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Adjusted EBITDA: BRL4.5 billion, a 206% growth year-on-year.
Volume Growth: 4% increase year-on-year.
Recurrent Adjusted EBITDA Margin: BRL456 per cubic meter.
Operating Cash Flow: BRL3.8 billion.
Net Debt Reduction: Reduced by BRL2.6 billion, reaching a leverage of 1.3 times.
Expenses per Cubic Meter: Dropped from BRL98 to BRL48 in the quarter, and from BRL102 to BRL88 in the last quarter.
New Branded Stations: Record 230 new stations in the quarter, 385 in the first half of the year.
Average Monthly Volume per Station: Increased 12% year-on-year.
B2B Diesel Volume: Increased 7%.
New B2B Contracts: 100 take-or-pay contracts signed.
Market Share Growth: Retail network up 0.7 percentage points and B2B up 0.8 percentage points year-on-year.
Comerc EBITDA: BRL228 million.
CapEx: BRL348 million in the quarter.
Return on Invested Capital: 27%.
Capital Used: Went from BRL24 billion to BRL24.6 billion year-on-year.
Net Debt: Went from BRL21 billion to BRL16 billion in the second quarter.
Shareholder Returns: BRL558 million in interest on equity for the first half, BRL952 million total, with an additional BRL499 million declared in August, totaling BRL1.5 billion with a 4% yield.
Total Shareholder Return: 63% in the last 12 months.
Payout: 24% of profit for the first half, BRL952 million.
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For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Record adjusted EBITDA of BRL4.5 billion, up 206% year-on-year, driven by higher volumes and margins.
Market share growth across all segments, with retail network up 0.7 percentage points and B2B up 0.8 percentage points year-on-year.
Strong cash generation with operating cash flow of BRL3.8 billion, enabling net debt reduction of BRL2.6 billion and leverage down to 1.3 times.
Record expansion of branded stations with 230 new stations in Q2 and 385 in H1, reinforcing the value proposition and long-term growth.
Commitment to shareholder returns with BRL1.5 billion in dividends and interest on equity declared in H1, representing a 4% yield.
Successful liability management, extending debt maturities to 2033-2034 at lower costs (CDI plus 22 basis points) and eliminating short-term maturities.
Expense discipline, with expenses per cubic meter dropping from BRL98 to BRL48 in the quarter, expected to be sustainable.
Growth in B2B contracts with 100 new take-or-pay contracts, enhancing volume stability and margins.
Regulatory progress in combating market irregularities, including the ethanol tax reform expected to conclude by 2027, which should further improve margins.
Expansion into Argentina and growth in lubricants, with a focus on value-added products and potential for further expansion in Latin America.
Margins in diesel and ethanol have declined quarter-on-quarter due to volatility from the Middle East conflict and imported diesel price fluctuations.
The company has not utilized government subsidies for fuel imports due to operational risks, potentially missing out on financial benefits.
Working capital increased by BRL500 million due to a new aviation customer, impacting cash flow and capital allocation.
The ongoing Middle East conflict creates market volatility and pressure on domestic fuel supply, affecting operational stability.
The future of the Petrobras brand contract is uncertain, with negotiations expected only in 2027-2028, and a potential rebranding process starting in 2029 could be costly.
The company is still in the process of cleaning out underperforming stations, which may continue to impact network efficiency and margins.
High interest rates in Brazil limit capital allocation flexibility, despite deleveraging efforts.
The regulatory agenda for combating irregularities is still in progress, with key measures like ethanol tax reform not expected until 2027, delaying full margin benefits.
Lubricants business had a volatile year, with results not yet reflecting the repositioning strategy, and no M&A plans currently in place.
The company faces ongoing challenges from market irregularities, including adulterated products and tax evasion, which require continuous regulatory enforcement.
