Hospital Mater Dei (MATD3) Q2 2024 earnings summary

Executive summary

• Revenue grew 8.3% compared to the second half of 2023, but profitability was impacted by lower patient complexity, seasonality, and higher costs, especially in June due to dengue and respiratory diseases.

• July and August showed significant recovery, with strong growth in surgeries and patient volumes, particularly in Salvador and the metropolitan region.

• Divestment of Porto Dias (CSN) improved financial discipline, with BRL 410 million cash inflow and a BRL 744 million impairment impacting reserves.

• Opened Nova Lima hospital with 117 beds scheduled for August, and celebrated Salvador unit's two-year anniversary and JCI certification.

• Appointed new executive for innovation and patient experience, advancing growth and succession initiatives.

Financial highlights

• Net revenue was BRL 585 million in Q2 2024, up 5.6% year-over-year and stable sequentially; H1 net revenue rose 8% year-over-year to R$1,168 million.

• Adjusted EBITDA margin was 20.6% in Q2 2024, down 3.3pp year-over-year, with adjusted EBITDA at BRL 120 million.

• Net income margin was 8.8% in Q2 2024, down 2.2pp year-over-year, with adjusted net income at BRL 51 million.

• Cash position at semester end was BRL 325 million, with BRL 136 million operational cash generation in H1.

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

Outlook and guidance

• Expectation for double-digit revenue growth remains, with July and August already showing improved mix and higher profitability.

• Initiatives to offset the nursing bill impact are expected to yield results within 12 months, leveraging supply chain and procurement projects.

• Expansion projects underway, including Nova Lima opening, new beds and emergency room at Hospital Premium, and land acquisition for EMEC unit expansion.

• Portfolio adjustments and divestments aim to strengthen financial discipline amid sector challenges.