Ultrapar Participacoes S.A. (New) American Depositary Shares (Each representing one Common Share)

Good morning. Thank you for waiting. Welcome everyone to UltraPAR's second quarter 24 results conference call.

Good morning, everyone. It is a pleasure to be here.

There is also a simultaneous webcast that may be accessed through UltraPars website at ri.ultra.com.br and through MZIQ platform. The presentation will be conducted by Mr. Rodrigo Pissinato, UltraPars Chief Financial and Investor Relations Officer. And in the Q&A session, we'll also have the presence of Mr. Marco Lutz, UltraPAR CEO, the CEOs of UltraGas in Ipiranga, Mr. Tabajara Bertelli and Mr. Leonardo Linden, and the CFO of UltraCargo, Mr. André Saia. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. After UltraPAR's remarks are completed, there will be a question and answer session. At that time, further instructions will be given. We remind you that questions will be answered during the Q&A session and may be posted in advance in the webcast. A replay of this call will be available for seven days immediately after we finish. Before proceeding, we would like to clarify that forward-looking statements are being made under the State Harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of Ultrapar Management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of UltraPAR and could cause results to differ materially from those expressed in such forward-looking statements. I would like now to turn the conference over to Mr. Rodrigo Pecenato. He's going to begin the conference now. Mr. Pecenato, you can start.

Good morning, everyone. It is a pleasure to be here once more to talk about ultraparse results. And before we begin, I want to draw your attention to the reporting criteria and standards presented on slide number two. And moving on to slide number three, as you can see in the chart in the upper left side, our recurring EBITDA totaled R$1,282,000,000 in the second quarter of 24, 37% higher than that of the second quarter of 23, mainly due to the higher EBITDA VP Ranga year-over-year. As you can also see, the accumulated EBITDA for 2024 is R$2,588,000,000, 32% higher year-over-year. Ultra-partisan net income in the quarter was R$491,000,000, a growth of 106% year-over-year due to the EBITDA growth I just mentioned and lower net financial expenses. I highlight that the share of profit of Hidrovias did not contribute to ultra-partisan net income in the second quarter of 2024, which will occur on the third quarter onwards with a two-month lag. The accumulated net income for 2024 is R$ 947 million, 85% higher than that of 2023. Our Board of Directors, as we have already disclosed, approved the payment of R$ 276 million in interim dividends for the first half of 2024, equivalent to R$ 0.25 per share. Our Investments totaled R$479 million in the second quarter of 2024, 24% above that of the second quarter of 2023, mainly due to higher investments in neutral cargo and lower investments in Ipiranga. I highlight that these investments do not consider the acquisition of the significant equity stake in Indrovias and receipts from divestments. We had an operating cash generation of R$1,298,000,000 in the second quarter of 2024 for R$100,000,000 higher than that of the second quarter of 2023, mainly due to higher EBITDA, lower working capital investment, and higher draft discount in the second quarter of 24. And moving now to slide 4 to talk about our liability management. We ended the second quarter with a net debt of R$7.7 billion, a reduction of R$123 million compared to March 24. The decrease in the net debt is mainly due to the operating cash generation of the period and the receipt of the last installment of the Occitano sale of R$750,000. These cash inflows were partially offset by the acquisition of a stake in IndroVias for R$1,293,000,000, reclassified to the investment line. Our leverage decreased from 1.3 times in March 24 to 1.2 times net debt to EBITDA in June 24 due to higher EBITDA of the last 12 months and lower net debt, as I just mentioned. I point out that the figures of the net debt for the second quarter of 24 still do not include the receipt of the last installment of the extra pharma sale amounting to R$222 million, which occurred in early August. As you can also see in the table at the bottom of the slide, the net debt in June 24 added to draft discount, vendor, and receivables from the extra pharma divestment is R$9,256,000,000, And moving now to the next slide, slide number five, to talk about ultra gas. The volume of LPG sold in the second quarter was 1% lower year over year due to the 2% reduction in the bottled segment, mainly reflecting the continued competitive environment, as well as a milder winter compared to the previous year. Bulk LPG remained stable, also affected by the milder winter. UltraGas SG&A in the