Ultrapar Participações Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 29, 2024

There are 2 speakers on the call.

Operator

Good morning. Thanks for waiting. We would like to welcome everyone to the conference call of Ultrapar's 4th Quarter 2023 Results. There is also a simultaneous webcast that may be accessed through the Ultrapar's website atri. Ultra.com.br and MZiQ platform.

Operator

This presentation will be made by Rodrigo Pecinato, Ultrapar's Chief Financial Officer and Investor Relations Officer. During the Q and A session, we will also have Mr. Marcos Luz, Ultrapar's CEO the CEOs of Ultragaz and Ipiranga Mr. Tabasara Bertelli and Mr. Leonardo Linden and also the CFO of Utrakago, Mr.

Operator

Andres Ia. 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. After Ultrapar's remarks, we will start our Q and A session. At that time, further instructions will be given to you. We would like to remind you that all participants in the webcast may submit their questions through our website, questions that will be answered during the Q and A session.

Operator

The replay of this call will be available for 7 days once it's completed. Before moving on, we would like to let you know that forward looking statements that are made during this conference are under the Safe Harbor of the Securities Litigation Reform Act of 1996. Forward looking statements are based on the beliefs and assumptions of Ultrapar Management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events. Therefore, they depend on circumstances that may or may not occur in the future.

Operator

Investors should understand that general economic conditions, industry conditions and other operating factors can also affect the future results of Ultrapar and can cause results to differ materially from those expressed in such forward looking statements. Let me now turn it over to Mr. Rodrigo Pecinato. He is going to start by giving us the presentation. So please move on.

Speaker 1

Good morning, everyone. It is a pleasure to be here once more to talk about Ultrapar's results. I will start with a brief retrospective of 2023. Last year, we had significant improvements in the company even with an environment of volatility and uncertainties. Ipiranga, Ultragard and Ultracargo, our 3 main businesses, reached record results.

Speaker 1

The strong operating cash generation allowed the company to achieve the lowest financial leverage level of the last 15 years and contributed to the recovery of our investment grade rating by Eastern imports. We completed the acquisitions of Stellanel Gas by Utragas and the acquisitions of Volkla and Maldonopoulos Base by Utrakarago. We also announced the construction of the 1st liquid bulk terminal in the Tocantin state. Additionally, we obtained the approval of the antitrust authority, GADI, for the partnership between Ultragaz and Supergas Brass for sharing operating assets. And we also continued our ESG journey, making public commitments to the 2,030 goals.

Speaker 1

I will now go through our earnings presentation for the Q4 and the year of 2023. And on the Slide number 2, I remind you that both the earnings release and this presentation consider Ultrapara'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 unless otherwise indicated. Moving on to Slide 3 with Ultrapar's consolidated results. As you can see in the chart in the upper left side, our recurring EBITDA of continuing operations totaled BRL1666 1,000,000,000 in the Q4 of 2023, 122 percent higher year over year.

Speaker 1

This increase is due to the higher EBITDA of the 3 main businesses, particularly Ipiranga, results that I will detail in the next slides. Looking at the year's results, our recurring EBITDA from continuing operations totaled BRL5615 1,000,000, a 55% growth over 2022, with record results registered at the Piranga, Ultragaz and Ultracargo. Ultracargo's net income was of BRL2.518 billion in 2023, 37% higher than that of 2022 due to the EBITDA growth and the lower level of net financial expenses. These effects were partially offset by the lower recognition of extraordinary tax credits, BRL408 million below the level of 2022. Our Board of Directors, as we have already announced, approved the additional distribution of BRL440 1,000,000 in dividends, equivalent to $0.40 per share.

Speaker 1

It will be paid as from March 15, in addition to the payment made in August last year, totaling a distribution of BRL713 1,000,000 in 2023. Investments from continuing operations totaled BRL1.949 billion in 2023, 11% above 2022 due to higher investment at Ipiranga, Ultragaz and Ultracargo. We had a robust operating cash generation of BRL 3,800,000,000 in 2023, BRL 1,800,000,000 above the cash generation of 2022. This increase is due to the higher EBITDA and the lower investment in working capital due to the decreases in fuel prices throughout 2023. These effects were partially offset by the BRL 1,600,000,000 reduction in the direct discount line.

