By Brazil Stock Guide – In a confident tone, CEO Ernesto Pousada described Brazil’s crackdown on fuel-tax evasion and new fiscal reforms as a “point of no return” for the downstream sector. The combination of ethanol monophase taxation, joint tax liability rules, and the “Carbono Oculto” enforcement campaign by the ANP has, according to him, created a fairer and more transparent competitive field. Several non-compliant distributors have already been shut down, and, for the first time, “government, industry, and society are aligned,” he said.
“We’ll see quarter-by-quarter progress,” Pousada told analysts, citing additional legislative projects in Congress and state-level tax adjustments, especially in São Paulo, that are deepening market formalization. “There’s no going back—this isn’t a six-month fix, but the direction is clear,” he added.
Financial Discipline and Shareholder Payouts
During the Q&A session, Pousada reiterated that deleveraging remains Vibra Energia’s top priority. The company closed 3Q25 with net leverage of 2.7x EBITDA, down from 2.9x in the previous quarter, and expects to reach 2.5x by year-end. Vibra will maintain its 40% payout ratio through dividends and interest on capital, while assessing the potential impact of proposed dividend-tax legislation before any changes to the program.
CFO Augusto Ribeiro highlighted that the company’s debt reduction was driven by strong cash generation and working-capital optimization, including improved supplier management and inventory control. Net debt fell by R$ 2.3 billion, and Vibra ended the quarter with R$ 6.5 billion in cash. “We’ll keep returning value to shareholders — but with prudence and consistency,” he said.
Expanding Retail Footprint and Flagged Stations
Vibra’s retail network remains central to its growth strategy. The company closed the quarter with 7,922 service stations, a net addition of 117 new sites, and 23.8% market share. Contract terms average five years, and about two-thirds follow a post-paid model, where performance-based bonuses replace upfront payments.
“Our focus is on profitable growth with low risk,” said Pousada, noting that the company is regaining volumes in São Paulo and Rio de Janeiro following the regulatory clean-up. Ribeiro added that 40% of Vibra’s 2025 capex will be allocated to station flagging and branding incentives — double last year’s share — without a material increase in total capex. “It’s about disciplined execution and high-return expansion,” he said.
Record Cash Generation and Efficiency Gains
The executives emphasized that working-capital efficiency was the hidden driver behind the quarter’s record R$ 3.5 billion in operating cash flow — Vibra’s highest in seven years. Ribeiro explained that improvements in supply-chain management, risk-sacado normalization, and inventory turnover led to permanent gains: “There was no silver bullet — just efficiency across the board. These results won’t reverse in the coming quarters,” he said.
Pousada added that further cost-cutting in logistics and SG&A will begin in early 2026, aiming to “expand margins per cubic meter through productivity, not pricing.”
Comerc Energia and the Transition to Power
The company’s energy arm, Comerc Energia, posted EBITDA of R$ 238 million in the quarter, pressured by generation curtailment but supported by a 10% cut in operating expenses. The business remains cautious amid market volatility and low liquidity in long-term power contracts.
Pousada said Comerc is following the Energy Market Reform Bill (PL 1304/2025), which could unlock growth in Brazil’s free-market energy sector once enacted. “When liquidity returns, Comerc will scale again — but responsibly,” he said.
The company also continues to invest in distributed generation and clean-fuel initiatives. Vibra will participate in COP30 and remains the first Brazilian company to import sustainable aviation fuel (SAF), tested in partnership with Embraer — signaling its growing role in the energy transition.
Lubricants: Building a Latin American Leader
Vibra’s Lubrax brand — now under its own business unit led by Marcelo Bragança — delivered a 13% increase in sales volume, with monthly records across the third quarter. The company plans to expand beyond Brazil into Argentina and other Latin American markets, combining organic growth and strategic partnerships.
“Our ambition is clear: to become Latin America’s leading lubricants player,” said Pousada. “We’re driving efficiency, product mix upgrades, and strategic alliances to get there.”
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