Ultrapar (UGPA3) Q4 2024 earnings summary

Executive summary

• Net revenue reached R$133.5 billion in 2024, up 6% year-over-year, with strong operational results across core businesses despite market volatility and unlawful practices in the fuel sector.

• Recurring Adjusted EBITDA for 2024 was R$5.4 billion, down 4% year-over-year, reflecting sector challenges and the impact of Hidrovias' results.

• Net income for 2024 totaled R$2.5 billion, stable compared to 2023, with R$769 million distributed as dividends, representing a 30% payout ratio.

• Major investments included R$2.2 billion in organic growth and R$1.8 billion for a 42% stake in Hidrovias do Brasil, the largest single-asset allocation in a decade.

• Leadership succession plan announced, with new CEO and CFO appointments effective April 2025.

Financial highlights

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

• Recurring Adjusted EBITDA in 4Q24 was R$1.3 billion (-23% vs. 4Q23), mainly due to lower Ipiranga margins and Hidrovias' negative contribution.

• Net income in 4Q24 was R$881 million (-21% vs. 4Q23), impacted by higher financial expenses and deferred tax effects, partially offset by extraordinary tax credits.

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

• Dividend distribution for 2024 totals R$769 million (R$0.70/share, 3% yield).

Capital allocation and financing

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

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

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

• Share buyback program launched for up to 25 million shares, with R$150 million allocated in 2024.

• No financial covenants on recent debt issuances; diversified funding sources and strong liquidity position.