual.
Speaker Change: Please go ahead.
Pedro Suarez: Good morning, <unk>. Good morning, everyone. Good morning, everyone, who is connected.
Pedro Suarez: The first question concerning your investment plan.
Pedro Suarez: That you announced and some some weeks ago, if I recall that in your last.
Pedro Suarez: Earnings release Conference you had anticipated.
Pedro Suarez: That there would be a decrease compared what had been budget and the forecast for 2024 because of gain of efficiency and the postponement that you mentioned.
Pedro Suarez: I don't know, whether you can share with us a breakdown within this number.
Pedro Suarez: Within the investment plan of 20 to 24, what had to be postponed for 25, and what was resulted from efficiency gains and in your plan for 'twenty to 'twenty five.
Would there be more gain of efficiency to be delivered.
Speaker Change: And finally concerning a bronco strategy, especially b to B.
Pedro Suarez: In general.
Speaker Change: It has suffered.
Speaker Change: More than just see because of the unlawful practices and we've seen.
Speaker Change: Some strategies are executed by other players of our G. R. R. Perches addressing this loss of market share, especially in B to B is it part of your plan could.
Speaker Change: Could you please tell us more.
Speaker Change: About the rationale.
Speaker Change: And the possibilities that you see.
Speaker Change: Thank you.
Speaker Change: Good morning, Pedro Thank you for the questions.
Speaker Change: That was starting from Capex.
Speaker Change: When we share the plan for the year.
Speaker Change: This is the maximum capex that we allocate for the period. It's a combination of all projects that had been approved with the board of directors to be executed throughout the year.
Speaker Change: <unk> already has the maximum level of approval that would be made in terms of investments.
Speaker Change: Of course, we always focus on efficient management of such investments.
Speaker Change: And the main highlight in sales efficiency.
Speaker Change: Comes from Ultra cargo. This year for example, if you look at the total Capex approved.
Speaker Change: So we always focus on efficient management of searching for estimates.
Speaker Change: And the main highlight in its efficiency.
Speaker Change: It comes from Ultra cargo. This year for example, if you look at the total Capex approved.
Speaker Change: So we always focus on efficient management of searching for estimates.
Speaker Change: And the main highlight in its efficiency.
Speaker Change: It comes from Ultra cargo this year for example.
Speaker Change: If you look at the total Capex approved.
Speaker Change: We always focus on efficient management of searching for estimates.
Speaker Change: And the main highlight in its efficiency.
Speaker Change: And the aim the within ultra gas.
Speaker Change: Broader question.
Speaker Change: We've seen the news and we've been monitoring the discussion of the program.
Speaker Change: Yes to every winding the population in the model the year, considering as the replacement of the current benefit too.
Speaker Change: Two low income people to a benefit that it would be provided this product a let's say a bottle of gas that would be provided for free.
Speaker Change: What is it would take on this discussion with this motto.
Speaker Change: If confirmed what would you expect in terms of changes to the industry because of that.
Speaker Change: Good morning, Monique. This is data that is with APE Ranga you've understood that.
Speaker Change: The fourth quarter we.
Speaker Change: Increase our inventory because of our arbitration and also the incentives of anticipating.
Speaker Change: And the purchased it really to avoid decks and we are going to observe that we are now going to see a reduction of these high inventory levels going into normal levels and we expect to have it normalized by the end of March.
Speaker Change: When you get this established I was speaking about gas to everyone. The government broad program.
Speaker Change: We are taking part in the discussion trying to support the government.
Speaker Change: We think it's a very positive movement.
Speaker Change: The government. This is something being discussed all over energy poverty those that do not have access to reliable energy sources.
The program is applicable in Brazil, but it's a smaller scale.
Speaker Change: Addressing it accordingly, as a society would be extremely good and we try to support that this is going to be done through the industry through the sector.
Speaker Change: A lot's been discussed the government is leading the process. We think it is quite positive.
Speaker Change: It means an improvement to us as a society.
Speaker Change: We've developed a lot in terms of L. B G.
Speaker Change: Throughout the decades, we have referenced in the world.
Speaker Change: We know there are some discussions that may take place, but that would be very positive so having gas being brought to those that needed. The most that would be very good for us as a society.