Speaker 1

If we exclude this reduction, the operating cash generation in 2023 would have been of BRL5.5 billion. You can also see in the chart in the lower right side, the recovery of the company's profitability in the last 5 years measured by ROCE. And moving now to Slide 4 to talk about our liability management. We ended the year with a net debt of BRL6.1 billion, a reduction of nearly BRL1 billion related to September 2023. This reduction was consequence of the greater operating cash generation despite the concentration of investments in the Q4 last year and the reduction of BRL 135,000,000 net debt draft discount balance in the quarter.

Speaker 1

Our financial leverage was reduced in the last 12 months and went from 1.7 times to 1.1 times in December 2023, the lowest level in the last 15 years as I have already mentioned. The decrease is due to the higher EBITDA with cash generation and consequent reduction in the net debt. And I'd like to point out that the numbers of net debt for the Q4 still do not include pending receivables of BRL924 million related to the sales of Oxiteno and Extra Pharma. You can also see at the bottom of the 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. The net debt of December 2023, adding the dress discount, vendor and divestment receivables, would be BRL6.5 billion, which is BRL2.2 billion lower than the balance of December 22.

Speaker 1

And moving now to Slide number 5 to talk about another excellent quarter for Ultragaz. The volume of LPG sold in the Q4 was 2% lower year over year due to the 5% reduction in the bottle segment on the back of lower market demand, attenuated by an increase of 3% in the bulk segment, mainly reflecting higher sales to industries. In 2023, the volume of LPG sold was 2% higher year over year as a result of the 6% growth in the bulk segment due to greater sales to industry, while the bottles segment remained stable. Ultragazas G and A in the Q4 was 3% lower than that of the Q4 of 'twenty two due to lower expenses with personnel and with expansion in productivity projects. Ultragaz EBITDA totaled BRL406 1,000,000 in the quarter, 11% above the Q4 of 'twenty 2.

Speaker 1

If we look for the year, Ultragaz's EBITDA was BRL 1,648,000,000 in 2023, a growth of 41% over 2022. Both annual and quarterly growth are explained by the initiatives to increase efficiency and productivity implemented in the last quarters by better sales mix and by inflation pass through. And for this Q1, we expect the continuity of the good results, with profitability levels similar to those seen in the Q1 of 'twenty three. And moving now to Slide 6 to talk about another great quarter of Ultracargo. The company's average was 1,067,000 cubic meters in the Q4 of 2023, a growth of 12% over the Q4 of 2022 due to the capacity additions coming from Ofla, Vila do Condi and Hondonopolis throughout the Q3 of 2023.

Speaker 1

These capacity additions still had no material impact on this quarter's results and should begin to gradually contribute in the upcoming months as operations ramp up. The cubic meters sold grew by 16% year over year, mainly due to greater handling of fuels in Santos, Villa DuConte and Itaqui and the start up of operations in Opla and Hondo Napoli. Ultracargo's net revenues was BRL257 million in the Q4 of 'twenty three, 13% higher than that of the Q4 of 'twenty two. In 2023, Ultracargo's net revenues was BRL 1,016,000,000, a 17% growth over 2022. The growth in both comparisons reflects their higher cubic meters sold and spot sales.

Speaker 1

Combined costs and expenses were 6% above that of the Q4 of 'twenty two as a consequence of 2 main factors: higher personnel expenses, mainly collective bargaining agreement and variable compensation in line with the results progression and higher depreciation costs due to the capacity additions. Ultra Cargo's EBITDA totaled BRL155 million in the quarter, 19% higher than that of the Q4 of 2022 due to greater capacity of occupancy with profitability gains, spot sales and productivity and efficiency gains, despite higher expenses. EBITDA margin was 60% in the Q4 of 'twenty three, 3 percentage points above that of the Q4 of 'twenty two. For the year 2023, Ultracargo's EBITDA totaled BRL631 million, a 24% growth over 2022 for the same reasons I just mentioned. EBITDA margin was 62%, 3 percentage points above that of 2022.

Speaker 1

And for the Q1, we expect Ultracargo's good operating performance to with levels close to those seen in the Q4 of 'twenty two. And moving now to Slide 7, let's talk about Ipiranga's results. Volume sold in the quarter increased by 1% over the Q4 of 'twenty two, with a 1% growth in both auto cycle and diesel. For the year 2023, Ipiranga sales volume remained stable year over year with an increase of 2% in the auto cycle and a drop of 1% in diesel. We ended the Q4 of 2023 with a network of 5,877 service stations, 61 more than in September 2023.

