NYSE:UGP Ultrapar Participações Q2 2023 Earnings Report $3.04 -0.11 (-3.34%) Closing price 03:59 PM EasternExtended Trading$3.12 +0.09 (+2.80%) As of 07:37 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Ultrapar Participações EPS ResultsActual EPS$0.04Consensus EPS $0.05Beat/MissMissed by -$0.01One Year Ago EPSN/AUltrapar Participações Revenue ResultsActual Revenue$5.98 billionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AUltrapar Participações Announcement DetailsQuarterQ2 2023Date8/9/2023TimeN/AConference Call DateThursday, August 10, 2023Conference Call Time10:00AM ETUpcoming EarningsUltrapar Participações' Q1 2025 earnings is scheduled for Wednesday, May 14, 2025, with a conference call scheduled on Thursday, May 8, 2025 at 10:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckInterim ReportEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Ultrapar Participações Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 10, 2023 ShareLink copied to clipboard.There are 2 speakers on the call. Operator00:00:00Good morning. Thank you for waiting. Welcome to our earnings presentation of UltraPure to present the results of the Q2 'twenty three. There is also a simultaneous webcast that may be accessed through Ulta Par's website at rr.ultra.com.ur and MZiQ platform. The presentation will be conducted by Mr. Operator00:00:29Rupi Gopecenato, Ultrapar's Chief Financial and Investor Relations Officer. And then the Q and A session will have also with us Mr. Marcus Groots, Ultrapar's CEO and the CEOs of the businesses, Mr. Spadagio Bertelli, Dapo Morao and Leonardo Linden. We would like to let you know that this event is being recorded, and all participants will be in listen only mode during the company's presentation. Operator00:00:59After each of our remarks, there will be a question and answer question. At that time, further instructions will be given. We remind you that questions, which will be answered during the Q and A session, may be posted in advance in the webcast. A replay of this call will also be available for 7 days immediately after it's finished. Before proceeding, we would like to emphasize that forward looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Operator00:01:49Forward looking statements are based on the beliefs and assumptions of Utropar Management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Ultrapar and could cause results to differ materially from those expressed in such forward looking statements. Now I would like to turn over to you Mr. Rodrigo Pitonato. Operator00:02:37He is going to begin the conference. Please, Mr. Pitonato, you have the floor. Speaker 100:02:47Good morning, everyone. It is a pleasure to be here once more to talk about Ultrapar's results. Starting on Slide number 2, I remind you that at this moment, both the earnings release and this presentation consider Ultrapar's data from continuing operations in 2023. As for 2022, the company's data is presented in the pro form a view considering the sum of continuing and discontinued operations as disclosed throughout last year, unless otherwise indicated. Moving now to slide number 3 with Ultrapar's consolidated results. Speaker 100:03:19As you can see in the chart in the upper left side, our recurring EBITDA from continuing operations totaled BRL933 million in the Q2 of 2023, 15% lower year over year due to the lower EBITDA of Piranga, partially offset by higher EBITDAs of Ultragas and Ultracargo. Ultracargo's net income was R239 $1,000,000 in the 2nd quarter, 48% lower year over year due to the lower EBITDA from continuing operations, the capital gain of BRL289 1,000,000 from the sale of Oxyten in the Q2 of 'twenty 2 and the higher depreciation and amortization. These effects were attenuated by lower net financial expenses despite the higher CDI, mainly due to the positive one off result of BRL47 1,000,000 in mark to market of hedges in this Q2 of 2023, compared to the negative one off of BRL272 million in the Q2 of 'twenty two. Our Board of Directors, as we have already informed, approved the payment of BRL274 million in interim dividends referring to the year 2023, equivalent to BRL0.25 per share. Investments from continuing operations totaled BRL385 1,000,000 in the 2nd quarter, 5% lower than that of the Q2 of 'twenty two, mainly due to lower investments at Ultracargo and Ipiranga, partially offset by higher investments at Ultragas. Speaker 100:04:46We had an operating cash generation of BRL898 1,000,000 in the 2nd quarter, compared to a generation of BRL376 1,000,000 in the same period of last year, resulting from lower investments in working capital on the back of fuel price reductions. The operating cash generation in the 2nd quarter was BRL1 million if we exclude the reduction of BRL301 1,000,000 in the draft discount balance. And moving now to slide 4 to talk about our reliability management. We ended the 2nd quarter with a net debt of BRL8 1,000,000,000, a reduction of BRL252 1,000,000 compared to March 23, due to the operating cash generation, even if we consider the reduction of BRL301 1,000,000 in the direct discount balance in the second quarter. Our leverage remained practically stable at 2.1 times net debt to EBITDA in June 23 on the back of the lower last 12 months EBITDA from continuing operations despite the reduction in net debt that I've just mentioned. Speaker 100:05:48I'd like to point out that the numbers of our net debt do not include pending receivables of BRL1.1 billion related to the sales of Oxiteno and Extra Pharma. We raised BRL1.18 billion in agribusiness receivable certificates at the cost of 104.8 percent of the CDI of that RBL618 1,000,000 in June and RBL400 1,000,000 in July, which extends our debt profile at the yearly lowest cost for equivalent issuances in Brazil. We've included at the bottom of this slide a table with the total amount of direct discount and vendor lines as well as pending receivables from the sales of Oxiteno and Extra Pharma, all lines highlighted in our balance sheet. The net debt of June 23, adding the direct discount, vendor and divestment of receivables would be BRL8.8 billion, which is BRL1.746 billion lower than the balance of June 22 1 year ago. And moving now to the next slide, slide number 5 to talk about another excellent quarter of Ultragaz. Speaker 100:06:51The volume Magal PG sold in the Q2 was 4% higher year over year due to the 2% increase in the bottled segment on the back of greater market demand. The bulk segment in turn grew by 8% with higher sales mainly due to industries. Ultragaz SG and A in the Q2 of 'twenty three was 15% higher than that of the Q2 of 'twenty two due to 3 main factors. The first refers to higher expenses with personnel, mainly collective bargaining agreements in variable compensation in line with the progression of results and a larger headcount due to the recent acquisitions. The second factor is the higher expenses with freight resulting from higher sale volumes. Speaker 100:07:32Additionally, we also had higher expenses with sales commissions. The disposal of assets line totaled BRL7 1,000,000 in the 2nd quarter as a result of the concentration of operating asset sales. With that Ultragaz EBITDA totaled BRL405 million, 55 percent higher year over year. This growth is mainly explained by efficiency and productivity initiatives implemented in the last quarters by higher sales volume with better mix and by inflation pass through despite higher expenses. For the current quarter, we expect Ultragaz to maintain its good operating performance with seasonally stronger volumes. Speaker 100:08:09Moving now to slide 6 to talk about another great quarter of Ultracargo. The company's average installed capacity was 955,000 cubic meters in the Q2 of 'twenty 3, stable in relation to the Q2 of 'twenty 