Ultrapar Participações Q1 2025 Earnings Call Transcript

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May 8, 2025
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Moderator

Good morning. Thank you for waiting. Please be welcome to our conference call earnings release result of Ultrapar for the first quarter of twenty twenty five. Our presentation will be conducted by Rodrigo Pisinato, CEO of Ultrapar and by Alessandro Parares, CFO of Ultrapar. The Q and A session will also have Mr.

Moderator

Dacio Amaral, current CEO of Ultracargo and recently announced as the new CEO of Hydrovias. We also have Mr. Leonardo Linden, CEO of Ipiranga and Mr. Giudu Nogueira, CFO of Ultragrass. This conference is being recorded and will be accessed through the website, ri.ultra.com.br.

Moderator

After the presentation, we are going to start our Q and A session and further instructions will be sent to you later. We'd also like to let you know that this earnings release call will be conducted in Portuguese, and there is an option for simultaneous translation. Click interpretation. For those listening to the conference in English, there is the option of mute original audio. Our presentation will be shared in Portuguese, and there is going to be an English version to be downloaded from the website of the company and chat.

Moderator

Before moving on, we would like to clarify the forward looking statements that may be made during this conference call with respect to business prospects, forecast, operational and financial goals of Ultrapar are all based on beliefs and assumptions of the Executive Board of the company as well as currently available information. Forward looking statements are no guarantee of performance. They involve risks, uncertainties and assumptions as they relate to future events and therefore, depend on circumstances which may or may not occur. Investors should understand that general economic conditions, the market and other operational factors may affect the future performance of Ultrapar and lead to results, which may differ materially from those expressed in these forward looking statements. We'd like now to hand it over to Mr.

Moderator

Rodrigo Pisinato, who will start the presentation. Please, Mr. Pisinato, you may start.

Moderator

Good morning, everyone. It is a pleasure to be here once more to talk about Ultrapar's results. And let's start with the main highlights of the quarter. We maintain Ultrapar's robustness and the continuity of good results despite the volatile scenario in the quarter. The fuel sector continued to be impacted by irregularities for tax evasion, such as not meeting the required biodiesel mix in diesel or B-fourteen and the increasing import on NAFTA to be sold as gasoline.

Moderator

On the other hand, there are two important milestones in the fight against illegal activities. Starting in April, a new law for compliance with carbon tax collections abuse came into effect with severe penalties for noncompliance. And it has just started in May, the single phase taxation of hydrated ethanol for PISCOFINS, which contributes to fair competitive conditions as well as increases government tax collection. Regarding Indrovias, I want to highlight the strong performance in the first quarter of twenty twenty five due to improved navigability conditions and the advancements in the management and operation of the company's assets. We also made progress in Hydrovia's strategic agenda.

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In February, we signed an agreement for the sale of the Cabotage operation in the amount of BRL715 million, increasing its strategic focus and contributing to the reduction of financial leverage. We concluded the BRL1.2 billion capital increase process, which will allow the continuity of its growth agenda, reduction in leverage and generate value for shareholders. As a result of the capital increase, Ultrapar is now the controlling shareholder with more than 50% stake in the company. It signals the confidence in its value creation potential as well as consolidates our role as a long term strategic shareholder. At Ultrapar, we raised a total of R1.4 billion dollars in debt with a low average cost equivalent to 101% of the CDI.

Moderator

With the continuity of financing capacity expansions with development banks. Finally, we concluded Ultrapar's planned leadership succession with Marcos Lutz as the new Chairman of the Board. And in this process, I assume the position of CEO of Trapar and Alessandro Pallares assumed the CFO and Investor Relations position. Well, thank you very much for your attention. I will now take it over to Alessandro, who will detail the quarterly results.

Moderator

Thank you, Rodrigo. Good morning, everyone. It's a pleasure for me to be here for the first time presenting Ultrapar's results. Before starting, I would like to remind you of the reporting criteria and standards used in this presentation. Well, starting with Ultrapan, as we can see, recurring EBITDA totaled R1.322 billion in the first quarter of twenty twenty five, excluding the negative impact from the share of loss of Hydro Villa in the amount of R139 million dollars a result that reflects one of the worst drops in the history in the North And South Corridor.

