Rede D'Or São Luiz (RDOR3) Q2 2024 earnings summary

Executive summary

• Achieved record patient-day volume of 758,000 in Q2 2024, up 4.5% YoY, with a historic occupancy rate of 84.4% (+1.5 pp YoY).

• Net income doubled YoY to R$1.0 billion in Q2 2024, surpassing the one billion reais mark for the first time.

• Gross revenue reached R$7.9 billion for hospitals/oncology in Q2 2024 (+9.8% YoY); consolidated gross revenue at R$13.6 billion (+9.2% YoY).

• EBITDA for hospitals/oncology was R$1.8 billion (+13.3% YoY), margin at 26.3%; consolidated EBITDA at R$2.1 billion (+28.5% YoY).

• High NPS above 60, reflecting improved patient satisfaction despite sector challenges.

Financial highlights

• Hospital services gross revenue for Q2 2024 was R$7.895 billion, up 6.4% YoY; six-month gross revenue at R$15.3 billion, up 9.1% YoY.

• Oncology segment Q2 revenue was R$798.6 million, up 20% YoY; six-month revenue at R$1.5 billion, up nearly 70% YoY.

• Hospital services EBITDA for Q2 2024 was R$1.837 billion (13.3% YoY growth), with a margin of 26.3%.

• Adjusted net income for Q2 2024 was R$1.1 billion.

• ROIC (LTM) reached 20.4%, up 4.1 pp YoY.

Outlook and guidance

• Optimistic about 2025, expecting continued ramp-up from new hospital launches and expansions, with over 1,900 new beds expected by end of 2024 and into 2025.

• Anticipates further growth in surgery volumes and continued focus on efficiency gains.

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

• M&A pipeline remains open but selective, with preference for organic growth due to better returns and strategic positioning.

• SulAmérica continues to focus on price adjustments and claims management to maintain economic balance.