2. The cubic meters sold increased by 6% due to increased handling of fuels in Santos and Itaqui, mainly resulting from higher spot sales, especially diesel as a consequence of greater supply in the market, in addition to higher handling of chemicals in Aratu. Ultracargo's net revenues were BRL257 1,000,000 in the 2nd quarter, 19% higher year over year as a result of higher cubic meters sold, the spot sales I've just mentioned and higher tariffs. Combined costs and expenses were 14% higher than those of the Q2 of 'twenty two as a result of higher personnel expenses, mainly collective bargaining agreement and variable compensation also in line with the progression of results. Speaker 100:09:05We also had higher expenses with advisory and consultancy services linked to expansion projects and maintenance costs. In the Q2 of 'twenty 3, Ultracargo concluded the sale process of its stake in Union Vopac at the Parana Gua terminal, which resulted in a positive effect of BRL8 1,000,000 in the share of profit of subsidiaries, joint ventures and associates line. Ultracargo's EBITDA with that totaled BRL161 1,000,000 in the quarter, a growth of 24% year over year due to higher capacity occupancy with profitability gains, higher tariffs, productivity and efficiency gains and the share of profitability of subsidiaries result I've just mentioned. EBITDA margin was 63% in the 2nd quarter, 3 percentage points above that of the Q2 of 'twenty two. And for the Q3, we expect Ultracargo to continue its good operating performance with results similar to those of the previous quarters. Speaker 100:10:02And to conclude this presentation, moving now to slide 7, let's talk about the Piranga's results. Volumes sold in the quarter remained stable compared to the Q2 of 'twenty two with a 7% growth in the auto cycle with greater share of gasoline to the detriment of ethanol in the product mix. On the other hand, diesel fell by 5%, mainly due to the strategy of lower sales to the spot market during the period. We ended the 2nd quarter with a network of 6,281 service stations, 245 stations less than that of them of March 23, which is in line with our strategy of managing the legacy of low potential service stations to review that should be concluded in this Q3. A total of 76 new service stations were added to the network with an average volume contribution of 3 66 cubic meters per month. Speaker 100:10:52On the other hand, 321 service stations were closed with an average volume contribution of 43 cubic meters per month. Despite the reduction of the number of service stations, the net volume effect was positive, reinforcing our strategy of higher density and improve the standards of our service station network. In addition, we ended the quarter with 1553 AMPM stores with same store sales growth of 13% year over year. Ipiranga's SG and A decreased by 5% in the quarter, mainly due to lower freight expenses on the back of reduction in diesel prices and logistics optimization after the vehicle fleet reduction, partially offset by higher provision for doubtful accounts. The other operating results line totaled negative BRL211 million in the quarter, compared to a negative BRL130 million in the Q2 of 'twenty two, mainly reflecting higher costs with Brazilian carbon tax credits and the constitution of extemporaneous tax credits in the Q2 of 'twenty 2. Speaker 100:11:56The disposal of assets line totaled BRL31 1,000,000 in the quarter, resulting from the sale of 6 real estate assets. Ipiranga's EBITDA totaled BRL479 million in the quarter, 43% lower than that of the Q2 of 'twenty two. Recurring EBITDA was BRL448 million in the quarter, 41% lower year over year. The lower EBITDA reflects 2 main factors. 1st, margins pressured by fuel cost reduction throughout the quarter and consequent inventory losses. Speaker 100:12:26I remind you that in the Q2 of 'twenty two, we had few cost increases and inventory gains. The second factor was a worse commercial environment in the Q2 of 'twenty three due to the oversupply of imported products and higher local production. For this Q3, we expect seasonally higher volumes and a gradual recovery of profitability as the market normalizes. And with that, I now conclude my presentation. I appreciate your interest and attention. Speaker 100:12:53And now let's move to the Q and A session in which we are available to answer your questions. Thank you. Operator00:13:06We're now going to open for questions. The first question comes from Thiago Biardi of BTG Pactual. Thiago, you have the floor. Hello, good morning. Thank you for the opportunity. Operator00:14:05I have two questions focused on Ipiranga. And the first one, I think it's alluded to the last sentence that Rodrigo pointed out about expectations for the Q3, gradual recovery of margins. What are the assumptions for the gradual recovery to happen in the Q2? As you've pointed out, there was the impact of loss on inventory levels and the impact of the market, which was had a higher demand than initially predicted. Considering these two drivers that have had a negative impact on the margins of the second quarter, I would like to hear you about how you've analyzing those drivers. Operator00:15:02Is there an expectation of changing prices in recovery of inventory levels? Or do you expect the market not to have a higher offer? And if yes, why? And the second question more in the long run, I remember the first blogs of Marcos and regarding a conference call in the past where we discussed the turnaround of Ipiranga being an issue of software, not hardware. So what our current position is in terms of recovering the software, the strategy, we've seen results with the disinvestments of some of the stations. Operator00:15:52They seem to be positive. What else is missing? Of course, considering what's under your control so that the value proposition of Ipiranga keeps on improving concerning what we have observed in recent years. Thank you very much. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Good morning, Thiago. Operator00:16:13This is Linden speaking. Thank you for your question. First, let's talk about expectations. We have better expectations for the Q3. The Q2 was very challenging for the reasons that you've pointed out, and Rodrigo shared them with us quite clearly. Operator00:16:36July was much better than June, even though still slowly recovering. And in June, the market was affected for the same reasons that had impacted the Q2. But what we are observing and concerning the variables you've pointed out, there is not going to be an impact on inventory losses. We do not expect to have price reductions quite to the opposite. The market is pointing towards increases. Operator00:17:11There is also a volume recovery because of the problems of the market of second market of having excessive offer, excessive product. Our network is operating better in terms of volume in the Q3 and as a consequence, improves margins. In the Q3, we expect to have better results in the second. Now concerning software against hardware perspective, as you pointed out, we are maintaining our 4 pillar plan. I would say we have evolved significantly in some of them. Operator00:17:51In others, we are still working it's a work in progress, for example, logistics. And this is no big news. You know what I'm talking about. But I am quite confident with what we've achieved, and the work in the second quarter shows that. We have managed to come up with business solutions even during trying conditions. Operator00:18:23Therefore, I think we are moving ahead, following the plan and the results are quite positive to Ipiranga even though that hasn't really completed our full cycle of recovery. The next question comes from Leonardo Marcalides of Bank of America. Good morning. Thank you for