By Brazil Stock Guide – Ultrapar Participações (B3: UGPA3; NYSE: UGP) reported net income of R$256 million ($51 million) in the fourth quarter of 2025, a 71% decline year over year, as extraordinary accounting effects and higher financial expenses weighed on the bottom line. Despite the drop in profit, the Brazilian energy and logistics group maintained strong cash generation and announced a R$2.6 billion ($520 million) investment plan for 2026 aimed at expanding and modernizing its core businesses.
The company posted net revenue of R$38 billion in the quarter, up 7% from a year earlier, supported by stronger fuel distribution volumes and the consolidation of Hidrovias do Brasil (B3: HBSA3). Recurring adjusted EBITDA reached R$1.7 billion, a 36% increase year over year, reflecting improved operational performance across the group’s main divisions.
According to management, Ultrapar generated a record R$5.5 billion in operating cash flow in 2025 and ended the year with leverage of 1.7 times net debt to EBITDA, even after paying R$1.1 billion in dividends in December.
The quarterly profit decline was largely driven by extraordinary effects, including asset write-downs related to the sale of Hidrovias’ coastal shipping business and accounting adjustments that distorted the comparison with the previous year. Excluding those items, underlying profit would have increased, supported by stronger operating margins and EBITDA growth.
Fuel distribution drives results
Ipiranga, Ultrapar’s fuel distribution unit and largest business segment, was the main driver of operational improvement in the quarter.
Total fuel volumes increased 7% year over year, with Otto-cycle fuels (gasoline and ethanol) rising 8% and diesel volumes increasing 6%, reflecting a recovery in the Brazilian market following government measures aimed at reducing irregularities in the fuel distribution sector.
The division reported recurring EBITDA of R$1.066 billion, a 26% increase compared with the same quarter of 2024, driven by stronger volumes and improved margins.
Meanwhile, Ultragaz, the group’s liquefied petroleum gas distributor, posted recurring EBITDA of R$474 million, benefiting from inflation-linked price adjustments and expansion in new energy initiatives.
Hidrovias do Brasil, the logistics and river transportation company that Ultrapar consolidated in 2025, also delivered a recovery in performance after navigation conditions normalized and transport volumes increased along key agricultural export corridors.
Investment strategy
Alongside the results, Ultrapar announced a R$2.617 billion investment plan for 2026, slightly above the amount invested in 2025.
About R$1.11 billion will be allocated to expansion projects, while roughly R$1.5 billion will fund maintenance, safety and modernization of existing assets.
Ipiranga will continue to receive the largest share of capital, with about R$1.28 billion in investments, focused on expanding the network of branded fuel stations, strengthening logistics infrastructure and growing convenience and automotive service offerings.
Ultragaz is expected to receive approximately R$600 million, mainly to expand its bulk customer base, invest in new energy solutions and strengthen operational infrastructure.
The group’s liquid storage operator Ultracargo will invest around R$434 million in port terminals and productivity improvements, while Hidrovias do Brasil will receive R$270 million, primarily aimed at expanding logistics capacity in Brazil’s northern grain export corridor.
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