Diagnósticos da América (DASA3) Q2 2024 earnings summary

Executive summary

• Achieved 10% gross revenue growth and 27% EBITDA increase year-over-year in 2Q24, with significant leverage reduction and operational improvements, supported by a R$1.5 billion capital injection and strategic initiatives.

• Announced a major joint venture with Amil to create one of Brazil's largest independent hospital networks, pending regulatory approval.

• Advanced ESG and governance initiatives, including statutory Audit Committee and continued inclusion in B3's Corporate Sustainability Index.

• Net loss improved to R$101 million in 2Q24, a 64% reduction versus 2Q23, driven by higher gross profit and lower SG&A expenses.

• Consolidated investments (Capex) totaled R$85 million in 2Q24, down 47% year-over-year, focusing on high-return projects and asset maintenance.

Financial highlights

• Consolidated gross revenue reached R$4.3 billion, up 10% year-over-year; net revenue rose 9% to R$4.0 billion.

• Adjusted EBITDA grew 27% to R$668 million, with margin expanding by 2.4 percentage points to 16.9%.

• Adjusted gross profit increased 12% to R$1.2 billion, with adjusted gross margin up 0.7 p.p. to 30.0%.

• Net debt reduced by R$1.2 billion sequentially, ending at R$8.4 billion; leverage ratio (net debt/EBITDA) at 3.47x, below covenant limit.

• Cash and equivalents reached R$3.0 billion, covering 1.7x debts due by end-2025.

Outlook and guidance

• Management expects continued margin improvement, leverage reduction, and operational efficiency gains, supported by the Amil joint venture and ongoing process optimization.

• Investment budget for 2024 set at R$565 million, down 22% from 2023, with focus on projects with better economic and financial profiles.