By Brazil Stock Guide – Ultrapar Participações S.A. (B3: UGPA3; NYSE: UGP) closed the third quarter of 2025 with net income of R$772 million, up 11% year on year, supported by solid cash generation and extraordinary tax credits at Ipiranga. The diversified energy and logistics group also posted adjusted EBITDA of R$1.95 billion, a 27% increase over the same period last year, reflecting stronger performance across all operations — especially Hidrovias do Brasil (HBSA3), which delivered record results since its consolidation in May.
Broad-based recovery
Consolidated revenue reached R$37.1 billion, a 5% increase from 3Q24, while recurring adjusted EBITDA rose 18%, to R$1.78 billion, driven by Ultragaz’s higher margins and the first full quarter of Hidrovias under Ultrapar’s control. Cash flow from operations more than doubled to R$2.1 billion, underscoring disciplined working-capital management even after the payment of R$326 million in dividends.
The company’s leverage improved sharply, with net debt-to-EBITDA falling to 1.7x from 1.9x in the previous quarter, reflecting strong cash generation and the sale of Hidrovias’ coastal shipping unit for R$715 million in early November.
Ipiranga’s mixed quarter
At Ipiranga, the group’s largest business, recurring adjusted EBITDA fell 5% to R$892 million due to lower margins and persistent irregularities in the fuel sector, notably the impact of illegal imports and resale of naphtha disguised as gasoline. Despite that, the unit benefited from higher sales volumes, which rose 8% versus the second quarter, as diesel demand picked up and the market began to recover following the government’s “Operação Carbono Oculto” crackdown on fuel fraud.
Extraordinary tax credits of R$185 million boosted Ipiranga’s quarterly performance, offsetting weaker spreads. Lower provisions for doubtful accounts and reduced marketing and payroll expenses also helped contain costs.
Ultragaz and Ultracargo face different dynamics
Ultragaz, the group’s LPG distributor, posted EBITDA of R$463 million, up 3% from a year earlier, supported by inflation pass-through and the growing contribution of its new energy segment, which includes biomethane and distributed generation projects. Total sales volumes declined 6% year on year due to weaker industrial demand, though improved pricing and operational efficiency helped preserve margins.
Ultracargo, the bulk liquid terminal operator, reported EBITDA of R$134 million, down 20% year on year, reflecting a 12% drop in storage volume caused by reduced demand for fuel imports at its Santos, Itaqui, and Suape terminals. Higher depreciation from recently expanded facilities also weighed on results. Still, the company continued expanding capacity — adding 34,000 cubic meters in Santos in October — and investing R$169 million in new projects.
Hidrovias delivers record performance
The standout of the quarter was Hidrovias do Brasil, whose recurring adjusted EBITDA surged 114% year on year, to R$361 million. The result reflects normalized navigation conditions in the Southern Corridor and higher iron ore volumes, pushing net revenue up 46% to R$711 million. The sale of its coastal shipping division further strengthened Hidrovias’ balance sheet and aligned its portfolio with Ultrapar’s strategy to focus on synergistic logistics assets.
Growth and sustainability agenda
Ultrapar also advanced its investment and sustainability fronts. The company acquired 37.5% of Virtu Participações for R$102.5 million, signaling an appetite for high-growth sectors where it can add strategic value. The Ultra Day 2025 investor event, held at the company’s headquarters, emphasized innovation, capital discipline, and ESG integration.
Market reaction
Ultrapar’s shares rose 25% during the quarter, outperforming the Ibovespa’s 5% gain, and closing September at R$21.97, giving the company a market capitalization of R$24.5 billion.
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