Rede D'Or São Luiz (RDOR3) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 reached BRL 14.1 billion, up 9.1% year-over-year, with a stable occupancy rate of 78% and 230 additional operational beds year-over-year.

• Consolidated net revenue for the nine months ended September 30, 2024, was BRL 37.7 billion, a 9% increase year-over-year.

• EBITDA for Q3 was BRL 2.5 billion (adjusted to BRL 2.7 billion), up 30.6% year-over-year; net income grew 60% to BRL 1.2 billion in Q3 and reached BRL 2.999 billion for the nine months.

• SulAmérica's beneficiary base grew 4.6% year-over-year to 5.2 million, with a consolidated loss ratio improvement of over 4 percentage points year-over-year.

• Debt leverage reduced to 1.9x net debt/EBITDA, with strong cash generation and operational expansion.

Financial highlights

• Average ticket increased 8.8% year-over-year; hospital segment net revenue for Q3 was BRL 8 billion, up 2.3% sequentially and 9.6% year-over-year.

• Oncology segment gross revenue for Q3 was BRL 823 million, up 3.1% sequentially and 17% year-over-year; average ticket rose 12% year-over-year.

• Gross margin expanded to 24.5% as cost growth lagged revenue growth; consolidated EBITDA margin was 18.9%.

• Operating cash flow for the nine months was BRL 6.6 billion, with EBITDA-to-cash conversion at 126.1%.

• Net income for Q3 was BRL 1.2 billion, up 59.8% year-over-year; basic and diluted EPS for the nine months were BRL 1.3032.

Outlook and guidance

• Over 40 organic expansion projects underway, with 5,384 new beds planned between 2024 and 2028, including new units in Assunção, Caxias D'Or, São Lucas, and Ribeirão Preto.

• New hospital network Atlântica D'Or established in partnership with Bradesco Seguros, expanding growth avenues.

• Management expects continued positive cash flow, disciplined capital allocation, and sustainable growth.