second quarter of 2024 was 4% lower than that in the second quarter of 2023 due to initiatives to increase operational efficiency and lower expenses with sales commissions and personnel. UltraGas EBITDA was R$ 414 million in the second quarter of 2024, which includes a non-recurring effect of R$17 million related to the reduction of the earner payable from the acquisition of Stella due to the exit of a partner. The recurring EBITDA totaled R$397 million in the quarter, 2% lower than that of the second quarter of 2023. This decrease is explained by the lower sales volume and a more competitive environment in the bottled segment. And for this third quarter, we expect a seasonally stronger volume compared to the second quarter, with EBITDA at a similar level to that of the third quarter of 23. And moving now to slide 6 to talk about another good result of UltraCargo. The company's average stock capacity of 1,067,000 cubic meters is 12% above that of the second quarter of 23 due to Opla, Villa do Conde, and Rondonópolis terminals. The cubic meter sold grew 19% year-over-year, mainly due to the start of operations of Opla and Rondonópolis and greater fuel handling at Vila do Conde, attenuated by lower spot fuel handling at Santos and Itaqui. Ultracargo's net revenues were R$ 264 million in the second quarter of 24, 2% higher than that of the second quarter of 23 as a result of the higher cubic meters sold despite lower spot sales. Combined costs and expenses were 1% above that of the second quarter of 23 due to higher depreciation costs in line with capacity additions partially offset by lower personnel expenses. Ultracargo's EBITDA totaled R$165 million in the quarter, a 3% growth year-over-year. due to greater capacity occupancy with profitability gains, lower expenses, and productivity and efficiency gains despite lower spot sales, and the R$8 million gains we had from the sale of UltraCargo's stake in Unión Volpac in the second quarter of 2023. EBITDA margin was 63% in the second quarter of 2024, in line to that of the second quarter of 2023. And for the third quarter, we expect UltraCargo to continue its good results with EBITDA levels similar to those seen in recent quarters. And to conclude this presentation, moving now to slide number seven, let's talk about Ipiranga's results. The volume sold by Ipiranga in the second quarter grew 4% over the second quarter of 2023, with a 5% growth in diesel and a 3% growth in the auto cycle, driven by greater share of ethanol over gasoline in the product mix. We ended the second quarter of 24 with a network of 5,876 service stations, five less than in March 24. We added 79 service stations and closed 84 throughout the quarter. And this level of closures reflects stricter contract compliance. I remind you that the number of stations is not the main driver for volume growth as observed in recent quarters. Furthermore, we ended the quarter with 1,506 AM-PM stores, with same-store sales growth of 7%. Ipiranga's SG&A increased by 30% compared to the second quarter of 2023, due to higher personnel expenses, mainly a larger headcount and collective bargaining agreement, depreciation, freight costs due to higher sales volume, and one-off expenses with the office relocation in Rio and São Paulo. The line of other operating results totaled a negative R$109 million in the quarter, an improvement of R$100 million year-over-year as a result of lower expenses with carbon tax credits. The line of results from disposal of assets totaled R$36 million as a consequence of the sale of real estate assets, especially the San Cristóvão Building in Rio de Janeiro. Ipiranga's EBITDA was R$817 million in the quarter. Recurring EBITDA totaled R$781 million, 80% higher year-over-year. The higher EBITDA reflects better margins, mainly due to competition environment normalization and inventory gains in the second quarter of 24, despite higher expenses and irregularities in the market. These irregularities are mainly due to the tax benefit in the state of Amapá, which was revoked in April, and increased NAFTA imports, which enters the country as a raw material for the chemical industry with a lower tax burden, but end up also being used to produce gasoline without full tax collection. We ended the quarter with a recurring unit EBITDA for the last 12 months of R$177 per cubic meter, 137% higher year over year, mainly driven by the results of the second half of 2023. And in this third quarter, we had few price increases in July with consequent inventory gains. We are also seeing a normalization of inventory levels in the sector, which began at the end of the last quarter. Therefore, we expect a profitability similar to that of the year 2023. Very well. I now conclude my presentation. Let's now move on to the Q&A session to answer any questions you may have. Thank you very much for your attention.