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Considering this effect, the recurring EBITDA was 9% lower compared to the first quarter twenty twenty four, totaling R1.83 billion dollars The net income for the quarter totaled R502 million excluding the negative impact from the share of loss of Idravias that I just mentioned. Considering this effect, we had 20% drop year over year, which was partially offset by lower financial expenses. CapEx for the period totaled million dollars in the first quarter this year, '5 percent decrease compared to the first quarter last year, mainly due to the lower investments in branding of service stations at Ipiranga, partially offset by higher investments in Ultracargo. We had an operational cash generation of R3 million dollars in the first quarter this year, R576 million higher than the first quarter twenty twenty four, mainly reflecting lower working capital investment and income tax paid. Moving to debt and leverage, as occurred seasonally, our leverage increased in the last quarter from 1.4 to 1.7 times due to the increase in net debt and lower EBITDA in the last twelve months, mainly due to the negative impact of the share of loss of Hydro Villa that I already mentioned.

Moderator

The increase in net debt in the quarter is due to the payments of dividends and shares buybacks totaling R584 million and the investments in working capital resulting from the higher level of working capital needs at Ipiranga, driven by the increase in fuel costs and the seasonal effect of suppliers at the beginning of the year. You can also see at the bottom of this slide breakdown of the total amount of the draft discount and vendor. The net debt as of March 2025 including these two items would be billion which is R1,921 billion higher than the balance in March 2024, mainly due to the receivables from the disinvestments in March 2024. Now moving to Ipiranga, the volumes sold in the quarter remained stable compared to the first quarter of twenty twenty four with a 2% reduction in the auto cycle and 1% increase in diesel affected by the increase in the biodiesel irregularities, growth in naphtha imports for gasoline and the international prices and the Petrobras price that started in February. We ended this first quarter with a network of 5,847 service stations.

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It's 13 fewer than on December 24. We inaugurated 45 service stations and closed 58 throughout the quarter. Furthermore, we ended up the quarter with fourteen forty seven ampm stores with the same store sales growth of 12% in the first quarter twenty twenty five. Ipiranga's SG and A increased by 80% compared to first quarter last year due to higher personnel expenses, especially the collective bargaining agreement as well as one time expenses with the mobilization of the company's fleet. The line of order operating results totaled R105 million dollars negative in the quarter, an improvement of R60 million compared to the first quarter last year as a result of lower expenses with decarbonization credits given the lower price level.

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The line of results from disposal of assets totaled R5 million a reduction of R31 million dollars mainly due to the lower sales of real estate assets. Epirenga's recurring EBITDA totaled million in the quarter, 6% higher year over year. The higher EBITDA mainly reflects higher margins resulting from higher inventory gains in the first quarter twenty twenty five due to the fewer price adjustments and the solution of irregularities in Amapai state after the tax benefit was revoked in April 2024. These effects were partially offset by the increase in irregularities as previously mentioned. International prices under Petrobras prices starting February result in oversupply of products in the market and higher expenses.

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We entered the second quarter with international prices under Petrobras prices even after reductions of more than 12% in diesel costs resulting in inventory losses. We expect a similar profitability of the first quarter excluding the effects of inventory gains and losses for both quarters. Now moving to Traverse results, the volume of LPG sold in the first quarter was 1% higher year over year due to the 2% increase in sales of bottled segments, mainly reflecting the higher market demand, while sales of bulk segment remained stable impacted by lower one offs consumptions in the special gas segments. Ultragaz SG and A in the first quarter twenty twenty five was 17% higher than the first quarter twenty twenty four due to higher personnel expenses mainly due to business acquired and collective bargaining agreement in addition to expenses of prospecting new business and a new marketing campaign. Ultragaz EBITDA totaled million in the first quarter, '2 percent lower than the first quarter last year.

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This decrease is explained by the worst margins mainly due to increasing costs resulting from LPG acquired from auctions held by Petrobras, worse sale mix and higher expenses partially offset by greater contribution from new energies. For the second quarter, although LPG costs continue to be pressured by Petrobras auctions, we expect a recurring EBITDA marginally higher than the same quarter last year. Now moving to Ultracargo to talk about another quarter of consistent results. The company installed capacity remained at ten sixty seven million cubic meters. The cubic meters sold decreased by 4% year over year, mainly due to lower fuel handling Santos and Itaqui, partially offset by increasing handling Opa and the spot operations in Aratu.

