Rede D'Or São Luiz (RDOR3) Q1 2025 earnings summary

Executive summary

• Gross revenue reached R$14.1 billion in 1Q25, up 6.8% year-over-year, with net income surpassing R$1.0 billion, a 21.1% increase year-over-year, and operational cash generation at R$3.2 billion, up 85.1%.

• SulAmérica's integration contributed R$8.0 billion in net revenue (+12.2% year-over-year), improved claims ratio to 78.6%, and membership grew 8.5% to 5.4 million beneficiaries.

• The hospital network expanded to 79 units and 13,054 beds, with 10,148 operational beds at quarter-end, up 291 from year-end and 419 year-over-year.

• Strong growth in both hospital and insurance segments, reflecting successful integration and expansion.

• Operational efficiency and digital transformation advanced, with 55% of consultations and 33% of exams scheduled online.

Financial highlights

• Consolidated EBITDA was R$2.3 billion (+22.1% year-over-year), with a margin of 23.8%; adjusted EBITDA, including SulAmérica, reached up to R$2.7 billion (+24.5%).

• Net debt stood at R$17.3 billion, with net debt/EBITDA at 1.7x, or 1.1x including technical provisions.

• Gross revenue from hospital services was R$7.9 billion, up 6.8% year-over-year; oncology segment revenue was R$869 million, up 16.5%.

• SulAmérica's adjusted EBITDA soared 106.4% year-over-year to R$986.3 million, with consolidated adjusted EBITDA at R$2.64 billion, up over 21%.

• Net cash position (excluding technical reserves) was R$19.4 billion; gross debt at R$36.8 billion.

Outlook and guidance

• Expecting accelerated ramp-up of new assets, especially Atlântica D'Or, and continued organic project deliveries in coming years.

• Anticipate stronger bed growth in Q2 2025 due to ramp-up of new units, with seasonality expected to differ from previous years.

• Portfolio price adjustments and beneficiary growth expected to support continued revenue expansion.

• Maintaining financial discipline, with flexibility for new investments and share repurchases.

• Atlântica D'Or partnership with Bradesco Seguros expected to drive further growth, with four hospitals operational and two more under development.