We are going to start now the Q&A session for investors and analysts. To ask a question, please raise your hand. The first question comes from Gabrielle Barra of City. Please unmute. Hello, thank you for taking my questions. I'm going to focus on Ibranga and I'll try to understand your opinion on three points. First, analyzing the results, it seems there is an effect on SG&A, a non-recurring effect in the quarter, the change of the office in Rio. It would be interesting. I don't know to what extent you can share with us, but we would like to understand the impact of this non-recurrent effect in the quarter, thinking about a margin and trying to exclude it because it seems to be irrelevant effecting the quarter. It's another pointed out that we've seen the industry focused on that. There are a number of negative effects in the quarter. Throughout time, it has improved, but still something that is hard and has to be done for the margins to get better and for the whole future of your business. The second thing that I'd like to understand from you is to what extent you can quantify the impact, not only the issue in Amapá, but also NAFTA, CBO, which has also been discussed, constant debtors. So I would like to hear the impact about that in the quarter and what we can expect for the next quarter. And thirdly, Pizzanato has somewhat addressed that the second half of the year seems to be much better for the industry today. Do you share the same opinion? I would like to know to what extent really it's going to be better and also the sustainability of the improvement that you expect coming. These are my three points. Thank you. Hi, Clabiel. This is Leonardo Linton. Good morning. Thank you for the questions. Concerning SG&A and the offices, yes, they had an impact this month. We had a plan for a while of changing the office in Rio. High cost of maintenance. Some impacts on infrastructure. We've already had mapped the place to move in Rio, but we still hadn't had the opportunity to have the transaction as we wanted. We had a transaction with an entrepreneur and we carried on with our plan to move our office in Rio. At the same time, we had to have a rebuilding project just really streamlining the office. And the same has been done here in Sao Paulo for our office in Sao Paulo. We don't expect to have any relevant impact in the third quarter concerning that. But yes, expenses that were impacting the second quarter. 7 to 8 BRL per cubic meter of impact in our SG&A. Now, concerning your second point, negative effect of the market, in the second quarter, we've observed the effects and part of them because of the issues from Amapá. It was revoked in the end of April. But that's not the only fact. We are operating in a market that has a number of irregularities. There are distributors which do not meet the goals of CBU, and there are orders against them. There is the issue of tax and non-specification of products, as Rodrigo pointed out. There are a number of market irregularities, and we've been handling them the best as we can. But we've seen in this quarter some important actions taken And even here, I've always been highly critical about it. As a society, we should take a stance. And this quarter, the end of the quarter, it was quite important to see and really making a number of actions towards that in attacking some distortion factors of good competitive environment, ICL, the media. I had the impression that the media has really embraced the topic and has been talking about it extensively. So these are all positive indications, something that really... makes us feel somewhat more, I mean, relaxed. It's far from being solved, of course, but it is something that at least gives us a better outlook. These numbers have been known. They are part of different studies. As a society, there is 30 billion BRL losses from such irregularities, and it's all with the government, right? Therefore, we should really keep on fighting the regular market so that we have healthier competitive markets. Healthier markets would also contribute to better businesses. Now, concerning the second half of the year, inventory levels of the market will probably be more normalized. It seems that we are not going to have the level of oversupply, especially for diesel. The market will be more balanced, I believe, which doesn't mean there is going to be a product shortage, just a well-balanced market. And we have a very positive perspective concerning the next quarter. Great. Thank you very much. The next question comes from Monique Greco, Itaú. Please unmute your mic. Ms. Greco, cannot hear you. Yes, now we can hear you. I have two questions from our side. I'd like to ask Lyndon about it, Ranga, thinking about the second half, which was your last answer. Can you share with us what you expect in terms of market share? We've been observing the data on a monthly basis, and we've seen in recent months some reduction of share in retail and B2B. Could you please share with us what you expect for the second half of the year? Secondly, it's a question to Tabajara about ultra gas. Could you please share with us the integration with SHV, anything to share with us? How long would it take to have the full integration and then start benefiting from synergies? Hi, Monique. Thank you for the question. Lyndon speaking. Concerning market share, the market has somewhat different characteristics from what it used to be. and we can see