taking my questions. And I have two questions. Operator00:18:57Just a follow-up based on what Duarte has just asked. First, I would like to know more about Ipiranga and the market. Could you please tell us about the availability of products in the market and how availability affects your strategy of commercialization for clients which are more exposed to the spot market? The second question concerns Ultragaz. I would like to ask you to tell us more about pulp. Operator00:19:40We've seen this pulp segment has gained more and more relevance in terms of volume. Could you please elaborate on how the segment has impacted your margins and what are the competitive advantages of Autogas in this specific segment? Now, backpacking on Duarte's question, Lyndon said that July was marginally better than June. So June, was it a more challenging month? Or was it more positive to Ipiranga within the second the third quarter? Operator00:20:25Good morning. Your question about availability is very timely. Ipiranga has no problem of product availability. Ipiranga has no problem of supplying regular customers. And I don't anticipate anything that would say we eventually would get problems in supplying our regular customers. Operator00:20:56We keep on working in the spot market and that's a wide lag in the branded ones. But the spot market is much more exposed to international prices because it's a marginal molecule, so to speak. There will be occasions in which unless the market has a pricey answer that justifies the international cost, it would be very difficult to develop that segment. Brazil has just settling down in this model, and we are still actively involved in it, but understanding that this is a market that is more exposed to international prices. And once again, because this is a very important point, I cannot speak of all suppliers in Brazil, but concerning Ipiranga, there is no problem of supply, no problem of shortage of product. Operator00:22:00Now concerning the month of July, as I said, July was marginally better for Ipiranga, but a very small improvement considering what we expect for the whole industry. We've been dealing with more challenges and trying to come up with solutions that can offset market difficulties. But said that, Cholone was marginally better compared to June and to May. Hi, Leonardo. This is Tabaszari speaking on behalf of Autogas about our position in bulk. Operator00:22:55This is a long term journey, you probably know and for both segments. But focusing on bulk, I think there are 2 possibilities here, things that we've been focusing consistently. We want to be close to our customers. We want to understand and realize what their needs are. We've been launching new solutions for customers and that has meant significant improvement. Operator00:23:27You're also aware of recent investments, which have led to operational efficiency, things which are really relevant to us. And we want to expand, but with operational efficiency, quality of operation. It is a long term process. There is still a lot to be done. But this is one of our focuses here and we've been paying close attention to it. Operator00:24:01Great. Thank you very much for your answers. The next question comes from Greg Scardozo of Credit Suisse. Hello. Good morning. Operator00:24:15I have some questions to Linden, but there is also a follow-up of this topic. But trying to look towards the future, Lyndon, in your answer, you said that the spot market is a market which has prices based on international speed. And my question is what have you anticipated in terms of domestic supplies considering this context where we can see that discrepancy of the price volatility and how it's incorporated by Petrobras. It is a market that's still short, and it needs importation to supply some specific regions where there is less refining capacity, especially in the north and northeast of Brazil. So Linden, tell us how will you anticipate the supply in the future and how to get adapted to it? Operator00:25:21So as a teaser, does it make sense to keep on having your own stations with branded stations, if that will mean excessive capacity, considering your Petrobras codam? So this is the question. And about the disinvestment of some of your stations, what the impact that it has had on volumes, do you use any metrics of cubic meters sold per station comparing that to new stations. Just to understand really how many more stations would have to be sold for you to complete your strategy? Thank you. Operator00:26:13[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Good morning, Regis. Well, Petrobras is still the main supplier of Ipiranga regardless of the circumstances. This is the partner that gives us really the confidence of supply that we need to operate and this is going to remain so. Petrobras does not supply the whole market. There is a deficit, which means imports. Operator00:26:47And in Pralto, we'll keep on importing the product. We've got ready for that. We have our supply area ready to purchase from all over the world. We are going to do it competitively. And I really think that the Brazilian market, the Brazilian market pricing will get adjusted to the model in which you have Petrobras price and imported prices. Operator00:27:14Marginal molecules are more exposed to the spot volume and this is how we have addressed it. And this is how the market will get settled. But whether we should keep on investing or not, well, interesting for me because investments of quality are always worth making because there is a natural churn in the network, and you naturally make replacements. And just referring back to your point of the closure of stations, it's part of the process. Even though we are dealing with the long tail that we knew you had to close, it's part of our network activities. Operator00:27:58We are always going to make investments of quality. But as we've said right from the beginning, our investments are really we are raising the bar of the quality of investments, and we do that because we want to improve continuously our network. If we get the average of our stations in 2021, it was below 170 cubic meters. The average today is over 220 cubic meters. That's the average of our current stations. Operator00:28:27So it means healthier business. Here we have investments over 330 cubic meters and some of these investments on average of 40 cubic meters. So yes, it's worth investing provided that they are investments of quality. Otherwise, it would make no sense. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] I think I've answered all your questions, but if you want to hear anything else, please let me know. Operator00:28:57No, that's it. Thank you very much. Great results, guys. The next question comes from Nat Bill Sinteld from UBS. Hello, good morning. Operator00:29:11Thank you for taking the questions. The first one about capital allocation and diversification. Question may tell me perhaps, but and there is a whole know how of all the cargo, this kind of format or companies what we've been analyzing, is there still room for purchasing anything larger, different diversification? Thinking about your process, really, more than anything specific. My second question about Ultradask margins are still impacting the results, but it has been a consistent surprise to the market. Operator00:29:58But there are 2 points about maintenance of margins, thinking in the long term, much more than, let's say, 2024. We've been hearing about the regulatory concerns about the regulations over the gas bottling. And how are you dealing with the regulatory risk? And secondly, do you think that these margins levels would open the possibility of replacing sources, maybe going more into natural gas when price of fuel is going down. Wouldn't be a risk of