Ultrapar Participacoes Q4 Earnings Call Highlights

Ultrapar Participacoes (NYSE:UGP) reported what management described as another year of significant growth in 2025, highlighting record operating cash generation and its highest fourth-quarter recurring adjusted EBITDA. During the company’s earnings call to discuss fourth-quarter and full-year 2025 results, executives emphasized disciplined execution, progress on regulatory initiatives, and investments aimed at expansion and efficiency.

Record cash generation and dividends

CEO Rodrigo Pizzinatto said the company closed the year with “the highest recurring Adjusted EBITDA ever recorded in a fourth quarter,” and that the operating improvement was “directly reflected in cash.” Ultrapar generated record operating cash flow of BRL 5.5 billion in 2025, which helped it end the year with net leverage of 1.7x, even after an anticipated dividend payment of BRL 1.1 billion in December. Excluding that anticipated payment, management said leverage would have been 1.5x.

Including the anticipated payment and regular dividends, Ultrapar distributed BRL 1.4 billion in dividends in 2025, which Pizzinatto said was equivalent to BRL 1.30 per share and a 7% dividend yield.

Consolidated results: recurring performance improved despite non-recurring impacts

CFO Alexandre Palhares reported consolidated Adjusted EBITDA of BRL 1.6 billion in the fourth quarter, a 34% decrease year over year, which he attributed to non-recurring effects referenced in the company’s earnings release. For the full year, adjusted EBITDA was BRL 6.8 billion, up 2% versus 2024.

On a recurring basis, fourth-quarter EBITDA increased. Palhares said recurring EBITDA was BRL 1.7 billion in the quarter, up 36% year over year, driven mainly by better performance at Ipiranga and Ultragaz, plus the effect of consolidating Hidrovias. For the year, recurring EBITDA totaled BRL 6.2 billion, up 15% from 2024, with Hidrovias consolidated beginning in May.

Net income for the fourth quarter was BRL 256 million, down 71% year over year, also impacted by non-recurring items. Excluding those effects, Palhares said fourth-quarter net income would have been BRL 439 million, a 49% increase. For 2025, net income was BRL 2.5 billion, which he said was stable year over year as record operating results were partially offset by higher depreciation and amortization and increased financial expenses related to the consolidation of Hidrovias.

Cash flow, capital allocation, and leverage

Palhares said operating cash generation of BRL 5.5 billion was driven by: higher operating results, the consolidation of Hidrovias (a contribution of BRL 855 million), and lower working capital needs—especially at Ipiranga—partially offset by the settlement of BRL 1 billion in draft discount for suppliers.

Capital expenditures totaled BRL 2.5 billion in 2025, up 15% from 2024. Palhares attributed the increase to higher Ipiranga investments and BRL 235 million of Hidrovias investments that were not in the initial plan, offset in part by lower Ultracargo investments. Management later said total 2025 investments were about half expansion and half maintenance and other categories; excluding Hidrovias’ unplanned BRL 235 million, investments would have been 9% below plan.

On capital allocation activity, Palhares cited transactions including a capital increase and Ultrapar’s increased stake in Hidrovias totaling BRL 693 million, acquisition of TRRs totaling BRL 103 million, and the Virtual GNL transaction of BRL 36 million in the year. He also noted Hidrovias completed the sale of its coastal navigation operation for BRL 750 million, and Ultrapar concluded a share buyback program.

Ultrapar ended 2025 with net debt of BRL 12.1 billion and leverage unchanged at 1.7x versus the prior quarter. Palhares said the year-over-year increase in net debt mainly reflected Hidrovias consolidation (an impact of BRL 2.2 billion) and the effect of reducing draft discount by BRL 1 billion over the period.

In the Q&A, Pizzinatto also addressed why financial assets rose alongside higher gross debt, saying Ultrapar anticipates funding to avoid accessing markets during volatile periods. He pointed to the company’s average cost of debt (excluding bonus) being below 100% CDI, “no cost of carryover,” and near-term maturities of BRL 4.5 billion due in 2026.

Business unit highlights and 2026 outlook comments

• Ipiranga: Fourth-quarter volume rose 7% year over year (Otto cycle +8%, diesel +6%) as the market began recovering following intensified measures against irregularities, according to Palhares. Adjusted EBITDA of BRL 1.2 billion was down 37% due to nearly BRL 1 billion in extraordinary credits recognized in 4Q24; recurring adjusted EBITDA was BRL 1.1 billion, up 26%, reflecting higher volumes and better margins partially offset by higher expenses. Operating cash generation reached BRL 4.3 billion, up 41% year over year. CEO Leonardo Linden said margins strengthened through the quarter, with December stronger, which he associated with an improving commercial landscape tied to actions against the illegal market. Linden described January market-share pressure as likely “a one-off effect” linked to high inventories during an open import arbitrage window.
• Ultragaz: LPG volume sold fell 2% in 4Q25 and 2% for the year, with declines attributed to industrial demand and competitive dynamics influenced by the pace of pass-through of Petrobras auction cost increases. Still, recurring EBITDA in the quarter was BRL 474 million, up 7%, reflecting cost pass-through and a favorable mix. Full-year adjusted EBITDA was BRL 1.8 billion, up 5%, supported by pass-through, mix, and contribution from New Energies, offsetting lower LPG volumes and higher costs and expenses. Ultragaz CEO Tabajara Bertelli said the company did not expect major changes to its plan and anticipated 1Q26 EBITDA similar to 1Q25, while noting “Gás para Todos” had been approved and was in early implementation stages.
• Ultracargo: Average installed capacity increased 6% year over year in the quarter to 1,131,000 cubic meters, but cubic meters sold declined (-5% in the quarter, -9% in the year) due mainly to lower customer demand for tanking services related to fuel imports. Adjusted EBITDA was BRL 144 million in 4Q25 (-15%) and BRL 585 million for 2025 (-12%), reflecting lower volumes and higher ramp-up costs at new operations. Management said it expected first-quarter volume and recurring EBITDA to be higher than 4Q25, while noting the import arbitrage window had closed since mid-February.
• Hidrovias: Total volume handled increased 65% in the quarter and 22% for the year, reflecting improved navigation conditions and operational improvements, as well as increased volume in Santos tied to the start and consolidation of a salt operation. Recurring EBITDA was BRL 160 million in 4Q25, reversing a negative result a year earlier, and BRL 1.1 billion for 2025, up 95%. Looking to 1Q26, management said challenges receiving cargo from the North operation and more normal navigability conditions in the South could lead to results below 1Q25.

On investment plans, management reiterated an announced 2026 CapEx plan of up to BRL 2.6 billion, with about 42% targeted to expansion and the remainder to maintenance, efficiency, and safety initiatives. Pizzinatto said Ultrapar entered 2026 amid geopolitical tensions and economic volatility, and emphasized continued focus on operational efficiency, financial discipline, innovation, and sustainable growth.

About Ultrapar Participacoes (NYSE:UGP)

Ultrapar Participações SA is a Brazilian diversified holding company operating in the downstream energy and chemical sectors. Its Ipiranga unit runs one of Brazil’s largest networks of fuel stations, supplying gasoline, ethanol, diesel and convenience-store products to retail and wholesale customers. Through Ultragaz, the company is a leading distributor of liquefied petroleum gas (LPG), offering cylinder and bulk gas solutions for residential, commercial and industrial use across urban and rural regions.

In the specialty chemicals arena, Ultrapar controls Oxiteno, which produces surfactants and specialty chemical formulations for industries such as personal care, oil and gas, agrochemicals and coatings.