more volatility in the share than we used to see in the past because the spot market is much more volatile, especially for a company such as Ipranga. What do I anticipate for the third quarter and the second half? I would see a share in our branded network, which will be in a contracted area, will be really stable because we have constant volume. And I think the third quarter will have probably lower volatility because of fewer irregularities. And so we hope in the spot market. But the spot market will always be a business of opportunity for those selling or those buying. If you have the right condition at the right time, we just benefit from it. If not, It's not end of the world. Our priority will always be our own network. We don't see any different perspective in the brand and network, and we always work to capture good businesses that would impact our share in the spot market as well. Thank you for the question. Tabajara speaking. the operational consortium with SHV. We have planned a very important part of the integration, phase one of the integration, quite relevant in the total context of the project. We have met what we had planned with the expected moves and chains. It has all been implemented that it's a very relevant portion of the project. In the quarter, We haven't had any significant capture because it's the process of implementation as planned. For the third and fourth quarter, we are going to have some marginal capture, as we've explained in the past, and then go into the next steps. It will take a couple of months. complementing full implementation of the consortium in 2025. Very much aligned with our strategic plan of improving operating efficiency. There was the challenge of implementation, but fortunately, we've covered this step and it's all fully implemented. We are totally moving ahead very satisfactorily. Great. Thank you very much. The next question comes from Luis Carvalho, UBS. Please unmute yourself. Hello. Thank you for taking my questions. Great results. Kudos to you. I have two questions, and then I'll go back to a point that I always emphasize, capital allocations. You have a leverage, which is very comfortable, close to one time, even after acquisition of hydrovias. What can we expect in terms of priorities and capital allocation? Anything of acquisition ahead, expansion of your CapEx plan, any perspective of sharing extraordinary dividend, speeding up IBAC, et cetera. Despite the fact that your three businesses are equally important to the company, part of Ultrapar's thesis is is based on capital allocation strategy, and you've made very important action involving hydrovias. Can you please tell us more about this investment? Because I would like to know about your first impressions. What are the opportunities you had? Now you have nearly 40% of the company ownership. What can we expect in terms of Ultrapar's action in Hydrovia as its main shareholder? Hi, Luis. Thank you for the question. I'm going to repeat what we have been saying. Capital allocation is a result of discipline. This is what we do. This is something that we always will have as our mantra. In terms of Hydrovia, Hydrovia is a publicly traded company which will have its own conference call for earnings release and I cannot anticipate any privileged information before the company shares its own results. But we see the business as an opportunity. We hold 40% shares. We can see a number of interesting opportunities. And we really think that as shareholders, we will bring some long-term logics, which will be very beneficial to the company, We wouldn't be able to say anything more than that because it's a publicly traded company. And of course, well, Rodrigo and myself, Marcus, we are board members. And of course, we cannot share any other information. Building up on that, we are going to have on September 6th, our Ultra Day, Investors Day, and HitReview is going to be there. That's going to help us align the expectations for the year. Great. Thank you very much. I appreciate. The next question comes from Rodolfo Angeli, JP Morgan. You can unmute yourself. Good morning. Thank you for taking my question. And I have two quick questions. Concerning Ibranga, it's clear that we are talking about a second half year, which has the expectation of being quite good to the company. In terms of management agenda, it seems that you are running smoothly. You've closed some service stations. So what are the next steps from a strategic perspective? What would we expect? What is in the management's agenda for the future? I would also like to hear you about UltraGas. There was a minor decrease concerning margins, EBITDA per ton, What is your outlook? How are you anticipating the business environment for UltraGas in the next half year and also looking ahead into next year? Thank you. Hi, Rodolfo. Thank you for the question. In terms of agenda, we don't have anything different from what I've been constantly repeating to you as our priorities. We always focus on the capacity to generate products, to operate competitively, to understand the best positions within the scope of what we do in trade and supply. There is an important topic of logistics, which is one of the most important priorities of the company because of the potential of value to unlock in this business, which is going to impact SG&A. There is the topic of competitiveness. It's something that we should never lose track of. It is a management