At the outset of 2017, economic activity in Brazil began a slow recovery after two years of deep recession and, with the resumption in growth, average incomes improved and unemployment levels stabilized.

The indications of incipient recovery in the economy were enough to permit a continued reduction in the basic rate of interest, this ending 2017 at 7.00%, almost half the rate of 13.75% for 2016. The average rate of the US Dollar reported a devaluation of 9% against the Real and closing the year at R$ 3.19.

In the automotive sector, the number of new light vehicle registrations recorded growth after four years of decline to total 2.2 million, an increase of 9% in relation to 2016. The decision of member countries of the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil output up to November 2018 influenced international prices which began 2017 at US$ 57/barrel (Brent) and closed the year at US$ 67/barrel, an 18% increase.

Brazilian Chemical Industry Association (Abiquim) data for the petrochemicals market indicated an increase of 6% in Apparent Domestic Consumption for 2017.

In pharmaceutical retailing, Brazilian Association of Pharmacies and Drugstores (Abrafarma) members data registered increased sales revenue of 9% for the year.

Sales volume at Ipiranga remained practically stable in 2017 despite the increase in fuel prices. Fuel sales volume for the light vehicle segment (Otto cycle) increased 1%, influenced by the larger fleet. Diesel volumes resumed growth in the second half of the year with the recovery in the economy, albeit ending the year with an accumulated reduction of 2%.

Oxiteno posted record sales in 2017 with growth of 7%. This reflected an expansion of 16% and 5% in sales volume of commodities and specialty chemicals, respectively due to pre-marketing sales in the United States ahead of the startup of the new Pasadena plant as well as improved domestic market business.

Sales volume at Ultragaz recorded a decline of 1% in 2017. Despite stability in the bottled gas segment, a reflection of additional new resellers, the bulk segment fell 3% due to the migration of some clients to natural gas.

Greater fuel handling activity ensured an 8% increase in total average storage at Ultracargo.

Extrafarma accelerated its rate of expansion, opening a further 100 stores in 2017, the network now totaling 394 units in 12 states, a year-over-year increase of 25%.

In one more year of consistent results, Ultra reported growth in revenues across all the businesses in 2017, the Company’s consolidated revenue increasing by 3% to R$ 80 billion.

EBITDA reached R$ 4 billion, a 4% decrease relative to 2016. The result was impacted largely by the Cease and Desist agreement with the Brazilian Anti-Trust Authority - Cade in November 2017. Amounting to R$ 93 million to be settled in eight monthly installments, the agreement relates to an action begun in 2009 with respect to an alleged cartel and having an impact on EBITDA of R$ 84 million. If this and other extraordinary effects are ignored, then EBITDA would have been stable when compared with 2016.

Debt

Ultra ended fiscal year 2017 with a gross debt of R$13.6 billion and a gross cash position of R$ 6.4 billion, translating into net debt of R$ 7.2 billion in the period. This corresponds to 1.78 times EBITDA, thus assuring the Company’s financial soundness and commitment to long-term growth.

In 2017, Ultra’s shares (UGPA3) traded on B3 closed the fiscal year priced at R$ 75.00, an appreciation of 10%.

The Company declared dividends of R$ 951 million, an increase of 5% in relation to 2016, representing a dividend yield of 2.4% on the average share price for the shares in 2017.