Hospital Mater Dei (MATD3) Q2 2024 earnings summary

Executive summary

• Net revenue for 2Q24 reached BRL 585 million, up 5.6% year-over-year and stable sequentially, with 1H24 net revenue at BRL 1,168 million, up 8.3% year-over-year.

• Adjusted EBITDA was BRL 120 million in 2Q24, down 18% year-over-year, with a margin of 20.6%; adjusted net income was BRL 51 million, down 18% year-over-year.

• Divestment of 70% stake in Centro Saúde Norte (CSN)/Hospital Porto Dias was announced, resulting in a BRL 744 million impairment and strengthening financial discipline and cash position.

• Hospital Nova Lima opening is scheduled for August 2024, adding 117 beds and expanding presence in Belo Horizonte metro area.

• New executive for Innovation and Patient Experience appointed, advancing succession and innovation initiatives.

Financial highlights

• Net revenue was BRL 585 million in Q2 2024 (+5.6% YoY), and BRL 1,168 million in 1H24 (+8.3% YoY); gross revenue in Q2 was BRL 663 million (+7% YoY).

• Adjusted EBITDA margin was 20.6% in Q2 2024, down 5.9pp year-over-year; gross margin was 29.9%, down 3.4pp year-over-year.

• Adjusted net income margin was 8.8% in Q2 2024, down 2.2pp year-over-year; net loss of BRL 459 million in Q2 2024 due to impairment.

• Cash and equivalents at quarter-end were BRL 325 million, up 2% from year-end 2023.

• Total debt reached BRL 1,449 million, up 15% sequentially due to a new debenture issue.

Outlook and guidance

• July and August showed significant improvements in occupancy and procedure mix, with expectations for continued recovery.

• Hospital Nova Lima opening on track for August 2024, with expansion projects underway at other units.

• Supply chain and procurement projects are expected to offset the nursing bill impact within 12 months.

• Portfolio adjustment and divestment aimed at strengthening financial discipline amid sector challenges.

• New hospital openings and payer negotiations are expected to drive further growth.