Ultrapar Holdings Inc. (NYSE: UGP), a prominent player in the Oil, Gas & Consumable Fuels industry with annual revenues exceeding $24 billion, announced today a partnership through its subsidiary Companhia Ultragaz S.A. with Supergasbrás Energia Ltda.
According to InvestingPro analysis, the company maintains strong financial health with liquid assets exceeding short-term obligations. This collaboration involves the creation of a special purpose entity (SPE) for the construction and operation of a new liquefied petroleum gas (LPG) port terminal at the Port of Pecém, in the state of Ceará, Brazil.
The initiative, which is subject to approval by Brazil's Administrative Council for Economic Defense (CADE) and other typical conditions for such transactions, aims to enhance the LPG supply security in the country's North and Northeast regions. These areas have historically faced challenges in national LPG production.
The planned facility is expected to have a storage capacity of approximately 62 thousand tons and is projected to be operational by 2028. The estimated investment for the project is R$ 1.2 billion, to be evenly split between Ultragaz and Supergasbrás Energia Ltda. With an Altman Z-Score of 6.46 indicating strong financial stability, the company appears well-positioned to support this investment. Discover more detailed financial metrics and 12 additional exclusive insights with InvestingPro.
Rodrigo de Almeida Pizzinatto, Chief Financial and Investor Relations Officer of Ultrapar, stated that this project reflects Ultragaz's ongoing commitment to pursuing efficiencies and Ultrapar's strategy of forming strategic partnerships to enhance its business portfolio.
The announcement is based on a press release statement and aligns with Ultrapar's compliance with CVM Resolution 44/21. Investors are watching the developments closely, as the success of the project could mean a significant improvement in the LPG infrastructure and supply chain in Brazil.
With a 21-year track record of consistent dividend payments and current undervalued status according to InvestingPro Fair Value analysis, Ultrapar presents an interesting opportunity for value-focused investors.
In other recent news, Brazilian conglomerate Ultrapar Participações S.A. disclosed a mixed financial performance for its Q3 2024. Recurring EBITDA for the quarter was BRL 1.506 billion, marking a 24% decrease year-over-year, and net income for the quarter fell by 22% to BRL 698 million. However, the company's year-to-date net income saw a 17% rise to BRL 1.645 billion. Sales volumes in segments such as Ipiranga and Ultragaz increased, despite a decrease in EBITDA.
These recent developments also included a 1% increase in Ultracargo's net revenues, contrasted with a 3% decrease in EBITDA. The company anticipates improved margins and stable market conditions moving forward, with CapEx for 2024 projected to be lower than initially planned due to savings and project carryovers. Ultrapar is also focusing on enhancing regulatory measures to ensure fair competition and address illegal practices.
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