Caixa Seguridade Participações (CXSE3) Q2 2024 earnings summary

Executive summary

• Managerial net income for Q2 2024 was BRL 770.3 million, down 6.4% year-over-year due to extraordinary claims from Rio Grande do Sul floods and credit life provisioning, but normalized net income rose 12.8% to BRL 928.2 million.

• Interim dividends of BRL 702 million were approved, representing 91.1% of adjusted net income.

• New ESG-focused products launched, including Apoio Vida + FUTURO insurance and Prev Juntos + FUTURO private pension; Gold Seal awarded for GHG emissions management for the second consecutive year.

• Humanitarian actions and support for Rio Grande do Sul included claims process agility, fee exemptions, extended deadlines, expanded assistance, and over BRL 430 thousand in donations.

• Extraordinary events significantly impacted Q2 results, but underlying business growth remains strong.

Financial highlights

• Operating revenues in Q2 2024 reached nearly BRL 1.1 billion, down 0.9% year-over-year, but would have grown 13.7% excluding extraordinary events.

• ROE was 59.7% in Q2 2024; normalized ROE excluding extraordinary claims was 61.6%, up 6.2 p.p. year-over-year.

• Written premiums grew across all segments, with Mortgage up 10.4%, Home up 18.2%, Credit Life up 11.2%, and Assistance up 36% year-over-year.

• Private pension reserves reached nearly BRL 163 billion, up 12.8% year-over-year; Credit Letters funds raised surged 86.6% to BRL 941.2 million.

• Dividend yield annualized at 8.58% in Q2 2024, with a P/E of 12.15 and EPS of BRL 0.26.

Outlook and guidance

• Management expects normalization of loss ratios and financial results in H2 2024, with strong commercial performance and continued premium growth anticipated.

• Ongoing focus on digitalization, ESG product launches, and channel diversification to support future growth.

• Private pension contributions are expected to improve modestly in H2, but not return to 2022 levels.