which is very close to what's going on in the market. And we also have our agenda of engagement, the brand, in-house, outdoors, and we've been doing that for a while. For upcoming months, we will focus on improving logistics, some transformational changes to Ipranga. We're going to keep on doing it. And also, RIT changes. It's a longer project which requires our attention. Another major opportunity to generate value. I guess that's it in a nutshell. Something that we've been doing and working quite well. Rodolfo, building up on your question about ultra-gas, we're still focusing on operational excellence. We've just told you about the operational consortium, improving operational efficiency. It's a quarter that we have really evolved in our agenda with resellers, qualification of the resellers, sizing the volume of network we want. We've been really developing our long-term agenda. It's our main purpose. In the specific quarter, there were two effects which were highlighted. One, which resulted from the competitive market in some specific segments, still had a lower effect. And also the fact of the weather conditions, especially in the second quarter, which has really impacted the results of the quarter. But very similar to what had happened last year. That's it. The next question comes from Pedro Soares, BTG. Please unmute your mic. Good morning. I have two questions. Follow-up questions, actually. One for Ipranga. I think Lyndon and Pezenato emphasized the topic about inventory levels. But, Lyndon, could you tell us more about... The inventory in the last call in May, we were all aware of the difficulties resulting from the volumes from Amapá, which end up creating this oversupply. And he thinks that now in the end of the second quarter, the inventory levels were still not at the levels that you had anticipated as being the most appropriate ones for a good balance. Has there anything else that would be worth mentioning? Something that has impacted your natural competitive dynamics, excluding, of course, artificial effects. If you could please tell us more about that, we'd appreciate. A second follow-up about ultra-gas. Now, thinking about ROICs, ROIC levels are still very high and above historical levels. And it's clear that the strategy that you've adopted in recent years are going to be translated into marginal CAPEX, which would tend to be lower. as you are at much higher levels than what we would expect for cost of capital integration, do you still think the ROIC will increase or do you think that you are at a level that would make you get break-even to some extent? Thank you. Thank you for the question, Pedro. Concerning inventory levels in the second quarter and the dynamic we've observed, Second quarter was very volatile in terms of arbitration. Closed, open, open again. It has maintained the import flow coming into Brazil. If you stop and analyze the second quarter, we had the second highest level of imports for the past two years. It has maintained the market with full supply. plus what had happened in the first quarter of high inventory levels to use the benefits of changing cost. So it's a quarter which was fully supplied. From now on, we expect to have better balance with a reduction of two to four days or two to three day inventory in the market. It's nothing that's going to cause any shortage, but it's going to bring some normality to the market. And this is positive for the dynamics. Concerning your question to UltraGas, build up on what I've said in the previous question. We have an agenda of operational excellence, of delivering greater value to clients, increasing capillarity, with proportionally low associated cost, something that we've been noticing throughout the years. We have a structuring agenda in the long term, Some recent projects are part of this planning. But this is a long-term view with some marginal changes from now on, all focusing on expanding the offers to our clients with added value and bringing more synergies that we've developed. This is what we've designed. Of course, there is a challenge of keep on progressing but this is what we anticipate. Great. Thank you, Lyndon and Tabajara. The next question comes from Bruno Montanari, Morgan Stanley. Please unmute your mic. Good morning. Thank you for taking my questions. I have some follow-ups. First, at Ultragas, You've mentioned a more competitive market. How is the competition happening? Is it price? Is it volume, payment terms? Secondly, at HydroVias, I understand you cannot talk much about strategy because it's a publicly listed company, but in terms of Ultra, In your business, where can you see potential synergies or complementarities with the existing portfolio? And finally, in Ipranga, we would like to hear about you once again, because it seems that the CBOs, it seems that nobody is complying with them. There are a number of court orders, injunctions, the review number of CBOs to be purchased, etc. What is the company's take on the current mechanism and the sustainability in the short term? And what would be a solution balancing the market in a fair way? Now, Bruno, I'll start answering about ultra gas. These are short-term movements. that seem to respond better to conditions. And we can see that. No big news for all of us who have been in the market for a while. And they tend to be short-lived, right? Because they are not sustainable. And in the meantime, we reinforce what we