Ultra(US:UGP)2021-05-09 21:11Financial Data and Key Metrics Changes - The company's EBITDA reached R$996 million in Q1 2021, representing a 13% increase compared to Q1 2020. Excluding non-recurring tax credits from the previous year, recurring EBITDA grew by 23% [14][15] - Net income was 19% lower than in Q1 2020, primarily due to non-recurring tax credits and negative mark-to-market effects from foreign exchange hedging instruments [15][16] - The company maintained a net debt of R$11.9 billion, with leverage increasing from 3x to 3.3x net debt-to-EBITDA [19][20] Business Line Data and Key Metrics Changes - Ultragaz: EBITDA was R$150 million, a 2% growth year-over-year, despite a 4% decrease in sales volume [22][23] - Ultracargo: Achieved record EBITDA of R$93 million, a 2% increase from Q1 2020, with net revenues totaling R$172 million, up 5% [25][26] - Oxiteno: Recorded EBITDA of R$227 million, an 87% increase over the recurring EBITDA in Q1 2020, driven by an improved sales mix [31] - Ipiranga: EBITDA totaled R$563 million, a 17% increase from Q1 2020, despite a 2% decrease in sales volume [35] - Extrafarma: EBITDA grew by 30% to R$12 million, despite a 1% decline in gross revenues [40] Market Data and Key Metrics Changes - Ultragaz experienced a decrease in sales volume, particularly in the bottled segment, due to increased demand during the pandemic in the previous year [21] - Oxiteno's U.S. operations were impacted by severe weather, but overall sales volume remained flat year-over-year [28] - Ipiranga's sales volume decreased by 2%, with a notable drop in auto cycle volume due to pandemic restrictions [32] Company Strategy and Development Direction - The company aims to rationalize its portfolio and expects to achieve a leverage range of 2 to 2.5 times EBITDA by the end of the year [10] - Ongoing negotiations with Petrobras for the acquisition of Refap are progressing without interruption, with expectations to sign the purchase agreement soon [11] - The company is focusing on its ESG agenda, with plans to define and disclose ESG goals for 2030 by the end of the year [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational performance despite the pandemic's challenges, highlighting the resilience of the portfolio [4][5] - The company anticipates a gradual decline in leverage throughout the year and expects to continue reaping benefits from investments made in previous years [10][14] - Management acknowledged the impact of external factors, such as exchange rates and commodity prices, on financial results but remains confident in the long-term strategy [16][19] Other Important Information - The company has implemented a restructuring of Ipiranga's commercial area, appointing a new Commercial Vice President to enhance operations [7] - The impact of a cyberattack on Extrafarma's operations was noted, with an estimated revenue loss of R$25 million, but recovery is expected through insurance [39][41] Q&A Session Summary Question: Fuel export expectations and refinery acquisition - Management noted a narrow window for gasoline exports in Q1 and stable conditions for diesel, with ongoing monitoring of internal prices compared to imports [46] Question: Oxiteno's performance and Texas plant operations - Management indicated a positive outlook for Oxiteno despite the Texas plant's temporary closure due to weather, with overall performance remaining strong [47] Question: Investment expectations in the petrochemical sector - Management emphasized the importance of capital allocation and the potential for future investments, but no specific decisions were disclosed [51] Question: Ipiranga's volume recovery and inventory effects - Management clarified that a cyberattack had minimal impact on Ipiranga's operations, and inventory management strategies were effectively implemented [53][55] Question: Oxiteno's margin progress and strategic refinery acquisition - Management confirmed ongoing negotiations for the refinery acquisition, with no interruptions due to leadership changes at Petrobras [61][62] Question: Expansion plans for convenience stores - Management outlined plans for expanding AmPm stores, with a focus on improving profitability and operational efficiency [86][88]