Itaúsa (ITSA4) Q4 2024 earnings summary

Executive summary

• Achieved record recurring net income of R$14.8 billion in 2024, up 22% year-over-year, with a recurrent ROE of 17.4% and strong portfolio performance despite a challenging macroeconomic environment.

• Portfolio market value reached R$121.5 billion, up 11% from December 2023, with shares outperforming IBOVESPA and IBRX 100 benchmarks.

• Shareholders' equity reached R$90.4 billion, a 9% increase from the previous year-end.

• Dividend distributions totaled R$9.6 billion for 2024, up 20% from 2023, with a dividend yield of 10.8% and a payout ratio of 68%.

• Announced a R$1 billion capital increase at a 30% discount to market value, with a 5% bonus share granted.

Financial highlights

• Recurring net income grew 22% year-over-year to R$14.8 billion; recurrent ROE reached 17.4%, up 1.7 percentage points.

• Investees' recurring net income reached R$41.1 billion, up 24% year-over-year.

• Net debt closed at R$1.05 billion, down 82% from the 2022 peak, with robust cash of R$3.6 billion and no principal amortization until 2028.

• Interest coverage improved to 13.0x, and average debt maturity extended to 6.6 years.

• Holding result was -R$691 million, mainly due to administrative and tax expenses.

Outlook and guidance

• 2025 Brazilian GDP projected at 2.2–2.5%, down from 3.4% in 2024, with Selic rate expected to rise to 15.75% and inflation to 5.8%.

• Management remains focused on liability management, portfolio efficiency, and maintaining high dividend payout.

• Quarterly fixed earnings of R$0.02 per share (net) will be paid starting in 2025.

• No change anticipated in dividend declaration practice.

• Cautious investment approach and focus on debt reduction amid persistent high interest rates and inflation.