Itaúsa (ITSA4) Q2 2024 earnings summary

Executive summary

• Recurring net income reached R$3.6 billion in 2Q24, up 22% year-over-year, and R$7.22 billion in 1H24, up 29.7%, driven by strong portfolio performance and effective liability management.

• Portfolio market value rose to R$128.6 billion, a 12% increase from June 2023.

• Recurring ROE for 1H24 was 17.5%, up 2.6 p.p. from 1H23.

• Shares outperformed Ibovespa, rising 17.1% over 12 months, with a significant market value discount of 21.1%.

• AAA national credit rating reaffirmed in July 2024, with robust liquidity and no principal amortization until 2028.

Financial highlights

• 2Q24 net income: R$3.76 billion (+4.7% YoY); 1H24 net income: R$7.24 billion (+13.2% YoY); recurring net income: R$7.22 billion (+29.7% YoY).

• Total assets: R$92.3 billion (+4.4% YoY); shareholders' equity: R$83.6 billion (+8.7% YoY).

• Net debt reduced by 70% YoY to R$833 million; net debt/equity at 1.0%.

• Dividend yield (LTM): 8.6%; R$6.1 billion in dividends and interest on equity paid in 1H24.

• Interest coverage ratio at 12.4x; average debt term extended to 7 years.

Outlook and guidance

• Management remains confident in long-term value creation, focusing on sustainable growth, efficient capital allocation, and prudent liability management.

• No principal debt amortization until 2028; continued focus on deleveraging and dividend distribution.

• Macroeconomic environment remains challenging, with GDP growth forecast at 2–2.5% for 2024 and Selic at 10.5%.