Speaker 1

A total of 147 new service stations were added to the network, with an average volume contribution of 301 cubic meters per month. On the other hand, 86 service stations were closed with an average volume contribution of 143 cubic meters per month. We concluded in September the legacy management process of service stations that in the last 2 years registered a net service station closing of 1227 service stations. At the end of this process, we have now a more robust and healthier network. And besides that, we ended the quarter with 1540 AMPM stores with same store sales growth of 8% in the Q4 of 'twenty three.

Speaker 1

I take this opportunity to draw your attention to a partnership that AMPM and Krispy Kreme has just established. We will have exclusivity to sell Krispy Kreme products in our convenience stores in Brazil, which is aligned with the strategy of associating ANPM with iconic brands. Ipiranga's SG and A increased by 36% over the Q4 of 2022 due to 4 main factors: higher personnel expenses, mainly collective bargaining agreement in variable compensation in line with the results progression one off expenses related to the conclusion of the service station closing process of the legacy network higher marketing expenses and a one off positive net effect of credits and provisions of BRL69 1,000,000 registered in the Q4 of 2022. The other operating results line totaled negative BRL131 million in the quarter, a worsening of BRL22 million over the Q4 of 2022, as a result of higher costs with carbon tax credits, attenuated by the higher constitution of extemporaneous tax credits. The line of results from disposal of assets totaled BRL 14,000,000 due to the sale of 6 real estate assets.

Speaker 1

Ipiranga's EBITDA totaled BRL 1,767,000,000 in the quarter. The recurring EBITDA totaled BRL1.170 billion in the quarter, 2 70% above that year over year. The higher EBITDA mainly reflects the continued normalization of the commercial environment in the Q4 of 'twenty three compared to the higher supply of products and inventory losses in the Q4 of 'twenty two. These effects were partially offset by higher expenses in the Q4 of 'twenty three. For the year 2023, Ipiranga's EBITDA totaled BRL4.354 billion.

Speaker 1

Recurring EBITDA totaled BRL3.6 billion, a growth of 68% over 20 22, reflecting the normalization of the commercial environment, partially offset by higher expenses. For the Q1, with the continuation of the normalized commercial environment, we expect profitability levels higher than those of the Q1 last year. However, given the current scenario of higher inventory levels, we expect profitability levels getting close to the ones we saw in 2023. And to conclude this presentation, moving on to Slide number 8, let's talk about the investment plan we just released yesterday. In 2023, the main variation in relation to the plan was the bring service station and to increase our logistics infrastructure was more than offset by divestments such as the Holonopoulos base and the sale of assets besides the postponement of some investments.

Speaker 1

The investment plan for 2024 totaled BRL2.670 billion, which is more than BRL700 1,000,000 above the investment plan in 2023. The allocation of investments through expansion is the main highlight of growth, 47% above that of 2023. At Ipiranga, investments will be mainly directed towards branding stations and expanding logistics infrastructure. At Luxor Gas, the investment focus mainly on new customers in the box segment, on revitalizing and opening points of sale, on optimizing operations due to the consortium with Supergas Brothers and on expanding into new energy solutions following the acquisitions of Nelgas and Stella. At Ultra Cargo, investments will be mainly focused on the construction of the railway branch at Opla, on increasing the installed capacity of Itaqui, Santos and Monopolies and on building the Palma L Energy terminal in the state of Tocantins.

Speaker 1

The portion of the investments for our maintenance will be directed to sustaining the businesses and mainly includes investments in assets, maintenance, renewal of service stations and points of sale, operational safety and information technology. And with that, I now conclude my presentation. I appreciate once more your interest and attention. And let's now move on to the Q and A session in which we are available to answer questions. Thank you very much.

Operator

Thank you. We are going to start now the question and answer session. And it's open for investors and analysts only. The first question comes from Monico Greco, Itau BBA. Please unmute your microphone.

Operator

Hello. Good morning. First, congratulations on the results and everything that you've done throughout the year of 2023. I would like to thank for the opportunity to ask you a question. I have two questions actually.

Operator

First, for Ipiranga, we can clearly see through your data the inflection point of that change from closing down stations to opening stations. There were nearly 60 reduced you've reduced your units, you closed down units in 60%. So tell us more about your strategy of branding, what kind of, let's say, response you've got from the points of sales and how does it interact with the CapEx plan you have for 2024? Because there was a reduction over the numbers from 2023. So we're really wondering how it's all coordinated with your branding strategy for the year?

Operator

Secondly, a question to Ultragaz. How much of the EBITDA of Ultragaz in 2023 came from the other business? Tela, Nelgas, Biomethane. Could you please tell us the breakdown of all these businesses in 2023? And what do you expect to get of results from them in upcoming years?