believe to be our strategy, which is to have really a special strategy interaction with our clients to deal with all of that, always maintaining our long term strategic agenda. And we always anticipate a better perspective in the future. Now concerning Hidrovias, Marcus speaking, the main synergy is a synergy of knowledge. we really think that HydroVias and the existing knowledge they have, plus the logistics of Hipparanga, the knowledge we have in the terminal operations of UltraCargo together, we can create a very efficient or more efficient system in the mid and long term to have logistics of agribusiness in the north of Brazil. But it's still very preliminary, of course. I understand you have to prepare your reports all the time. and talk to your clients, but we were just part of one board meetings. We've been with them for very little time. So strategies, long-term definition, it takes more time than one or two months. In the next quarter, we will try to go more into concrete actions, something that would be announced by and they are going to have their own communication as any publicly leased company. We are fully aligned with that. We think it was the right step to be taken. And thanks to the knowledge we have of our three business in combination, we can really have very good knowledge and information to develop a unique plan for the market. But the current core of Hydrovia is to move grains, which is a market that we want to be more exposed to. Throughout time, we believe there is going to be an increase in demand and there will be the need of existing and additional infrastructure to meet the needs. Bruno, I always like to emphasize that Ibranga supports the program of carbon credits, the carbon credits market, CBUs, but If there are 150 distributors in the country out of which 60 do not meet, some of them have never met their requirements, so it seems that the program needs adjustments in its own foundation. It's not normal, right? 60 out of 150 have never met their requirements. But we want the market and the program to succeed. And this is why we constantly struggle for the program to be revisited so that we can strike balance. I'm not speaking about court orders. I'm talking about distributors who do not meet their goals. We know it's hard for regulators to be efficient in punishing these distributors. You said that normal is not compliant. We disagree. Everyone should comply with it. Everyone should follow requirements. Failing to comply, it's an abnormality that should be corrected. This is our position, not only of Ipranga. This is something that all companies that meet the requirements of the program and advocate it really don't agree with that way that things are doing. We want things to operate smoothly. In our opinion, unless it gets adjusted, the program will be extinct. This is a concern of ours in the short term in terms of competitiveness. But in the long term, unless things change, the program will come to an end. There will be a problem in which large distributors will stop doing it because we need a rule that will be followed by everyone. If there is a rule in which you fail to comply and you have no punishment, well, it's doomed to end, right? Yes, Ipranga. And as Ultra is speaking, as the CEO of Ultra, we really believe that, yes, there is a concern in the short term, but we expect things to get better in the mid and long term. We hope the program can be adjusted so that it can keep on having more people complying with the rules and having better fuel in the country. Thank you very much. The next question comes from Leonardo Marcondes, Bank of America. Leonardo, please. Good morning. Thanks for taking my question. It's one question and two quick follow-ups. The first question is about ultracargo. Results were somewhat affected by lower volumes in the spot market. Could you please tell us a bit more about the dynamics and what we can expect for the company in the second half of the year? My first follow-up is about an answer that Lyndon gave to Bara. You said that the work of NP, the Gas agency has been important in fighting against irregularities. Do you see really the staff working and engaged to impact your businesses at Imprunga and other business lines? Capital allocation. Marcus has just said that the area of grains is something that you would like to be more exposed to. Do you think there would make sense to have ultra acting in other areas in addition to logistics? That's it. Thank you. Thank you for the question. This is Andres Zaya. Import, as Lyndon pointed out, the second quarter arbitration varied a lot. There was great variability, and it generates an impact in the whole chain. At the same time, the demand for imports in Brazil is structural. It was a difficult quarter, and the turnover of terminals was impacted, but it was a one-off effect. As we expect a gradual normalization of inventory levels for the second half, we expect to keep on having spot opportunities as we've had in previous quarters. Now concerning the National Agency of Petroleum and Gas, you were probably referring to some investigations that are ongoing and we've been reading in the media. I cannot say anything about that actually. But let me use your question to reinforce our support to the National Agency of Gas and Petroleum, ANP, dealing with cases internally or externally. What the agency has been doing throughout the years is really important for our