margin just to focus on this specific gas applications you have? Operator00:30:48Thank you for the questions. In terms of capital allocation, we've already told you the experience that we have today because this is the year that we just put an end to the level of investments to go into further leverage and investments. The activity of M and A is constantly really gaining more momentum and considering possibilities. We believe in smaller acquisitions, as you've pointed out, as accelerators of strategies of our both companies. Ipiranga does it as well with its network of stations or let's say with terminals and other operations. Operator00:31:51Our strategy is just to do it to speed up the portfolio, but always analyzing better opportunities with greater volume, but there is nothing mapped so far. We really try to focus on enhancing our analysis and being constantly exposed to what's happening in the market. But 2023 is the year where we strengthen our operations. We are constantly talking about the volatility of the market, but we've been really expanding our operations. We are much better company than we used to be 2 years ago, really creating that critical mass that allows us to do other things. Operator00:32:54But we are still more focused on creating muscles rather than taking any major leaps. Hope I have answered your question. Well, I think you made 2 questions to Autopas. First about the regulatory landscape. In our opinion, regulations here in Brazil are very modern, probably one of the most updated in the world. Operator00:33:25It's been in place for over 20 years. It gives the freedom of choice for end consumers for specific cylinders and bottles And the resellers operation has a very competitive dynamic. We can see space in reducing some uses because LPG is not there yet because of regulatory limitations. Our expectation is to have that expanding further, bringing us some additional potential to LPG. And we can get that with regulations that really makes us operate very safely. Operator00:34:13We have top quality products and by doing that companies can make investments, Ultragaz invests significantly every year in acquisition and requalification of tanks and cylinders. Very appropriate operation, but always with room for, let's say, improvement. When you talk about margins and sustainability, it takes us back to the previous question about the use of bulk and the bottled segment. And as we've told you in previous meetings, Ultragaz is much closer to customers adding service levels to the product. It's not a company that sells only commodity. Operator00:34:59We brings innovation, new uses, operational efficiency, which is an important differential for us taking us to different markets. LPG in our operation has really evolved significantly because the end to end complete solution not only of the molecule has been highly considered and it has helped us expand our relationship with the customers. It's very important in terms of resellers, closer relationship really with our customers. We observe the succession rates, the NPS of our customers. So we are going more from a commodity company to a service provision company and going into a diversification company also offering the products concerning energy. Operator00:35:56We've been building this platform of energy of the future, still have got a lot to do of course, but we've shown a very consistent progression in this area. Great. The next question by Joaquin Aqui from Citibank. Hi. Good morning. Operator00:36:18Thank you for taking my questions. A follow-up on Duarte's question. Could you please tell us more about the pillars, the four pillars of the turnaround of Ipiranga? Which one is the most developed? Which one is lagging behind? Operator00:36:39What are the difficulties you come across? And how long will it take for you to close all the doors, so to speak? I can see that investment in stations is very successful. I don't know if it's an ongoing process or whether we are going to come to a halt, Pietrointolle. And secondly, concerning CapEx against the guidance, it seems that it's somewhat lagging behind. Operator00:37:10Do you expect any spillover? Or will you reach the guidance of the year in all different fronts? Because Ultracargo seems to be the one with taking longer to use its CapEx. So please. These are my questions. Operator00:37:31Concerning the disinvestment and the sales of our stations, we expect to finish this movement now in September, in this quarter, the bulk of it at least. Four pillars. 1 pillar, competitive. This pillar is very important to us, but in our this is something ongoing in our operation. This is something that we have structured quite well. Operator00:38:12The pillar has been completed. And now we are going to keep on fine tuning our policies to have stable competitive position and policies which are in sync with the market. The pillar of trading has evolved significantly as well. When we launched this pillar at first, we had no structure of trading at that time. Today, we have a very robust trading structure with a capacity to originate products wherever we are, always adding value. Operator00:38:47And it has contributed to reducing the issues we faced in the Q2. And similarly to competitiveness, now we are going to just keep on focusing that as a critical issue for us. The next pillar with engagement has also experienced significant progression in the past 18 months. It has improved our relationship with the network at large. Our processes and policies are much more consistent. Operator00:39:23And this is very important for the network. We are closer to our resellers, which is something expected at Ipiranga. We've expanded the network. We have gained more space in our branded stations. It's a pillar to be maintained. Operator00:39:44The pillar with which we are still working on is logistics and operations because it requires deeper changes of processes, and this is not the first time I mentioned it. I know I'm just being consistent with what was said in the past. But it's a pillar that by the end of the year, it would we will have covered most of what we had intended to be our plan. There are very significant progresses, but the rollout for all over Brazil, for all our distribution bases, it takes time because we are deeply reviewing processes. So as I told you, the part of selling the stations and these investments will be completed by September. Operator00:40:39Next we will talk about CapEx. Well, concerning CapEx and similarly to previous years, we just forecast and there is some seasonality of the investments in expansions and branded operations concentrating more on the second half of the year. And this year is not going to be different because it's not a linear plan. That's great. Thank you. Operator00:41:14Thank you. If there are no further questions, I would like to hand it back to Mr. Rodrigo Pisenato for his closing remarks. Well, let me thank you all for your questions and for your interest. Let me remind you that the questions that were submitted through the webcast will be answered by our Investor Relations team. Operator00:41:39And on September 5, we are going to have our Ultra Day, and I hope to have you all there with us. Thank you all very much. Thank you. The earnings release call of Ultrapar is completed now. Please hang up now. Operator00:41:54Thank you very much. Have a nice day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallUltrapar Participações Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckInterim report Ultrapar Participações Earnings HeadlinesUltrapar: The Worst Is OverApril 18, 2025 | seekingalpha.comUltrapar Participações S.A. 