Operator

Thank you. Good morning. This is Linden speaking. Thank you for your question. Concerning the strategy of branding, it's not changing.

Operator

We cannot separate branding and closing down of stations. We are going to maintain the guidelines that we have been sharing with you for a while, making appropriate selective investments with quality to improve the quality of our network at large. And we are going to maintain the investments in 2024, just adding businesses that we think make sense that it can really add value. So it's not going to change compared to previous years when we talk about branding specifically. About the question concerning Ultragaz, you've talked about all the different energy options for 2023.

Operator

It's neglectable what it has added to the results of the company, but we wanted to keep on expanding in the upcoming years. Nothing very significant for 20 24, but we just expect it to be much more relevant in upcoming years. The next question comes from Thiago Duarte, BTG. Thiago, please unmute your microphone. Hello.

Operator

Good morning. Thank you very much for the opportunity. I have two questions. First, could you please share with us the information about the expansion of Ultracargo? Rodrigo has provided some details about the CapEx and how it's going to be used in 2024 and very much aligned with what you've discussed in the Ultra Day and your understanding as a holding.

Operator

We can see an interiorization of the platform of the assets in Ultracargo and in private entities. But I understand that the dynamic of the business is somewhat different compared to the main basis of Otracago, which is storage by the shores, by the coasts. And the dynamic of profitability of these assets is somewhat different when we think about going more inland rather than being limited by the costs. So tell us a bit more about profitability and payback of the marginal investments you've been made. Also, competitively speaking, what is your reference to try to really have an improved profitability?

Operator

I don't know if you are using ROIC or TIER. What is exactly you are analyzing to think about generating growth at Ultra Cargo in line with the CapEx investments. Now from a broader perspective and thinking about the holding and based on the retrospective description that Rodrigo made, I think there has been an important element, which was margin expansion. So Ipiranga on the second half of the year, Ultragaz and Ultracargo, you've got margin expansion that impacted profit and all your results. So thinking about the beginning of 2024, the margins seem to be aligned with what you had experienced in 2023, but they don't seem to be expanding as much as before.

Operator

So really thinking about growth from now on, would it make sense to anticipate growth of Ultrapar in your 3 business units resulting more from increased volume, each business has its own characteristics, of course. Where do you expect to have an expansion of profit from now on considering the very high level of margins that all the 3 units have already achieved? Thank you. This is Marcos speaking. I'm going to start by answering the second question.

Operator

Ultra, our holding, cannot be simplified by giving you a simple direct answer. So we just don't want margins, we just want volume. No. We have to see the businesses differently. Ultragaz has some segments where we can get expansion of volume going into different regions with different results.

Operator

The go to market produces different margins. We have increased volume in areas where we could obtain also margin expansion. But there are some segments which tend to be more static. And we are also building path towards new business lines where we can expand in volume. And we can see a potential ahead in Ipiranga.

Operator

There is improved margin, but maybe we can have a normalized margin, something that we've been saying for a while. The margin in the industry, it's not something that we think it's fair, something that really pays back the investments of investors. Therefore, we can see space and opportunity to expand further? Ultracargo probably would need to make investments to increase its capacity, its volume. And it's starting to embedding technology, logistic knowledge, added services.

Operator

We want to really offer a complete asset. We are not going to reproduce the model that we used to have at the coast operations. We want to offer more integrated service lines. Cedillo, speaking of margins, this is a simplification, isn't it? It's an oversimplification.

Operator

If you improve efficiency in a number of things, you improve margin. And there are a number of things that end up influencing it all. In distribution, specifically fuel distribution, the new model that has been in place of having distributors selling their own products has brought new technology, knowledge and dynamics what is bought from Petrobras not 100 percent of the demand. So we have created a trading model, so to speak, a sophisticated trading model of supply, of managing the demand, the offer requiring logistic rearrangements, it brings margins. But in all cases, it also brings more volatility.

Operator

And this is something that we have to understand. Well, Thiago, let me emphasize that the investments that we have made are not just inland in the countryside areas. We are also strengthening our maritime terminals. And it has really improved the results of Ultra Cargo. And being expansions, they have better return on investment rates.

Operator

In the side area, as you said, the dynamic is really different. We are speaking about providing logistics solutions. We are speaking about connections with the railway system. It's not only in tanking really. It is a dynamic of using more the assets.