Q: What is the company's strategy for capital allocation and leverage, given its strong cash generation and reduced debt? A: CEO Ernesto Pousada stated that with leverage at 1.3 times, the company's focus remains on reducing net debt to gain flexibility. If high-return projects emerge, they will be considered; otherwise, the company will increase shareholder payouts. CFO Mauricio Teixeira added that this flexibility allows them to assess M&A opportunities or return more capital to shareholders, prioritizing debt reduction in the second half of the year.
Q: Can you elaborate on the drivers behind the strong B2B portfolio growth and the strategy for cleaning out underperforming retail stations? A: CEO Ernesto Pousada explained that new B2B contracts are typically two-year take-or-pay agreements with minimum volumes, aimed at securing more stable sales and margins. Regarding the retail network, the company uses a dynamic funnel to identify and eliminate underperforming stations monthly, making room for more profitable ones, though there are no fixed targets.
Q: What is the company's view on the use of fuel import subsidies, and what is the status of the Petrobras brand contract? A: CEO Ernesto Pousada confirmed that Vibra continues to import diesel to meet customer demand but has decided not to use government subsidies due to operational risks. Regarding the Petrobras brand, the contract extends to 2029 with a six-year rebranding period until 2035. The company's priority is to renegotiate with Petrobras, with a "Plan B" in place if needed.
Q: What is the expected timeline for the regulatory agenda to combat market irregularities, and what are the main pain points? A: CEO Ernesto Pousada highlighted the "monofasia" of state taxes for ethanol, expected to be concluded in the first half of 2027, and the biodiesel mix agenda. He noted that while the fight against irregularities is advancing, there are still issues like product adulteration. The company believes it has not yet fully captured the benefits of these regulatory changes in its results.
Q: What is the company's outlook for structural margins, and what role did lubricants play in the strong B2B margins? A: CEO Ernesto Pousada stated that before the Middle East conflict, the company operated with recurring margins above BRL200 per cubic meter, and he is confident this level will continue structurally due to network growth and B2B contracts. He also noted that lubricants had a relevant EBITDA evolution, driven by a repositioning towards value-added synthetic products and expansion into Argentina.
Q: What caused the quarter-on-quarter retraction in diesel margins, and are the gas margins structural? A: CEO Ernesto Pousada explained that gas and ethanol margins are more structural, benefiting from the combat against irregularities. Diesel margins are subject to volatility due to the high share of imported diesel and international price fluctuations. He expects third-quarter margins to remain above structural levels, though not as high as in the second quarter.
Q: Can you explain the increase in working capital and inventory levels in the second quarter? A: CFO Mauricio Teixeira attributed the increase to the higher cost of the molecule, which raised inventory values and accounts payable. He noted that while trading terms have lengthened slightly, they remain stable on a working-day basis. The increase is primarily due to the higher cost of fuel, not operational changes.
Q: What is the company's strategy for expanding its branded station network, and how is it managing CapEx? A: CEO Ernesto Pousada stated that the company is focusing on attracting white-label stations to the Petrobras brand, driven by the combat against irregularities. The strategy involves paying pro forma or upfront for branding, which controls disbursement. The pipeline is full, and the company is prioritizing quality operators while cleaning out smaller, less profitable stations.
Q: What measures have been implemented to reduce expenses, and will the lower expense level be recurring? A: CFO Mauricio Teixeira explained that expense reduction is a routine process with monthly governance meetings and weekly forecasts. The lower level was partly due to one-off rescission costs, but the company expects the reduced expense pattern to be sustainable. CEO Ernesto Pousada added that the reorganization efforts have delivered results and the new level should be recurring.
Q: What is the company's growth strategy for the lubricants business, and are there any M&A plans? A: CEO Ernesto Pousada stated that the company has a strong organic growth agenda, focusing on repositioning and expanding into Argentina and other Latin American markets. While there are no current M&A discussions, the company remains attentive to opportunities that make sense, and will pursue inorganic growth if the right opportunity arises.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.