Porto Seguro (PSSA3) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 13.6% year-over-year to BRL 9.0 billion, driven by client base expansion to 17.7 million, despite significant claims from Rio Grande do Sul floods.

• Net income for Q2 2024 was BRL 584 million, down 13.6% year-over-year due to extraordinary events; adjusted net income would have been BRL 691 million, a 2.1% increase year-over-year.

• ROAE was 18.5% in Q2 2024, with adjusted ROAE reaching 21.8% excluding extraordinary events.

• Investment portfolio revenue was BRL 224.7 million, representing 69.3% of CDI.

Financial highlights

• Total revenue increased 13.6% year-over-year, with Porto Saúde up 50.2%, Porto Bank up 23.5%, and Porto Seguro up 3.6%.

• Net income for 1H24 rose 21.3% compared to 1H23.

• Porto Bank net profit increased 58.5% year-over-year, with ROAE at 28.3%.

• Porto Saúde recurring net income grew 169.9% year-over-year, excluding non-recurring impacts.

• Financial investment revenue (excluding pension) was BRL 224 million, 69% of CDI.

Outlook and guidance

• 2024 guidance maintained for all business lines, with Porto Bank revenue growth 13–19%, Porto Saúde earned premium growth 40–50%, and Porto Seguro earned premium growth 5–10%.

• Loss ratio and efficiency ratio targets held across all business lines.

• Dividend payout expected to remain in the 40-50% range.

• Financial investment performance expected to improve in 2025 due to portfolio repositioning.