Itaúsa (ITSA4) Q2 2024 earnings summary

Executive summary

• Achieved record recurring net income of R$7.2 billion in 1H24, up 29.7% year-over-year, with a resilient and diversified portfolio despite a challenging macroeconomic and political environment.

• Return on equity reached 17.5% in 1H24, up 2.6 p.p. from 1H23, and portfolio market value rose to R$128.6 billion, a 12% increase from June 2023.

• Shares outperformed Ibovespa, rising 17.1% over 12 months, but still trade at a significant discount to fair value, especially considering non-listed assets.

• Liability management led to reduced debt costs, extended maturities, and improved liquidity, with S&P reaffirming AAA national credit rating in July 2024.

• Dividend yield reached 8.6%, with R$1.9 billion in dividends declared in 1H24.

Financial highlights

• 1H24 recurring net income: R$7.2 billion (+29.7% year-over-year); 2Q24 recurring net income: R$3.6 billion (+22% year-over-year).

• 1H24 net income: R$7.2 billion (+13.2% year-over-year); 2Q24 net income: R$3.76 billion (+4.7% year-over-year).

• Investees' recurring net income totaled R$20.1 billion in 1H24, up 25% year-over-year.

• Dividend yield for the last 12 months: 8.6%, with R$1.9 billion in dividends declared.

• Financial expenses reduced by 65% year-over-year due to liability management.

Outlook and guidance

• Management remains focused on active portfolio and liability management, with a positive outlook for dividend flows and continued deleveraging.

• No major new investment cycle anticipated unless market conditions improve; focus remains on value creation.

• Dividend distribution policy to continue, with potential for higher payouts if non-financial subsidiaries increase distributions.

• Macroeconomic environment remains challenging, with cautious outlook on interest rates and inflation.

• Brazilian GDP growth forecast at 2–2.5% for 2024, Selic rate at 10.5%, and inflation at 4.2%.