Operator

But in terms of profitability of static tanking, we have a ramp up curve and this is going to give us a profitability according to the standards that we have set at Ultracargo. Thank you for your comments. Of the BRL635 1,000,000 that is going to be used in expansion, how much of that is involving the maritime operations? How much of that is inland? 60% countryside, 40% coast operations.

Operator

Great. Thank you. Our next question comes from Luis Carvalho, UBS. Please unmute your microphone. Hello.

Operator

Thank you very much for taking my question. And I have two questions. The first one, which is a question that I constantly ask about capital allocation. Now you've got to a level of leverage that is very comfortable, close to one time. The company is generating cash.

Operator

And I would like to know how we can anticipate things in 2024. We've seen some assets available in the market, assets that might have some level of synergy and alignment with the company's strategy. But I would like to see the perspectives for the future, especially in terms of portfolio diversification? Or if you have excess cash, would you go more aggressive and then work with investors? Now concerning field distribution, I don't want necessarily to speak only about Ipiranga, but let's hear I would like to hear about the market.

Operator

In the past 10 years, we've seen a number of initiatives that had somewhat masked the market, evolving carriers and so on. And now talking with distributors and resellers, I think the market seems to be more favorable because the GDP has been increasing maybe or because there is better coordination of the initiatives just focusing on more profitability in terms of volume. So maybe Lindon can tell us more about your his expectations about the market and margins for 2024? Thank you. I wouldn't be able to tell you anything that you would like probably.

Operator

We do have a strategy, but I cannot tell you anything about future capital allocation. The company has a balanced position that provides additional movements. We constantly analyze possibilities of capital allocation in other verticals. And we also consider that if there is no capital allocation required, we can maybe share more dividends. I wouldn't be able to tell you more than that.

Operator

What I can tell you is that we have discipline in the use of our cash because we know how hard it is to generate cash during daily operations, loading trucks and ships and delivery. We are not simply allocate capital for no specific reason. We really do it accordingly and looking for businesses of quality that are aligned with our initiatives. If nothing shows up as a potential opportunity, we would share additional dividends. Linden speaking.

Operator

Concerning the expectations for the market, I am optimistic, but carefully. I think you were right. There are factors that are somewhat standardizing the market, so to speak, what Marcos has just said about the opening of the market for imports, for international players, it brings a favorable dynamics to the market combined with the supply by Petrobras. I think it brings positive elements to the market, also tax simplification, not in all products. We still have more to cover, but it has improved already.

Operator

The level of competitiveness will always be high. This is something we are knowledgeable of. We know we have to work by improving our efficiencies to ensure appropriate competitiveness. But there are also challenges, of course. Margins will always suffer the impact of arbitration, of inventory levels in the country and we have to be able to deal with them.

Operator

In Brazil, there is also the chronic problem of the falsification of fuel of the regular fuel market. But I would say that I am optimistic, but always with care. Business normalization anticipates really a more stable environment for fuel distribution. The next question comes from Gabriel Barra, Citi. Please unmute your microphone.

Operator

Hello. Thank you very much for taking my question. I have two questions. First, I would like to understand the margins of the Q1. So better than the Q1 last year, but very similar to the average of the year, which was €155, €160 per cubic meter.

Operator

When we see the situation of the Q1, we've seen the market trying to capture some gains in inventory levels because of increase in tax. But the Q4, there was a loss of inventory levels. The market was had an over demand because of some of the strategies of traders, which tried to carry over the inventory levels to better price scenario in the Q1 of the year. I would like to hear more about that. I don't know if that gain of margin is part of this number or if it's not.

Operator

Was the Q4 very good in trading? And this is not there because of its recurrence. Please tell us more about this dynamic because this is something which is not clear to me. Secondly, I'd like to talk about your tax credit, BRL 560 1,000,000 in the 4th quarter. I know it also includes internal tests that you run-in the end of the year and this is going to be done in the end of this year as well.

Operator

But I would like to know how much space and credit you still have to use in upcoming tests. And There is another situation that is also being brought to the courts in terms of judicialization. So tell us more about this number. What else can we expect to be monetized in upcoming years? Thank you.

Operator

Good morning. I'm going to start with the second question about tax credits. We've defined a methodology of having annual analysis based on the forecast of profitability, which is very conservative and it's a 5 year perspective. Based on this conservative forecast, we account for the exuberance elements or not. We still have got a balance of about R1 $1,000,000,000 And the amount that is brought to the courts is close to the total number of records.

Operator

Now concerning your first question, we are here sharing with you our earnings release. And I just focus everything on the sentence that I used. If you go back there, you will see how we think it, right? This was shared during my presentation. Thank you.