Speaker Change: Thank you.
Speaker Change: The next question comes from registered Cardoso ex fee.
Speaker Change: Please UN mute your mic.
Speaker Change: Hello can you all hear me well.
Speaker Change: Yes, Reggie white good.
Speaker Change: Good morning. Thank you, let me start by congratulate it's Donato Ballard is for your new positions.
Speaker Change: There are two topics that I would like to address first increasing capital of <unk> and the second one about branding.
Speaker Change: And he drove he is the.
Speaker Change: The management of <unk>.
Speaker Change: Is expecting a capital increase in the first quarter in March So I would like to hear your perspective about it.
Speaker Change: After the announcements that have been made.
Speaker Change: We believe that the capital increase would be of about 1 billion 1 billion 250.
Speaker Change: France, Germany, the gross up of your participation in the 500 million range.
Speaker Change: Does it make sense the price should be closer to that of the screen prize to offer a maybe an economic incentive for minorities to join an I'd like to understand when you or take how much capital would it be necessary in what would be the purposes of it.
Speaker Change: The capex less leverage up to a specific EBITDA in that that.
Speaker Change: Our bad debt is really affected by the drought.
Speaker Change: It's a question.
About the rationale and the dynamic of capital increase.
Speaker Change: My second question concerns amortization.
Speaker Change: The anticipation that you've being offering is running below amortization.
Speaker Change: What is the system behind it is it short term contract.
Speaker Change: Our.
Speaker Change: Branded initiatives costing less.
Speaker Change: Is it an anticipated push.
Speaker Change: Although I don't think there is any scale there between amortization and branded initiatives. These are my two topics. Thank you.
Speaker Change: Hi, <unk>. Thank you very much for your question I was starting from these reviews.
Speaker Change: We had a December one initiative.
Speaker Change: Initiative, but we did and the increased capital because of information asymmetry because of that as we anticipated in March we are going to have the capital increase.
Speaker Change: Formally announced the two main elements that are considered.
Speaker Change: Unleash.
Speaker Change: The growth of the company and reduce leverage.
Speaker Change: There is a covenants.
Speaker Change: In a bond issuance of <unk>.
Speaker Change: Below three points.
Speaker Change: Jim.
Speaker Change: Three five times prevents new investments so that's a limitation.
Speaker Change: Although appropriate management and cost capital structure in the company.
Speaker Change: So we wont really see.
Speaker Change: You.
Speaker Change: Deal with those two issues.
Speaker Change: Please rarely are the opportunities for more growth.
Speaker Change: And reducing our really are the the cap the limitation in the company's going to announce it.
Speaker Change: It's really about a brand.
Speaker Change: Part of that is because of.
Speaker Change: The postponement, we had a capex increase compared to anticipated capital N. A brungardt branded stations and it is following volume's.
Speaker Change: There is an amortization correlated with volumes and depending on the volume and all of this different branded initiatives there might be.
Speaker Change: More or less recognition of this bonus.
Speaker Change: It comes from it.
Speaker Change: Okay. Thank you just one quick follow up about he'd Ravi us.
Speaker Change: Any concerns of consolidation do you want to go over 51% just thinking about.
Speaker Change: How much more capital would come in addition to yours in terms of capital increase and I always wondered whether the fact that this is novo mercado, whether it would have any implications there.
Speaker Change: I'm not sure I understood. Your question Rajeev is we are going to support the company and whatever it takes.
Speaker Change: This is something.
Speaker Change: That we've been doing and it's following exactly the idea that we've had in mind since the beginning.
Speaker Change: Kim.
Speaker Change: The next question comes from Guillermo <unk> Goldman Sachs.
Speaker Change: Please on mute or Mike.
Speaker Change: Hello, Good morning, Great results quick questions.
Speaker Change: First about these agenda gas unlawful practices.
Speaker Change: A lot has been sad approval of some federal initiatives and if ethanol.
Speaker Change: Player of the area said that there would be some gains from EBITDA from these measures any estimate that you would like to share with us what are the gains and profitability with it before he brungardt with this measure so more exposure to ethanol.
Speaker Change: And second question about capital allocation.
Speaker Change: <unk> balance is light below what had been the initial plans.