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Front-running Buffett has never been more urgent — and four tiny miners could be your ticket to 100X gains.May 5, 2025 | Golden Portfolio (Ad)Ultrapar Approves New Incentive Plan to Boost Employee EngagementApril 3, 2025 | tipranks.comUltrapar Participacoes SA (UGPm)April 2, 2025 | investing.comUltrapar Participacoes S/A CEDEARMarch 23, 2025 | wsj.comSee More Ultrapar Participações Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Ultrapar Participações? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Ultrapar Participações and other key companies, straight to your email. Email Address About Ultrapar ParticipaçõesUltrapar Participações (NYSE:UGP), through its subsidiaries, operates in the energy and infrastructure business in Brazil. The company distributes liquefied petroleum gas to residential, commercial, and industrial consumers, in addition to renewable electricity and compressed natural gas. It also operates in the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants; and holds AmPm convenience stores and provides JetOil lubricant services. In addition, the company operates liquid bulk storage terminals. Further, it offers digital payments services, combining the abastece aí app and the loyalty program Km de Vantagens. It also exports its products and services to customers in Europe, Singapore, the United States, Canada, other Latin American countries, and internationally. 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There are 2 speakers on the call. Operator00:00:00Good morning. Thank you for waiting. Welcome to our earnings presentation of UltraPure to present the results of the Q2 'twenty three. There is also a simultaneous webcast that may be accessed through Ulta Par's website at rr.ultra.com.ur and MZiQ platform. The presentation will be conducted by Mr. Operator00:00:29Rupi Gopecenato, Ultrapar's Chief Financial and Investor Relations Officer. And then the Q and A session will have also with us Mr. Marcus Groots, Ultrapar's CEO and the CEOs of the businesses, Mr. Spadagio Bertelli, Dapo Morao and Leonardo Linden. We would like to let you know that this event is being recorded, and all participants will be in listen only mode during the company's presentation. Operator00:00:59After each of our remarks, there will be a question and answer question. At that time, further instructions will be given. We remind you that questions, which will be answered during the Q and A session, may be posted in advance in the webcast. A replay of this call will also be available for 7 days immediately after it's finished. Before proceeding, we would like to emphasize that forward looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Operator00:01:49Forward looking statements are based on the beliefs and assumptions of Utropar Management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Ultrapar and could cause results to differ materially from those expressed in such forward looking statements. Now I would like to turn over to you Mr. Rodrigo Pitonato. Operator00:02:37He is going to begin the conference. Please, Mr. Pitonato, you have the floor. Speaker 100:02:47Good morning, everyone. It is a pleasure to be here once more to talk about Ultrapar's results. Starting on Slide number 2, I remind you that at this moment, both the earnings release and this presentation consider Ultrapar's data from continuing operations in 2023. As for 2022, the company's data is presented in the pro form a view considering the sum of continuing and discontinued operations as disclosed throughout last year, unless otherwise indicated. Moving now to slide number 3 with Ultrapar's consolidated results. Speaker 100:03:19As you can see in the chart in the upper left side, our recurring EBITDA from continuing operations totaled BRL933 million in the Q2 of 2023, 15% lower year over year due to the lower EBITDA of Piranga, partially offset by higher EBITDAs of Ultragas and Ultracargo. Ultracargo's net income was R239 $1,000,000 in the 2nd quarter, 48% lower year over year due to the lower EBITDA from continuing operations, the capital gain of BRL289 1,000,000 from the sale of Oxyten in the Q2 of 'twenty 2 and the higher depreciation and amortization. These effects were attenuated by lower net financial expenses despite the higher CDI, mainly due to the positive one off result of BRL47 1,000,000 in mark to market of hedges in this Q2 of 2023, compared to the negative one off of BRL272 million in the Q2 of 'twenty two. Our Board of Directors, as we have already informed, approved the payment of BRL274 million in interim dividends referring to the year 2023, equivalent to BRL0.25 per share. Investments from continuing operations totaled BRL385 1,000,000 in the 2nd quarter, 5% lower than that of the Q2 of 'twenty two, mainly due to lower investments at Ultracargo and Ipiranga, partially offset by higher investments at Ultragas. Speaker 100:04:46We had an operating cash generation of BRL898 1,000,000 in the 2nd quarter, compared to a generation of BRL376 1,000,000 in the same period of last year, resulting from lower investments in working capital on the back of fuel price reductions. The operating cash generation in the 2nd quarter was BRL1 million if we exclude the reduction of BRL301 1,000,000 in the draft discount balance. And moving now to slide 4 to talk about our reliability management. We ended the 2nd quarter with a net debt of BRL8 1,000,000,000, a reduction of BRL252 1,000,000 compared to March 23, due to the operating cash generation, even if we consider the reduction of BRL301 1,000,000 in the direct discount balance in the second quarter. Our leverage remained practically stable at 2.1 times net debt to EBITDA in June 23 on the back of the lower last 12 months EBITDA from continuing operations despite the reduction in net debt that I've just mentioned. Speaker 100:05:48I'd like to point out that the numbers of our net debt do not include pending receivables of BRL1.1 billion related to the sales of Oxiteno and Extra Pharma. We raised BRL1.18 billion in agribusiness receivable certificates at the cost of 104.8 percent of the CDI of that RBL618 1,000,000 in June and RBL400 1,000,000 in July, which extends our debt profile at the yearly lowest cost for equivalent issuances in Brazil. We've included at the bottom of this slide a table with the total amount of direct discount and vendor lines as well as pending receivables from the sales of Oxiteno and Extra Pharma, all lines highlighted in our balance sheet. The net debt of June 23, adding the direct discount, vendor and divestment of receivables would be BRL8.8 billion, which is BRL1.746 billion lower than the balance of June 22 1 year ago. And moving now to the next slide, slide number 5 to talk about another excellent quarter of Ultragaz. Speaker 100:06:51The volume Magal PG sold in the Q2 was 4% higher year over year due to the 2% increase in the bottled segment on the back of greater market demand. The bulk segment in turn grew by 8% with higher sales mainly due to industries. Ultragaz SG and A in the Q2 of 'twenty three was 15% higher than that of the Q2 of 'twenty two due to 3 main factors. The first refers to higher expenses with personnel, mainly collective bargaining agreements in variable compensation in line with the progression of results and a larger headcount due to the recent acquisitions. The second factor is the higher expenses with freight resulting from higher sale volumes. Speaker 100:07:32Additionally, we also had higher expenses with sales commissions. The disposal of assets line totaled BRL7 1,000,000 in the 2nd quarter as a result of the concentration of operating asset sales. With that Ultragaz EBITDA totaled BRL405 million, 55 percent higher year over year. This growth is mainly explained by efficiency and productivity initiatives implemented in the last quarters by higher sales volume with better mix and