Key insights
- Brazilian fuel distributors Vibra and Ultrapar reported strong Q1 results driven by record fuel margins, according to Jefferies. Rising international diesel prices and Petrobras' domestic price increases contributed. Domestic diesel prices are estimated to be 40% below import parity. This could signal inflationary pressures and potential shifts in global energy markets, but the direct impact on US equities is limited.
Investing.com -- Brazilian fuel distributors Vibra and Ultrapar reported strong first quarter 2026 results, with EBITDA rising 30-50% quarter-over-quarter as fuel margins reached record levels amid the Iran conflict, according to a Thursday note from Jefferies.
Vibra posted first quarter recurring adjusted EBITDA of BRL2.4 billion, up 50% from the previous quarter and in line with FactSet consensus. Fuel retail margins climbed 60% quarter-over-quarter to BRL310 per cubic meter in the first quarter from BRL194 per cubic meter in the fourth quarter of 2025. The business-to-business segment also showed solid performance with margins reaching BRL210 per cubic meter compared to BRL180 per cubic meter in the prior quarter.
Total sales volumes increased 4% year-over-year, with retail volumes up 6% year-over-year while business-to-business volumes rose just 1% year-over-year. Free cash flow reached BRL1.7 billion in the quarter, helping push down gearing to 2x net debt to EBITDA from 2.4x at the end of 2025.
Ultrapar reported first quarter recurring adjusted EBITDA of BRL2.3 billion, up 30% quarter-over-quarter and about 15% above FactSet consensus. The performance was driven by its fuels subsidiary Ipiranga, which posted BRL1.7 billion in adjusted EBITDA, up 56% quarter-over-quarter, as margins rose to BRL276 per cubic meter in the first quarter from BRL148 per cubic meter in the fourth quarter of 2025.
In dollar terms year-to-date, international diesel prices have almost doubled while Petrobras (BVMF:PETR4) has increased its wholesale domestic fuel prices by about 25%. Average Brazil diesel prices at the pump are up 34%. Jefferies estimates that domestic diesel prices are about 40% below import parity.