Speaker Change: Mr. <unk> has said that you do not expect.
Speaker Change: Something nonorganic to need the capital.
Speaker Change: So does it makes sense that you are going to run at about this level of 2.5 more than any other.
Speaker Change: Good morning <unk>.
Speaker Change: Short answer about that Gulf of Brexit. His agenda is no we're not calling it in formal correct as we're calling it unlawful variety or he was using really in pharma, but no it's unlawful to gaslog.
Speaker Change: If all of these practices are solved we would go to a level that we used to have in 2016 2017.
Speaker Change: If as a country weekend. So these problems.
Speaker Change: Now concerning capital allocation.
I'm I'm afraid I didn't understand your question.
Speaker Change: Oh trades reading.
Speaker Change: Running at a leverage level of 1.4.
Speaker Change: And the guidance you'll have shared was one point to 1.5.
Speaker Change: We ain't tourist rate going up or do you expect to run at a higher level from now on.
Speaker Change: Yes.
Speaker Change: Closer to the Boston Yep.
Speaker Change: Okay. Thank you.
Speaker Change: Okay.
Speaker Change: The next question comes from Gustavo Satcom Bradesco BVI.
Speaker Change: Okay.
Speaker Change: Hello.
Speaker Change: Morning, Thank you for taking my question.
Speaker Change: I have two questions first.
Speaker Change: When we analyze the results that the Petro agency reports since the beginning of February has been showing a healthier margin.
Speaker Change: We don't know what's reseller, what its distribution, but then network as a whole seems the whole system seems to have healthier margins if I'm taking into consideration the increases of IC M. S and the increased price of diesel by Petrobras is it something that had been observing at that Brenda.
Speaker Change: And if yes is it something that has been levered.
Speaker Change: The three big play.
Speaker Change: Players or do you think it's a natural trend of the whole lack of system. After a tougher times in the fourth quarter.
Speaker Change: My second question about the informal unlawful practices.
Speaker Change: The media.
Speaker Change: Has been publishing that uneven it longer stuff has been saying that the national agency of a battle is ive asked agave and are really expecting further biodiesel Netherlands.
Speaker Change: Do you see any results coming out of it do you expect it to impact our results in the short term.
Speaker Change: And the remaining agenda right against the unlawful practices.
Speaker Change: Such as the increase of tax solidarity in Sao Paulo.
Speaker Change: See bio goes environmental crimes, what elements should we pay closer attention to in 2025, and when are we going to observe any reso results of that in your own <unk>.
Speaker Change: Duction data.
Speaker Change: Concerning prices.
Speaker Change: Probably you will see an increase in prices of Petrobras and the combination.
That it has with tax increase.
The average prices going up and as such.
Speaker Change: The gain of the inventory that competence have had.
Speaker Change: We'll be transforming to larger benefit. So these are the short term effects.
Speaker Change: Now concerning our regulatory agenda.
Speaker Change: We can see better alignment of our.
Speaker Change: Really.
Speaker Change: The government to find these practices.
Speaker Change: The main point that we've been discussing is the combination of our diesel.
Speaker Change: <unk>.
Speaker Change: And the combination with biodiesel and this is something really serious.
Speaker Change: In terms of tax and the government objectives, and defining a required mix of biodiesel to reduce.
Speaker Change: Emissions and.
Speaker Change: In greasy really the mix.
Speaker Change: Really to fight against the irregular practices that the industry normally execute.
Speaker Change: My first question was the following considering the.
Speaker Change: The increase of goods RASM Dax. It seems that there is a higher margin for reseller and distribution have you been observing that or not.
Speaker Change: I know I've said that the price effect that you have been observe comes from price increase in Texas.
Speaker Change: Okay. Thank you.
Speaker Change: Okay.
Thank you further questions will be answered later I, our investors relation team Bio trust, we would like now to hand, it over to Mr. Rodrigo <unk> for his closing remarks, Mr. Bissonata, you'll have the floor.
Speaker Change: Well. Thank you all very much for your questions. Thank you for your attention and interest in May we'll see each other again for the first quarter twenty-five. Thank you very much have a great day.
Speaker Change: Thank you.
Speaker Change: This call is closed now thank you very much and disconnect your lines have a great day.