Good morning ladies and gentlemen. At this time we would like to welcome everyone to Ultrapar’s First Quarter 2018 Results Conference Call. There is also a simultaneous webcast that may be accessed through Ultrapar’s website at ri.ultra.com.br, and MZiQ platform. Please feel free to flip through the slides during the conference call. Today with us we have Mr. André Pires, Chief Financial and Investor Relations Officer, together with other executives of Ultrapar. We would like to inform you that this event is being recorded and all participants will be in a 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. [Operator Instructions] We remind you that questions, which will be answered during the Q&A session, may be posted in advance in the webcast. A replay of this call will be available for one week. Before proceeding, let me mention that forward-looking statements are being made under the Safe 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. Now, I’ll turn the conference over to Mr. Pires. Mr. Pires, you may now begin the conference. André Pires: Thank you very much. Hello everyone. As always, it’s a pleasure to be here with you to discuss Ultrapar’s first quarter 2018 results as well as to…

Thank you. The floor is now open for questions. [Operator Instructions] And our first question will come from Frank McGann of Bank of America Merrill Lynch.

Good day. Thank you. I was just wondering if you could bring your focus on two things: one, just in terms of Ipiranga, I mean, the results came in relatively weak and you indicated that you expect some improvement as you go forward over the next several quarters, although perhaps a little bit lower than you might have expected before. I was wondering if you could maybe provide a little bit more information on exactly what you’re seeing. Specifically, as it relates to both the competitive environment, how you’re seeing key competitors respond, whether you are finding it more complicated to fit for a new franchising the agreements or those agreements would be coming a little bit economically less favorable for the company? And then, secondly just in terms of the investment program. You indicated you are going to – you’re slowing at. How – what areas that we likely to most see that in? And Ipiranga, you – in the quarter, you did not open many, many stations. So I was just wondering if perhaps that’s one area where you’re looking to see lower investments in 2018? André Pires: Frank, thanks for the questions. With the first question talking about the expectations in terms of improvement for the next quarters, I think your comment is right. Obviously we’ve – at least through the end of last year, we were not anticipating first quarter starting slower than – the first quarter started much slower than we expected effectively, and this obviously effects the overall results for the year. However, this is both for volumes and also on the competitive environment as well. I mean, basically, what we saw in the first quarter was, let’s say, excess supply in terms of import of fuel, which came at levels of a –…

Okay, I was just – would you, by any chance, have an estimate of how many stations you might be targeting this year now to add next to Ipiranga? André Pires: No, not at this point. We don’t have a specific estimate in terms of number of gas stations. But again, in terms of CapEx, should not be very different than what we gave in 2017.

Okay, thank you very much.

The next question comes from Luiz Carvalho of UBS.

Thanks for taking the question. Just a – two questions from my side. Imports are not dropping as expected immediately since December and despite we saw some decrease when it compared to December levels as we had lots of, I would say, long-term ticks – contracts and also due to Petrobras renegotiation. I think that they tried to go into some minimum utilization rate to the refinery. So assuming that there is no, I’m going to say, import gain, inventory gain this quarter, what can you expect in terms of recurring margins looking forward, assuming, I would say, the volume growth that you forecast? And second question, just would like to follow up at what stage is the renegotiation contract with Petrobras and Ipiranga in terms of how this could impact your, how can I say, your dynamics with year two with the supply? Thank you. André Pires: Hi, Luiz. Well, talking about import level, I think it was very clear that imports started the year much stronger than anyone anticipated. They have slowed down a little bit in February and March, and we are seeing or expecting that it will continue to slow. But again we do not see, as we’ve mentioned many times, that imports will disappear from the market. I think that the market will have a more competitive, a more even competitive environment, a more equilibrated competitive environment, this is the expectation. In terms of recurring margin that EBITDA in Reais per cubic meter, as I mentioned before, it’s very difficult to predict. You can estimate that throughout 2017, imports gains should probably represented BRL 5 to BRL 7 per cubic meters throughout the year. So obviously, this BRL 5 to BRL 7, probably, right? If the premium remains close to zero, it disappear. So that’s a good number for you to work on your models. Talking about negotiation, the supply contract with Petrobras, there is no news about that. This is, as far as we understand, is being discussed between the distributors and Petrobras. I think that what Petrobras is trying to achieve, obviously, is good terms with their distributors. But we don’t see any significant change in the operational environment that could potentially, I would say, change the market dynamics significantly.

Okay, thank you.

[Operator Instructions] And this concludes – we do have a follow-up question from Frank McGann of Bank of America Merrill Lynch.

Just in Extrafarma, at different points in time, management has suggested that if the conditions were attractive, M&A could be a way for Extrafarma potentially to expand or expand more rapidly and add a lot more mass to the company. I was just wondering what you’re thinking right now, given changes in the market? And it seems to be a little bit more difficult market, it’s more difficult to expand, if it’s – that might be an option for the company. André Pires: Frank, well, basically, I think we have mentioned many times that, let’s say, our strategy, our focus is organic growth. We understand that organic growth in terms of return on capital – return on investment – invested capital, ROIC, makes more sense than, let’s say, bolt-on acquisitions. And bolt-on acquisitions have a lot of challenges in terms of combining many different management standards, many different ways of doing businesses that could be very difficult to integrate. So clearly, our focus is to grow organically. We don’t see, let’s say, much granular in doing a transformative M&A at this point in the case of Extrafarma. So the focus is to grow organically. Obviously, it is part of our culture and part of our tradition, we will not simply close our eyes to investing in many opportunities if they appear. We don’t have any plans but we’re always going to look into it if there’s an opportunity that we can mitigate those risks of integration that I mentioned before. But at this point, we don’t have a target and our objective is to continue to grow organically.

Okay, thank you very much.

This concludes the question-and-answer session. At this time, I would like to turn the floor back to Mr. Pires for any closing remarks. André Pires: Okay. Well, thank you very much. Thanks for listening to the call, and hope to see you all again when we discuss our second quarter results. Thank you, and good afternoon.

Thank you. This concludes today’s Ultrapar First Quarter 2018 Results Conference Call. You may disconnect your lines at this time.