Operator

One last point, and I apologize if I insist, but I want to understand more about trading. Could you explain how it has influenced the results of the Q4? Did it have any more relevant impact that we should not consider to present from now on? I don't know if you can talk about that. If you can, that would be most helpful.

Operator

This is Lindon Spinky. There was nothing extraordinary of trading in the Q4. Good supply activity improves results, but this is part of your distribution businesses. There was nothing extraordinary. This is the work that we've been doing, the natural evolution of our supply, something that we've been discussing in our interactions.

Operator

So it's just life as it is. There was nothing extraordinary. Great. Thank you very much and congratulations on the excellent results. The next question comes from Bruno Montadari, Morgan Stanley.

Operator

Please unmute your microphone. Good morning. Thank you very much for taking the questions. I have one question and some follow-up. The first question, I guess, to Lindon.

Operator

I think everyone has just been focusing at Ipiranga to improve profitability of the business. And I recall you telling us all the points for attention, all of them being addressed. So now let me pick your brain, looking in the mid and long term of Ipiranga, what would be the next steps? What else can be done to improve further the results of the company from now on? Second question about tax credits as well.

Operator

Can you give us some color about the cash effect of these recoveries during 2023? We can go back to the explanatory notes, which was BRL900,000,000 just to see whether you had really used that throughout the year. And one last question for Ultracargo. There has been a significant growth of CapEx for 2024. What can we expect for 'twenty five, 'twenty six?

Operator

Do you think there will be some years where we are going to you'll be investing more than the average? Or should we expect that in 2025, you would be expecting at the same levels as you used to in previous years? Thank you. Well, Bruno, I'm going to be consistent with the pillars that we've been discussing for a while. We still see opportunities.

Operator

And when we look back to the 4 pillars, as I've mentioned in previous occasions, in logistics and distribution, we anticipate still a path to be taken to release some value. So improvement of processes, optimization of exchanges, optimization of our basic operations. I think there are a number of ongoing initiatives at Ipiranga, which are structural initiatives and this is why they take longer than the others to be effectively reached and to reach the level that makes sense. Now speaking of the other three pillars, competitiveness, supply and brand, there is always room for improvement. We have progressed significantly with cash we caught up to the level that we needed and they provided short term results but there is always room to evolve.

Operator

We've seen a change to Ipiranga brand, there are other initiatives in place, we've been working qualitatively If we look at the profile of sales and the volume of Ipiranga, the premium product in our sales mix has been increased. So I think there are a number of open fronts of action that can bring enhanced efficiency. Once again, logistics and distribution are the areas where we can see more room for improvement. Bruno, let me answer your 2 other questions about the use of tax credits in 2023. We used close to BRL 800,000,000 in the year.

Operator

About the question of Ultracargo, just to give you some more information. Ultracargo expands based on long term projects. In Brazil, there is a clear shortage of logistic infrastructure. And there, we can see the major potential of expansion in opening new markets, such as going, for example, more inland. As the projects become a reality, you know a ultra cargo terminal tends to be contracted right from its inception.

Operator

Then we make investments and tell you. We will let you know as the projects become a reality in 2024. We have the expansions that I've already mentioned in my presentation that will be completed during the year. And the more the projects get mature and completed, we will let you know. Great.

Operator

Thank you. If there are no further questions, I would like to hand it back to Rodrigo Pisenato for his closing remarks. Thank you all very much for your attention this morning and hope to see you all in May.

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Key Takeaways

  • Ultrapar delivered record recurring EBITDA growth in 2023 with BRL 5.615 billion (55% YoY), driven by all three core businesses—Ipiranga, Ultragaz and Ultracargo.
  • Strong operating cash flow reduced net debt to BRL 6.1 billion and lowered financial leverage to 1.1x, the lowest level in 15 years, supporting an investment-grade rating recovery.
  • The Board approved an additional BRL 440 million dividend distribution (BRL 0.40 per share), bringing total dividends to BRL 713 million for 2023.
  • Each division posted robust 2023 performance: Ipiranga’s recurring EBITDA rose 68% to BRL 3.6 billion, Ultragaz’s EBITDA grew 41% to BRL 1.65 billion, and Ultracargo’s EBITDA was up 24% at BRL 631 million.
  • The 2024 investment plan totals BRL 2.67 billion—47% above 2023—focused on station branding, logistics infrastructure, new energy solutions and the Tocantins liquid bulk terminal.
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Earnings Conference Call
Ultrapar Participações Q4 2023
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