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Ultracargo's net revenue was million dollars in the first quarter, '3 percent higher than first quarter last year due to higher spot sales in Aratul and the start of operations in Opland, partially offset by lower volume of fuel handling. Combined costs and expenses were 5% higher than the first quarter last year due to the higher cost of materials and maintenance and the startup on operations in Opala, partially offset by lower personnel expenses and expansion projects. Ultracargo's EBITDA totaled R166 million dollars in the first quarter. It's a 1% higher than the first quarter twenty twenty four due to the spot sales in Aratu and lower personnel expenses and expansion projects partially offset by the lower cubic meters sold with handling of fuels. The EBITDA margin per stacked capacity remained stable at BRL52 per cubic meter compared to the first quarter of twenty twenty four.

Moderator

For the second quarter, we expect an EBITDA similar to that seen in the second quarter of twenty twenty four. Well, with that, I now conclude my presentation. Thank you for your attention. Let's now move on to the Q and A session to answer your questions. Thank you.

Moderator

We're going to start now our question and answer session for investors and analysts. If you want to ask a question, please click reaction and then click raise your hand. If your question is answered, you can leave the queue by lowering the hand. Now to ask a written question, please submit it through the Q and A icon. Tell us your name and company name.

Moderator

These questions are going to be answered later by our Investor Relations team. The first question comes from Gabriel Barra of Citi. The first question concerns Ultragaz and what Valaris mentioned in his presentation. We've seen some changes in terms of regulation, some changes passed by the government, including reference prices, fractioning. Petrobras has recently mentioned that they have been adopting different pricing for industrial and residential use in their auctions.

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So how would that impact LPG? And what is flagging? What should be in our mind in terms of points of attention? Secondly, about Hydrovias. Inevitably, we have to ask you, congratulate you, of course, in your investments and now being able to control the company.

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Dacio, the new CEO. When we consider investments, this is probably the business card, the flagship of this new step of the company. So something in this new era of the company, what are your plans from now on? What would be the main focus of you, Dacio, as the company's CEO? What are the main priorities of Ultra focusing on Hydrovias?

Moderator

What can we expect in terms of capital allocation, balance sheet? We would like to hear more from you. These are my two points. Thank you very much. Hi, Gabriel.

Moderator

This is Giulio speaking. Concerning our social program Vale Gas and gas to all, gas paratodos, programs from the government that have been mentioned, nothing has been formally published yet. We are in favor of it, of course. We think it would be a very good way of employing resources. This is the kind of problem that can be appropriately addressed, taking the benefit to those who really need it.

Moderator

And of course, we are more than interested to support this program for its further development. In terms of regulation, the regulations that we have in Brazil is reference throughout the world. It's modern. It provides an industry always working within the appropriate regulatory standards, and we've been observing the whole process of reform. Regulatory reforms tend to be quite common in Brazil, and we've been actively involved in it.

Moderator

And we hope that the changes that are implemented can improve the business as a whole. Gabriel, thank you very much for your questions. Now concerning Hydrovias, much is already ongoing for the progression of the company. Now DESU joining the company, thanks to what had been done at Ultracargo, the same experience is going to be reproduced here, focused on operational efficiency, increasing the yields, administrative efficiency, leveraging what Ultra already has in our shared service unit and in the holding and also efficiency financial efficiency and excellence. By reorganizing, we can have tax optimization and reduction of the cost of the debt.

Moderator

And at the same time, design the long term development plan of the company. These are the two main points of attention for the upcoming years. Great. Thank you very much. The next question comes from Monique Greco of Itau.

Moderator

Please unmute your mic. Hello. Good morning. Thank you for the opportunity to ask a question. And I have two questions related to Ibranga.

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The first one concerns the impact of open arbitration for exports and imports, considering the drop in gasoline prices and Petrobras has taken some time to react. So how has open arbitration been impacting the inventory prices and the margins of compensation in the first quarter? And secondly, about ethanol single phase taxation, Pisinato said that as of May 1, we had a valid single phase taxation. What is your expectation about the effect of this implementation? Do you expect competitive gains being reflected in margin, volumes?

Moderator

I would like to understand more. Moniki. This is Leonardo Linden. Thank you for the question. First, about Paglieres mentioned in his introduction.

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Since February, this arbitration has been open. And of course, it has an impact in the market. It is something consolidated in Brazil. If you analyze the lineup throughout the types and import amounts and what we can really forecast, we can see a robust channel for supplying the Brazilian market. And as we've always mentioned, it changes somewhat the dynamics of the market.