by inflation pass through despite higher expenses. For the current quarter, we expect Ultragaz to maintain its good operating performance with seasonally stronger volumes. Speaker 100:08:09Moving now to slide 6 to talk about another great quarter of Ultracargo. The company's average installed capacity was 955,000 cubic meters in the Q2 of 'twenty 3, stable in relation to the Q2 of 'twenty 2. The cubic meters sold increased by 6% due to increased handling of fuels in Santos and Itaqui, mainly resulting from higher spot sales, especially diesel as a consequence of greater supply in the market, in addition to higher handling of chemicals in Aratu. Ultracargo's net revenues were BRL257 1,000,000 in the 2nd quarter, 19% higher year over year as a result of higher cubic meters sold, the spot sales I've just mentioned and higher tariffs. Combined costs and expenses were 14% higher than those of the Q2 of 'twenty two as a result of higher personnel expenses, mainly collective bargaining agreement and variable compensation also in line with the progression of results. Speaker 100:09:05We also had higher expenses with advisory and consultancy services linked to expansion projects and maintenance costs. In the Q2 of 'twenty 3, Ultracargo concluded the sale process of its stake in Union Vopac at the Parana Gua terminal, which resulted in a positive effect of BRL8 1,000,000 in the share of profit of subsidiaries, joint ventures and associates line. Ultracargo's EBITDA with that totaled BRL161 1,000,000 in the quarter, a growth of 24% year over year due to higher capacity occupancy with profitability gains, higher tariffs, productivity and efficiency gains and the share of profitability of subsidiaries result I've just mentioned. EBITDA margin was 63% in the 2nd quarter, 3 percentage points above that of the Q2 of 'twenty two. And for the Q3, we expect Ultracargo to continue its good operating performance with results similar to those of the previous quarters. Speaker 100:10:02And to conclude this presentation, moving now to slide 7, let's talk about the Piranga's results. Volumes sold in the quarter remained stable compared to the Q2 of 'twenty two with a 7% growth in the auto cycle with greater share of gasoline to the detriment of ethanol in the product mix. On the other hand, diesel fell by 5%, mainly due to the strategy of lower sales to the spot market during the period. We ended the 2nd quarter with a network of 6,281 service stations, 245 stations less than that of them of March 23, which is in line with our strategy of managing the legacy of low potential service stations to review that should be concluded in this Q3. A total of 76 new service stations were added to the network with an average volume contribution of 3 66 cubic meters per month. Speaker 100:10:52On the other hand, 321 service stations were closed with an average volume contribution of 43 cubic meters per month. Despite the reduction of the number of service stations, the net volume effect was positive, reinforcing our strategy of higher density and improve the standards of our service station network. In addition, we ended the quarter with 1553 AMPM stores with same store sales growth of 13% year over year. Ipiranga's SG and A decreased by 5% in the quarter, mainly due to lower freight expenses on the back of reduction in diesel prices and logistics optimization after the vehicle fleet reduction, partially offset by higher provision for doubtful accounts. The other operating results line totaled negative BRL211 million in the quarter, compared to a negative BRL130 million in the Q2 of 'twenty two, mainly reflecting higher costs with Brazilian carbon tax credits and the constitution of extemporaneous tax credits in the Q2 of 'twenty 2. Speaker 100:11:56The disposal of assets line totaled BRL31 1,000,000 in the quarter, resulting from the sale of 6 real estate assets. Ipiranga's EBITDA totaled BRL479 million in the quarter, 43% lower than that of the Q2 of 'twenty two. Recurring EBITDA was BRL448 million in the quarter, 41% lower year over year. The lower EBITDA reflects 2 main factors. 1st, margins pressured by fuel cost reduction throughout the quarter and consequent inventory losses. Speaker 100:12:26I remind you that in the Q2 of 'twenty two, we had few cost increases and inventory gains. The second factor was a worse commercial environment in the Q2 of 'twenty three due to the oversupply of imported products and higher local production. For this Q3, we expect seasonally higher volumes and a gradual recovery of profitability as the market normalizes. And with that, I now conclude my presentation. I appreciate your interest and attention. Speaker 100:12:53And now let's move to the Q and A session in which we are available to answer your questions. Thank you. Operator00:13:06We're now going to open for questions. The first question comes from Thiago Biardi of BTG Pactual. Thiago, you have the floor. Hello, good morning. Thank you for the opportunity. Operator00:14:05I have two questions focused on Ipiranga. And the first one, I think it's alluded to the last sentence that Rodrigo pointed out about expectations for the Q3, gradual recovery of margins. What are the assumptions for the gradual recovery to happen in the Q2? As you've pointed out, there was the impact of loss on inventory levels and the impact of the market, which was had a higher demand than initially predicted. Considering these two drivers that have had a negative impact on the margins of the second quarter, I would like to hear you about how you've analyzing those drivers. Operator00:15:02Is there an expectation of changing prices in recovery of inventory levels? Or do you expect the market not to have a higher offer? And if yes, why? And the second question more in the long run, I remember the first blogs of Marcos and regarding a conference call in the past where we discussed the turnaround of Ipiranga being an issue of software, not hardware. So what our current position is in terms of recovering the software, the strategy, we've seen results with the disinvestments of some of the stations. Operator00:15:52They seem to be positive. What else is missing? Of course, considering what's under your control so that the value proposition of Ipiranga keeps on improving concerning what we have observed in recent years. Thank you very much. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Good morning, Thiago. Operator00:16:13This is Linden speaking. Thank you for your question. First, let's talk about expectations. We have better expectations for the Q3. The Q2 was very challenging for the reasons that you've pointed out, and Rodrigo shared them with us quite clearly. Operator00:16:36July was much better than June, even though still slowly recovering. And in June, the market was affected for the same reasons that had impacted the Q2. But what we are observing and concerning the variables you've pointed out, there is not going to be an impact on inventory losses. We do not expect to have price reductions quite to the opposite. The market is pointing towards increases. Operator00:17:11There is also a volume recovery because of the problems of the market of second market of having excessive offer, excessive product. Our network is operating better in terms of volume in the Q3 and as a consequence, improves margins. In the Q3, we expect to have better results in the second. Now concerning software against hardware perspective, as you pointed out, we are maintaining our 4 pillar plan. I would say we have evolved significantly in some of them. Operator00:17:51In others, we are still working it's a work in progress, for example, logistics. And this is no big news. You know what I'm talking about. But I am quite confident with what we've achieved, and the work in the second