industry. and we really compliment them on the work and we hope the regulator can keep on working to maintain the balance of the area, because this is not good to Ipiranga, this is good to the country and to the industry at large. Marcus is speaking. In terms of capital allocation, we are always going to be rational. There is nothing in our pipeline involving grains in the pure sense of it. But we haven't mapped any opportunity either. It would be totally fine to analyze things like that, but always with discipline. Always expecting to have a return rate on projects which are far from what we do today, right? Which would require additional efforts. Great. Lyndon, if I may, I was really alluding to a potential strike of the staff of the national agency and whether you think it would impact Ipranga, not only about the control over the quality of fuel. Not really. Not really. I don't anticipate anything along those lines, Lyndon answers. Great, thank you very much. The next question comes from Regis Cardoso, XP. Please unmute your mic. Hello, good morning. I have a specific question about results we've seen in the cash flow. part of tax credits. There was a buildup of credit tax. Could you please tell us about the origin? Is it a credit of ICMS, PIS, COFINS? How well can you monetize that, et cetera? Another question to Lyndon. I would like to understand your take on anticipated branding of the service stations or not, and what the market has preferred in terms of model. I don't know what is, whether the differences among different players. And finally, concerning imports and inventory levels, In the recent years, since last week, there had been a significant decrease in the price of Petrobras. So they seem to be more aligned and it would open opportunities, especially for those who are importing it from Russia, especially diesel. So let me hear your initial impression about that. If oil gas really maintain the levels that it has shown so far, do you think that it's going to impact the market or not? Rodrigo speaking, I'm going to talk about cash flow. In the quarter, there were fewer credits because oil, of the reserve we had of the carbon credits. So there were fewer credits in this quarter, not very different, anything but that. The credit that we have, we have expectations to monetize them within five years. All credits that we have launched in our balance expect to be monetized within the next five years. Russia is concerning anticipated or post-anticipated business differ. And there are different conditions. Sometimes there are different lines of granting that make sense. I like the model of not anticipating it, doing it post. Because it gives better alignment between distributor and reseller, adjusting objectives, creating a commitment with results in the bottom line. but we have both options and we decide on a case-to-case basis. As to the supply demand, this is the dynamic we've been having since the import business got more relevant to us. International prices vary, windows open and close. We have to be prepared to really benefit from opportunities. The second half of the year will be where we are going to a period of normalized inventory levels, and I don't expect drastic changes, really. Great. Thank you all very much. The next question comes from Gustavo Sarica, Bradesco. Please unmute your mic. Thank you for taking my questions. Two quick questions. First, a follow-up. When you said, when you started saying that the margin for the third quarter would probably resume levels as last year's. Do we expect it to be 150, 160, which was the recurring level of 2023? Second question about ultra gas. Would you please tell us more about margins in the second quarter. We've heard other players in the industry that they had some difficulties to pass through ICMS, the taxes, and it was equalized in the second quarter. And is it possible now to just pass through, to really increase some of the price because of the high prices of the molecule? I'll be brief so that Tabashara can answer. First question, yes. Good. Yes. That was quick. Concerning the trajectory of margins and prices and what you've talked about ICMS tax in February. And this was one of the factors in the market at that time. In our case, it's different. We can normally just adjust prices accordingly. I think the market has had time to absorb and get adapted to the levels that we currently have. This has been well adjusted, and this is why we have better perspectives for the second half of the year. Great. Quick follow-up about the comments of SG&A. I don't know whether the 7.8 reals per cubic meter was the negative impact of the quarter or whether we would really have that improvement with the change in office. No, it was a negative impact. This was a provision that we made for expenses in future years. It was one-off effect, non-recurring effect just in the second quarter. Thank you. If there are no further questions, I would like now to hand it over to Rodrigo Pizzinato for his closing remarks. Mr. Pizzinato, please. Thank you all very much for your questions, for your interest. Questions who were sent through the webcast will be answered by our investor relations team. And on September 6th, we're going to have Ultra Day. Hope to see you all there. Thank you all very much. Have a great day. The conference call of earnings release of UltraPAR is completed now, closed. Thank you very much. Have a nice day. Thank you.