Moderator

You start observing some segments in Brazil, which are based on marginal molecule references. For example, Jarel, this is how it's done. Petrobras, in turn, has taken frequent price adjustments initiatives, but not enough to put an end to price arbitration. And I think this is going to be how the market, is going to move from now on. The market has a problem outside Petrobras.

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And in terms of supply, the price structure changes because we need additional supply. This is part of the game, really. I haven't seen major changes compared to what we've been observing in recent years, and we have to constantly focus on providing the best profile of supplies, considering the effect it has in the market. Concerning the single phase taxation, and it couldn't be different, really. We see it as a very positive thing.

Moderator

We've been in favor of it for ethanol for a while as a way to reduce the regularity in the sector. We see it having a positive impact. Movements like that take some time to get accommodated, of course. But if everything we've planned happens, the market tends to be benefited because of its efficiency. It is going the single phase taxation is going to bring advantage to who those really who are the most prepared.

Moderator

Share is a consequence of these efficiency. And Ipiranga is very well positioned to keep on working as a very strong distributor of ethanol in a market that has less irregularity. The next question comes from Rodolfo Angeli, JPMorgan. Rodolfo, your microphone is available. Please unmute.

Moderator

I have a question about sourcing of gas at Ultragaz. You've talked about the effect of the auctions. And I'd like to hear what you anticipate. Is it going to be recurrent? Is it a one off effect?

Moderator

And another thing that we've noticed in this quarter, we've open arbitration consumption of your working capital for the company. But looking ahead, how can you offset that? Prices will go down, so releasing working capital with the imports. So please tell us a little more about working capital of Ipiranga in terms of trend. These are my two questions.

Moderator

Thank you all very much. Hi, Rodolfo. This is Giulio speaking. Concerning autogran sourcing, the auction started in the end of 'twenty four in November at limited volumes, and they got more and more prevalent as opposed as of January. What we've seen in April and May indicates that it's getting stabilized, and we do believe it's going to represent five to 10% of the total sourcing of Ultragaz.

Moderator

Now concerning our take on it, this is Rodrigo speaking. This is a sector where the margins are very tight. It's inevitable to adjust prices. We try to minimize any effects to our customers by enhancing efficiency. The effect was present in the first quarter, but it's going to be more regular as of the second quarter.

Moderator

Now, Rodolfo, in terms of capital use and cash use in Ibranga, And I think this is probably clear to all of you. But there had been four effects. One, higher inventory because of a position that we set to use the single phase taxation. There is a second effect, which is the lower payment terms from our suppliers because of less imported product in our profile and an increase in the product cost, which resulted from the price movement by Petrobras. At the same time, offsetting part of that, receivables were paid shorter at Ibranga.

Moderator

So we did take some of our cash in the first quarter, but we expect to pick up in the second quarter. Petrobras is offering prices higher than in the international market. What we can see in the second quarter are price reductions to try to be closer to it, but it's still more expensive than in the international market. The government's saying that Petrobras wants to offer the lowest price of fuel in the country. So this is something that we expect to be corrected soon.

Moderator

Thank you very much. That was very clear. The next question comes from Mattel Zinfeld, UBS. Please unmute your mic. Good morning.

Moderator

I would like to start by wishing all the best to Dessio and Giulio in your new positions. If I didn't get wrong calculations, I got a pro form a leverage of two point o, 2.2 times with Hydrovias. And this is part of an EBITDA of Hydrovias. It's still under pressure. But how is Ultra analyzing the ideal leverage?

Moderator

And looking ahead, does it make sense to analyze a pro form a leverage consolidating Hydrovias, not impacting your capital allocation of the holding. But what would be an ideal value to consider your numbers in the end of 'twenty five and throughout 'twenty six? I would also like to ask about other investments. Today, was big news about investments in TR. What are you thinking about this specific segment?

Moderator

Do you want to go further in this value chain? If you can tell us about additional investments that you are planning to have. Thank you. Morning, Matteos. Thank you for your questions.

Moderator

Concerning leverage and the effect of Hydrovias, with the consolidation of Hydrovias, which is going to happen in the second half of the year, we are not going to have more the share of loss, and we are going to consolidate the results of Hydrovias in all our numbers. That's going to be the effect as of the second half of the year. And in net debt, it will increase the net debt of Ultrapart zero point four, zero point three, zero point four times. As we have cash generation business, the unleveraged will be quickly throughout the third quarter where we traditionally generate more cash. As to TRR, nothing new.

