CM Hospitalar (VVEO3) Q2 2021 earnings summary

Executive summary

• Adjusted net revenue reached R$1,465.0 million in 2Q21, up 58.3% year-over-year, driven by organic growth and acquisitions, including the consolidation of Daviso.

• Adjusted EBITDA rose 57.5% to R$115.7 million, with a margin of 7.9%.

• Adjusted net income was R$82.1 million, up 203.5% year-over-year, with a margin of 5.6%.

• Cash cycle improved to 38 days, 19 days shorter than 2Q20.

• Integration of acquisitions and expansion of product and service offerings contributed to improved margins and operational scale.

Financial highlights

• Reported net revenue for 2Q21 was R$1,616.6 million, with adjusted net revenue at R$1,465.0 million, excluding non-recurring tax effects.

• Adjusted gross profit for 2Q21 was R$219.1 million (margin 15.0%), up 52.3% year-over-year.

• Adjusted EBITDA margin remained stable at 7.9% in 2Q21.

• Net debt/adjusted EBITDA ratio stood at 0.8x at the end of 2Q21.

• Ended 2Q21 with R$1,318.1 million in cash and equivalents.

Outlook and guidance

• Management expects continued growth in the second half of 2021, supported by vaccination progress and ongoing integration of acquisitions.

• ESG investments of R$65 million planned through 2024, including fleet electrification and packaging sustainability.