quarter shows that. We have managed to come up with business solutions even during trying conditions. Operator00:18:23Therefore, I think we are moving ahead, following the plan and the results are quite positive to Ipiranga even though that hasn't really completed our full cycle of recovery. The next question comes from Leonardo Marcalides of Bank of America. Good morning. Thank you for taking my questions. And I have two questions. Operator00:18:57Just a follow-up based on what Duarte has just asked. First, I would like to know more about Ipiranga and the market. Could you please tell us about the availability of products in the market and how availability affects your strategy of commercialization for clients which are more exposed to the spot market? The second question concerns Ultragaz. I would like to ask you to tell us more about pulp. Operator00:19:40We've seen this pulp segment has gained more and more relevance in terms of volume. Could you please elaborate on how the segment has impacted your margins and what are the competitive advantages of Autogas in this specific segment? Now, backpacking on Duarte's question, Lyndon said that July was marginally better than June. So June, was it a more challenging month? Or was it more positive to Ipiranga within the second the third quarter? Operator00:20:25Good morning. Your question about availability is very timely. Ipiranga has no problem of product availability. Ipiranga has no problem of supplying regular customers. And I don't anticipate anything that would say we eventually would get problems in supplying our regular customers. Operator00:20:56We keep on working in the spot market and that's a wide lag in the branded ones. But the spot market is much more exposed to international prices because it's a marginal molecule, so to speak. There will be occasions in which unless the market has a pricey answer that justifies the international cost, it would be very difficult to develop that segment. Brazil has just settling down in this model, and we are still actively involved in it, but understanding that this is a market that is more exposed to international prices. And once again, because this is a very important point, I cannot speak of all suppliers in Brazil, but concerning Ipiranga, there is no problem of supply, no problem of shortage of product. Operator00:22:00Now concerning the month of July, as I said, July was marginally better for Ipiranga, but a very small improvement considering what we expect for the whole industry. We've been dealing with more challenges and trying to come up with solutions that can offset market difficulties. But said that, Cholone was marginally better compared to June and to May. Hi, Leonardo. This is Tabaszari speaking on behalf of Autogas about our position in bulk. Operator00:22:55This is a long term journey, you probably know and for both segments. But focusing on bulk, I think there are 2 possibilities here, things that we've been focusing consistently. We want to be close to our customers. We want to understand and realize what their needs are. We've been launching new solutions for customers and that has meant significant improvement. Operator00:23:27You're also aware of recent investments, which have led to operational efficiency, things which are really relevant to us. And we want to expand, but with operational efficiency, quality of operation. It is a long term process. There is still a lot to be done. But this is one of our focuses here and we've been paying close attention to it. Operator00:24:01Great. Thank you very much for your answers. The next question comes from Greg Scardozo of Credit Suisse. Hello. Good morning. Operator00:24:15I have some questions to Linden, but there is also a follow-up of this topic. But trying to look towards the future, Lyndon, in your answer, you said that the spot market is a market which has prices based on international speed. And my question is what have you anticipated in terms of domestic supplies considering this context where we can see that discrepancy of the price volatility and how it's incorporated by Petrobras. It is a market that's still short, and it needs importation to supply some specific regions where there is less refining capacity, especially in the north and northeast of Brazil. So Linden, tell us how will you anticipate the supply in the future and how to get adapted to it? Operator00:25:21So as a teaser, does it make sense to keep on having your own stations with branded stations, if that will mean excessive capacity, considering your Petrobras codam? So this is the question. And about the disinvestment of some of your stations, what the impact that it has had on volumes, do you use any metrics of cubic meters sold per station comparing that to new stations. Just to understand really how many more stations would have to be sold for you to complete your strategy? Thank you. Operator00:26:13[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Good morning, Regis. Well, Petrobras is still the main supplier of Ipiranga regardless of the circumstances. This is the partner that gives us really the confidence of supply that we need to operate and this is going to remain so. Petrobras does not supply the whole market. There is a deficit, which means imports. Operator00:26:47And in Pralto, we'll keep on importing the product. We've got ready for that. We have our supply area ready to purchase from all over the world. We are going to do it competitively. And I really think that the Brazilian market, the Brazilian market pricing will get adjusted to the model in which you have Petrobras price and imported prices. Operator00:27:14Marginal molecules are more exposed to the spot volume and this is how we have addressed it. And this is how the market will get settled. But whether we should keep on investing or not, well, interesting for me because investments of quality are always worth making because there is a natural churn in the network, and you naturally make replacements. And just referring back to your point of the closure of stations, it's part of the process. Even though we are dealing with the long tail that we knew you had to close, it's part of our network activities. Operator00:27:58We are always going to make investments of quality. But as we've said right from the beginning, our investments are really we are raising the bar of the quality of investments, and we do that because we want to improve continuously our network. If we get the average of our stations in 2021, it was below 170 cubic meters. The average today is over 220 cubic meters. That's the average of our current stations. Operator00:28:27So it means healthier business. Here we have investments over 330 cubic meters and some of these investments on average of 40 cubic meters. So yes, it's worth investing provided that they are investments of quality. Otherwise, it would make no sense. