Ultrapar (UGPA3) Q4 2023 earnings summary

Executive summary

• FY23 recurring adjusted EBITDA reached R$5.615bn, up 41% YoY, with record results across the three main businesses; net income rose 37% to R$2.518bn.

• Net debt fell to R$6.121bn and leverage to 1.1x, supported by strong operating cash generation; investment-grade rating was regained from S&P.

Financial highlights

• Net revenue was R$126.049bn, down 14% YoY, reflecting lower fuel and LPG prices and the deconsolidation of Oxiteno and Extrafarma.

• Gross profit rose 14% to R$9.318bn; reported EBITDA was R$5.724bn and recurring adjusted EBITDA was R$5.615bn, up 41%.

• Net income reached R$2.518bn, up 37%; lower net financial expenses included a positive R$131m hedge mark-to-market result versus a negative R$384m in 2022.

• Cash flow from operations was R$5.477bn; lower fuel prices reduced working capital investment and net income also benefited from higher EBITDA and lower financial expenses.

• 2023 CAPEX totaled R$1.949bn, versus R$2.182bn planned; higher investment in the three main businesses was partly offset by lower working capital needs.

Outlook and guidance

• FY24 investment plan totals R$2.678bn: R$1.528bn for expansion and R$1.150bn for maintenance and other items; ~55% is allocated to expansion.

• Expansion priorities include Ipiranga station branding and logistics, Ultragaz bulk customers and new energy solutions, and Ultracargo capacity increases and the Palmeirante terminal, scheduled to begin operations by year-end 2024.