By Brazil Stock Guide – Ultrapar Participações SA (B3: UGPA3; NYSE: UGP) reported a 46% increase in second-quarter profit as stronger results at Ipiranga pushed recurring adjusted EBITDA up 149% and helped the company generate record operating cash flow.
Net income reached R$1.68 billion, compared with R$1.15 billion a year earlier. Net revenue increased 22% to R$41.52 billion, while recurring adjusted EBITDA climbed to R$3.66 billion from R$1.47 billion.
Operating cash flow rose to a record R$4.79 billion from R$939 million in 2Q25, reflecting stronger operating performance and the release of working capital at Ipiranga. The figure included an additional R$833 million from supplier-financing transactions. Excluding that effect, operating cash generation totaled R$3.96 billion.
Ipiranga leads earnings growth
Ipiranga was the main driver of the quarter. The fuel distributor’s recurring adjusted EBITDA surged to R$2.78 billion from R$678 million a year earlier, while net revenue increased 24% to R$37.46 billion.
Total sales volume advanced 8% to 6.17 million cubic meters. Diesel volumes rose 10%, while Otto-cycle fuel sales, which include gasoline and ethanol, increased 6%.
Ultrapar attributed the performance to higher volumes, scale gains and improved margins as enforcement against irregular practices supported a more balanced competitive environment. The company also cited effects from the Middle East conflict, which increased the importance of operators with fuel-import and supply-management capabilities.
Higher acquisition costs, especially for imported diesel, were passed through to customers. Ipiranga’s gross margin rose to R$564 per cubic meter from R$218 a year earlier.
Financial expenses temper profit gains
The improvement in operating results was partially offset by higher depreciation, amortization and financial expenses. Ultrapar recorded net financial expenses of R$520 million, compared with R$31 million in 2Q25.
The year-earlier period benefited from a R$344 million monetary adjustment related to extraordinary tax credits. The latest quarter also included a negative R$127 million mark-to-market effect.
Adjusted EBITDA, which includes certain noncash and accounting adjustments, increased 70% to R$3.52 billion. First-half net income rose 71% to R$2.59 billion.
Debt falls to lowest leverage since 2008
Ultrapar ended June with net debt of R$8.86 billion, down from R$12.28 billion at the end of the first quarter. Net leverage declined to 0.9 times adjusted EBITDA, its lowest level since 2008, from 1.5 times three months earlier.
Including supplier-financing and vendor arrangements, adjusted net debt totaled R$10.89 billion, equivalent to leverage of 1.1 times. The company said its cash generation allowed it to repay debt at Ipiranga and Hidrovias do Brasil SA (B3: HBSA3).
Ultrapar approved a buyback program covering as many as 18 million shares. It also announced R$1.09 billion in first-half dividends, equivalent to R$1 per share and a dividend yield of 3.8%.
Other businesses show mixed trends
Ultragaz’s recurring adjusted EBITDA rose 6% to R$468 million even as liquefied petroleum gas sales volumes declined 3%. A more favorable sales mix helped offset weaker demand in both the bottled and bulk segments.
Ultracargo posted a 13% increase in adjusted EBITDA to R$159 million. Average storage capacity expanded 8%, while billed volume climbed 19% as recently installed capacity ramped up. The company expects new capacity at the Suape and Itaqui terminals to begin operating in 3Q26.
Hidrovias reported recurring adjusted EBITDA of R$322 million, down 8% from a year earlier, mainly because of the disposal of its coastal shipping operation. On a continuing-operations basis, recurring adjusted EBITDA fell 1%, reflecting higher operating costs and expenses.
Ultrapar invested R$517 million during the quarter, 5% less than a year earlier. Spending was directed toward Ipiranga’s service-station network and technology platform, Ultragaz’s technology and biomethane operations, Ultracargo’s expansion projects and maintenance of Hidrovias’ navigation assets.
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