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] I think I've answered all your questions, but if you want to hear anything else, please let me know. Operator00:28:57No, that's it. Thank you very much. Great results, guys. The next question comes from Nat Bill Sinteld from UBS. Hello, good morning. Operator00:29:11Thank you for taking the questions. The first one about capital allocation and diversification. Question may tell me perhaps, but and there is a whole know how of all the cargo, this kind of format or companies what we've been analyzing, is there still room for purchasing anything larger, different diversification? Thinking about your process, really, more than anything specific. My second question about Ultradask margins are still impacting the results, but it has been a consistent surprise to the market. Operator00:29:58But there are 2 points about maintenance of margins, thinking in the long term, much more than, let's say, 2024. We've been hearing about the regulatory concerns about the regulations over the gas bottling. And how are you dealing with the regulatory risk? And secondly, do you think that these margins levels would open the possibility of replacing sources, maybe going more into natural gas when price of fuel is going down. Wouldn't be a risk of margin just to focus on this specific gas applications you have? Operator00:30:48Thank you for the questions. In terms of capital allocation, we've already told you the experience that we have today because this is the year that we just put an end to the level of investments to go into further leverage and investments. The activity of M and A is constantly really gaining more momentum and considering possibilities. We believe in smaller acquisitions, as you've pointed out, as accelerators of strategies of our both companies. Ipiranga does it as well with its network of stations or let's say with terminals and other operations. Operator00:31:51Our strategy is just to do it to speed up the portfolio, but always analyzing better opportunities with greater volume, but there is nothing mapped so far. We really try to focus on enhancing our analysis and being constantly exposed to what's happening in the market. But 2023 is the year where we strengthen our operations. We are constantly talking about the volatility of the market, but we've been really expanding our operations. We are much better company than we used to be 2 years ago, really creating that critical mass that allows us to do other things. Operator00:32:54But we are still more focused on creating muscles rather than taking any major leaps. Hope I have answered your question. Well, I think you made 2 questions to Autopas. First about the regulatory landscape. In our opinion, regulations here in Brazil are very modern, probably one of the most updated in the world. Operator00:33:25It's been in place for over 20 years. It gives the freedom of choice for end consumers for specific cylinders and bottles And the resellers operation has a very competitive dynamic. We can see space in reducing some uses because LPG is not there yet because of regulatory limitations. Our expectation is to have that expanding further, bringing us some additional potential to LPG. And we can get that with regulations that really makes us operate very safely. Operator00:34:13We have top quality products and by doing that companies can make investments, Ultragaz invests significantly every year in acquisition and requalification of tanks and cylinders. Very appropriate operation, but always with room for, let's say, improvement. When you talk about margins and sustainability, it takes us back to the previous question about the use of bulk and the bottled segment. And as we've told you in previous meetings, Ultragaz is much closer to customers adding service levels to the product. It's not a company that sells only commodity. Operator00:34:59We brings innovation, new uses, operational efficiency, which is an important differential for us taking us to different markets. LPG in our operation has really evolved significantly because the end to end complete solution not only of the molecule has been highly considered and it has helped us expand our relationship with the customers. It's very important in terms of resellers, closer relationship really with our customers. We observe the succession rates, the NPS of our customers. So we are going more from a commodity company to a service provision company and going into a diversification company also offering the products concerning energy. Operator00:35:56We've been building this platform of energy of the future, still have got a lot to do of course, but we've shown a very consistent progression in this area. Great. The next question by Joaquin Aqui from Citibank. Hi. Good morning. Operator00:36:18Thank you for taking my questions. A follow-up on Duarte's question. Could you please tell us more about the pillars, the four pillars of the turnaround of Ipiranga? Which one is the most developed? Which one is lagging behind? Operator00:36:39What are the difficulties you come across? And how long will it take for you to close all the doors, so to speak? I can see that investment in stations is very successful. I don't know if it's an ongoing process or whether we are going to come to a halt, Pietrointolle. And secondly, concerning CapEx against the guidance, it seems that it's somewhat lagging behind. Operator00:37:10Do you expect any spillover? Or will you reach the guidance of the year in all different fronts? Because Ultracargo seems to be the one with taking longer to use its CapEx. So please. These are my questions. Operator00:37:31Concerning the disinvestment and the sales of our stations, we expect to finish this movement now in September, in this quarter, the bulk of it at least. Four pillars. 1 pillar, competitive. This pillar is very important to us, but in our this is something ongoing in our operation. This is something that we have structured quite well. Operator00:38:12The pillar has been completed. And now we are going to keep on fine tuning our policies to have stable competitive position and policies which are in sync with the market. The pillar of trading has evolved significantly as well. When we launched this pillar at first, we had no structure of trading at that time. Today, we have a very robust trading structure with a capacity to originate products wherever we are, always adding value. Operator00:38:47And it has contributed to reducing the issues we faced in the Q2. And similarly to competitiveness, now we are going to just keep on focusing that as a critical issue for us. The next pillar with engagement has also experienced significant progression in the past 18 months. It has improved our relationship with the network at large. Our processes and policies are much more consistent. Operator00:39:23And this is very important for the network. We are closer to our resellers, which is something expected at Ipiranga. We've expanded the network. We have gained more space in our branded stations. It's a pillar to be maintained. Operator00:39:44The pillar with which we are still working on is logistics and operations because it requires deeper changes of processes, and this is not the first time I mentioned it. I know I'm just being consistent with what was said in the past. But it's a pillar that by the end of the year, it would we will have covered most of what we had intended to be our plan. There are very significant progresses, but the rollout for all over Brazil, for all our distribution bases, it takes time because we are deeply reviewing processes. So as I told you, the part of selling the stations and these investments will be completed by September. Operator00:40:39Next we will talk about CapEx. Well, concerning CapEx and similarly to previous years, we just forecast and there is some seasonality of the investments in expansions and branded operations concentrating more on the second half of the year. And this year is not going to be different because it's not a linear plan. That's great. Thank you. Operator00:41:14Thank you. If there are no further questions, I would like to hand it back to Mr. Rodrigo Pisenato for his closing remarks. Well, let me thank you all for your questions and for your interest. Let me remind you that the questions that were submitted through the webcast will be answered by our Investor Relations team. Operator00:41:39And on September 5, we are going to have our Ultra Day, and I hope to have you all there with us. Thank you all very much. Thank you. The earnings release call of Ultrapar is completed now. Please hang up now. Operator00:41:54Thank you very much. Have a nice day.Read morePowered by