Moderator

This is something that we did at Ultramobility. It is a relatively small movement in a sector where we see good partners, regional operation, which is being operated as it used to be before. Now, Matteo, about MPM, the convenience stores, we can see a potential of growth in our retail business. There are fourteen fifty stores and nearly 6,000 service stations. We still see a lot of potential for growth.

Moderator

So we want to incorporate into our business some brands that can add value to our franchising. For example, Krispy Kreme and other movements are part of this strategy of bringing to convenience stores, products and brands that have high perceived value. Krispy Kreme was a possibility of learning more and more about retail. And we expect that these additional product lines will be available in our stores eventually. Thank you very much.

Moderator

Now the next question, it comes from Vicente Falanga with Bradesco. Please unmute your mic. Good morning, everyone. Thank you very much for the call. Thank you, Olga Barsteen.

Moderator

I have one quick question here about informal practices. We've seen some formal players talking about tax solidarity in Sao Paulo. Would like to know if you agree with that. Have you seen better margins in the state of Sao Paulo? And at the same time, is there any counterpart, any compensation, so to speak, coming from other states?

Moderator

So going from Sao Paulo to other states to try to offset taxes. Yes. There are some important successful fronts. I'm going to talk about that and expand that to further topics. The new law of Renova bill is a very important new law, also the single phase taxation for ethanol as well.

Moderator

This special tax regimens in Sao Paulo are very important. And it brings this concept of taxation solidarity, so to speak. Market has to understand that. And this is, of course, going to reduce tax evasion and punish those that evade taxes. But there's still a lot to do, of course.

Moderator

Brazil has been impacted by the market of NAFTA without taxation. We have to be aware that the laws and the changes have to be enforced, laws that had been included in our regulatory framework to improve the sector. The mixture of biodiesel, the price is going down, but there is still a problem. Not mixing is still interesting for those who want to fail to pay taxes. And there are some states which are not part of the so called confas, which is like a committee that was created last year.

Moderator

And through that, we see those that did not join still evading taxes. Said it all, we can feel some advances. We've seen some progression, especially in states that are more active in the regulated market. We've seen benefits to all of those who participate in the supply chain, benefits to consumers, agents, resellers, distributors to the government. And Sao Paulo is a very good example of that.

Moderator

Sao Paulo state has been fighting irregularities in this industry and has achieved very important outcomes. Well, from our part, we have to keep on working, supporting the initiatives, regulatory agents so that we can have healthy competitive markets. I am optimistic, but I'm a careful optimistic because processes haven't developed as quickly as we expected. And those who work illegally, they are very creative. We have to be very careful and pay constant attention to whatever may come to hit us.

Moderator

Thank you, Linden. The next question comes from Rodrigo Omeida with Santander. Rodrigo, please unmute your mic. Good morning. Let me go back to Hydrovias.

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You've talked about the next steps in terms of your agenda in the company. What can we expect, however, in terms of synergy with Ultracargo? Any operational synergies on the daily practices? Are you working towards that? This is going to help us have more clarity of the explanation you've already provided.

Moderator

Rodrigo, no relevant synergy with Ultracargo and Hydrovias at present. The greatest benefit is to have competitive competent people at Ultracargo who can really dedicate. So we are going to replace some of our headcount. Now Dessio will be our main executive there. We also have a legal, our support counselor who is had also worked at Idrovias.

Moderator

But apart from that, we'd have no synergies identified so far. The next question comes from Bruno Amore, Goldman Sachs. Let me go back to the competition and the distribution of fuels. I do understand all the tax evasion prevention initiatives. But for the past two years, there had been continuous progression.

Moderator

For example, in diesel, smaller players, now the three large players have been gaining market share consistently. There was diesel single phase taxation, gasoline single phase taxation, but the trend has not been reverted. So I'd like to hear from you whether you think it has happened because in addition to the favorable measures for formal players, some other measures were added. Linden said that they tend to be creative. Or do you believe there are competitive players regardless of how they act?

Moderator

How do you see these smaller players, which play by the book, right? Do you see healthy players who have been gaining share legally? So that we can understand if the problem is just informal illegal practices or whether it is a competitive dynamics, right, that would impact the results. I know how informal businesses impact it all, but is there anything else in other words? Now concerning Hydrovias, I know you are going to announce a more concrete plan ahead.

Moderator

But what can we expect? Is it an improved Hydrovias? Is it going to be more efficient in its operation? Or are you planning to open new business lines? Is there anything else you can already share with us?

