Porto Seguro (PSSA3) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 reached R$739.1 million, up 32.3% year-over-year, with ROAE at 22.9% and all business verticals posting profitability above 20%.

• Total revenue for Q3 2024 was R$9.5 billion, up 11% year-over-year, driven by business diversification and strong performance in health, banking, and services.

• Health insurance added 131,000 lives (+25.7% YoY), with a 2.3 p.p. reduction in claim rate and premiums up 41.5%.

• Business diversification advanced: Porto Seguro contributed 59.3% of results, Porto Bank 22.8%-29.7%, Porto Saúde 5.2%-10.6%, and Porto Serviço 7.2%.

• Recognized as a top employer and most remembered insurance brand in Brazil.

Financial highlights

• ROAE for Q3 2024 was 22.9%-23%, with all verticals above 20%; insurance and Porto Bank posted up to 29%.

• Porto Bank revenue grew 24.1% to R$1.5 billion, net income reached R$165.4 million, and ROAE was 29%.

• Porto Serviço posted EBITDA of R$106 million with a 17% margin.

• Net income for the quarter was R$430 million, with no non-recurrent or climate impacts.

• Porto Bank's credit portfolio grew 9.2%, mainly from credit cards, and delinquency rates improved.

Outlook and guidance

• Guidance for Porto Saúde loss ratio improved to 75%-79% and revenue growth to 18%-24%; 2024 projections maintained for most verticals.

• Expectation for 2025 is a return to pre-pandemic loss ratio levels in health, with continued seasonality.

• Bank and insurance verticals anticipate continued growth, with ROAE expected to remain above 20%.