Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ultrapar Participacoes SA (UGP, Financial) reported a 37% increase in recurring EBITDA for Q2 2024 compared to the same period in 2023, driven by higher EBITDA from Ipiranga.
- The company's net income grew by 106% year-over-year, attributed to EBITDA growth and lower net financial expenses.
- Ultrapar's Board approved the payment of BRL276 million in interim dividends for the first half of 2024, reflecting strong financial performance.
- Ultracargo achieved a 3% growth in EBITDA year-over-year due to increased capacity occupancy and efficiency gains.
- Ipiranga's recurring EBITDA increased by 80% year-over-year, benefiting from better margins and inventory gains despite market irregularities.
Negative Points
- Ultragaz experienced a 2% decrease in recurring EBITDA compared to Q2 2023, due to lower sales volume and a competitive bottled segment environment.
- The volume of LPG sold by Ultragaz was 1% lower year-over-year, impacted by a milder winter and competitive pressures.
- Ipiranga's SG&A expenses increased by 30% compared to Q2 2023, driven by higher personnel expenses and one-off office relocation costs.
- Ultracargo faced challenges with lower spot fuel handling at certain terminals, affecting overall performance.
- Market irregularities, such as tax benefits in Amapá and increased naphtha imports, posed challenges for Ipiranga's operations.
Q & A Highlights
Q: Can you explain the impact of non-recurring SG&A expenses at Ipiranga and the effects of market irregularities on margins?
A: Leonardo Remiao Linden, CEO of Ipiranga, explained that the SG&A expenses were impacted by office relocations in Rio and São Paulo, with a BRL7 to BRL8 per cubic meter effect. Regarding market irregularities, issues such as tax benefits in Amapá and non-compliance with CBio goals have affected margins. However, actions are being taken to address these irregularities, and the outlook for the second half of the year is positive with expected market normalization.
Q: What are the expectations for Ipiranga's market share in the second half of the year?
A: Linden stated that the market share in the branded network is expected to remain stable, with less volatility anticipated in the spot market due to fewer irregularities. The focus will be on capturing good business opportunities while maintaining a stable share in the contracted area.
Q: What is the status of the integration with SHV at Ultragaz, and when can synergies be expected?
A: Tabajara Bertelli Costa, CEO of Ultragaz, mentioned that Phase 1 of the integration with SHV has been implemented as planned. Marginal synergies are expected in the third and fourth quarters, with full implementation anticipated by 2025, aligning with the strategic plan to improve operational efficiency.
Q: What are Ultrapar's capital allocation priorities following the acquisition of Hidrovias?
A: Leonardo Remiao Linden emphasized that capital allocation remains disciplined. The acquisition of Hidrovias is seen as an opportunity, with Ultrapar holding a 40% stake. The focus will be on leveraging synergies and long-term strategies, with more details to be shared at the Ultra Day Investors Day on September 6.
Q: How is Ultracargo expected to perform in the second half of the year given the lower spot market volumes?
A: Andre Zaia, CFO of Ultracargo, noted that the second quarter was challenging due to high import levels and inventory. However, a gradual normalization of inventory levels is expected in the second half, which should provide more spot opportunities similar to previous quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