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Bruno.

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Concerning market dynamics, I think there are the two points you've mentioned, both valid. There is informal practice, and there is a new dynamic of how markets are getting positioned, how the segments are getting positioned in terms of supply. The informal dynamic is what we've called. They are creative. They keep on doing.

Moderator

There are things to focus on. It used to be gasoline. Now it's biodiesel. There has been progression, but there had also been some setbacks. However, it's all still impacting distributors, which act informally and irregularly.

Moderator

But there is a new market dynamic at the same time. Just to reinforce what I have said, it is consolidated once there is a very long period of open arbitration, price arbitration. So markets have to be segmented. If we analyze I'm going to talk about Ibranga. Right?

Moderator

If you analyze the market share lost by Ibranga, it is on the spot market and not contracted share. And spot market is exactly where we have the imports. There are some segments which are supported on spot supply, which is all based on imported product. It changes the dynamic, of course, and there are some regions more focused working on such platform. And even if we considered, they are working accordingly, and they are surfing the wave for their own advantage.

Moderator

The supply market in Brazil is under transformation, And we have to make the right adjustments and model of our operation to focus the segments of main interest. So there are the two issues, irregular practice and a new supply model in Brazil. Good morning, Bruno. About Hydrovias, the company is great. The assets are wonderful.

Moderator

We expect to make the company even better, gaining efficiency with more productivity out of the assets and more capital discipline. At the same time, we are going to work with an expansion plan that we are going to focus on the North Region where we have more possibility of growth of the company. The next question comes from Luis Carvalho, BTG. Please unmute your mic. Hello.

Moderator

Good morning. Thank you for taking my questions. I have two questions here about Ibranga and Hydrovias. Picking back piggybacking on what you've said, Linden. If we observe the share or market share of the three main players in recent years, there has been a significant loss of share.

Moderator

But, it has led to increase margin. Do you think that is going to be a change in this trend Even though it has been in a spot market and less on contracted market, but in the end of the day, it impacts the scales. And you, of course, have to work to avoid losses of margin. So do you think the company market share is fair, is ideal? Or do you expect to gain more share without losing margin?

Moderator

And secondly, asking about Hydrovias, I don't know if it's Pisinato Odessio who can answer that. Hydrovias has positively surprised the market in this quarter. First, do you think that this new level of operation is a level that we can expect for the next twelve to eighteen months? And secondly, what is the kind of capital allocation that you are anticipating for the company? Maybe open have the IPO of the other three businesses.

Moderator

Would it make sense for Hydrovias? Would you plan to close the capital going to a no longer publicly trade company? What are you anticipating? Let me start by answering about the share. The share is focused primarily on spot market.

Moderator

I don't like to consider it as a loss because we actively decided not to be part of the market within the size it has. It's very low profitability market. So we decided we opt out. Of course, we want to have stronger and stronger position, but as a consequence, the share is a consequence of good regulatory dynamic, better than what we currently have. But what's in our power is to recover or to expand our businesses, by enhancing efficiency.

Moderator

And, we have our initiatives to do that, efficiency to get better logistics. ERP is being revisited. We are constantly fine tuning our profile of supplies, understanding the market dynamics. Our investments have been well thought to attract investments that add value to our supply chain. A lot of cost discipline always and support of Ibranga to all applicable agencies to fight illegal market.

Moderator

So I don't think the share is an objective. It's a consequence. We have to strike the best balance and then share increases. It is a result of our capacity to generate results and efficiency. Concerning Hydrovias, just to set the context, to set the background, the main driver of results of Hydrovias is the fact that we have a crop being now distributed.

Moderator

So the company pick of the companies on the second and third quarter of the year. There is an additional element, which is the hybrid element. So seasonality, rain, but it has improved the draft of Rio Paraguay. It has increased navigability even in periods of lower water availability. So that's what we are observing.

Moderator

The main driver is always distribution of the crops. And at the same time, the water conditions and seasonality, the water in terms of river conditions, right? In terms of capital, we have no plans of closing the capital and start negotiating them outside the stock market. Well, our question and answer session is finished. Now I would like to hand it over to Alessandro Pailaris for his closing remarks.

Moderator

Well, thank you very much for your time, your interest, and our Investor Relations team is at your availability for any follow-up questions. Thank you all very much. Our earnings release call is finished now. Thank you all very much for your participation. Have a great day.

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Ultrapar Participações Q1 2025
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