Rede D'Or São Luiz (RDOR3) Q3 2024 earnings summary

Executive summary

• Net revenue for Q3 2024 reached BRL 14.1 billion, up 9.1% year-over-year, with a stable occupancy rate of 78% and 230 additional operational beds year-over-year.

• Consolidated EBITDA rose 30.6% year-over-year to BRL 2.5 billion, with margin expansion and strong operational cash generation.

• Net income grew 60% to BRL 1.2 billion in Q3 2024, with adjusted net income nearing BRL 1.3 billion, excluding non-cash amortization effects.

• SulAmérica's beneficiary base grew 4.6% year-over-year to 5.2 million, with a consolidated loss ratio improvement of over 4 percentage points year-over-year.

• SulAmérica contributed BRL 7.6 billion in net revenue (+9.8% year-over-year), with significant improvement in claims ratio and EBITDA.

Financial highlights

• Hospital, oncology, and other services net revenue grew 10.2% year-over-year to BRL 7.2 billion in Q3 2024.

• Oncology segment gross revenue for Q3 was BRL 823 million, up 17% year-over-year, with average ticket rising 12%.

• Average ticket increased 8.8% year-over-year; 129,300 surgeries performed (+3.4% vs. 2Q24).

• Gross margin expanded from 23.6% to 24.5% as cost growth lagged revenue growth.

• Consolidated operational cash flow for 9M24 was BRL 6.6 billion, up 65% year-over-year, with EBITDA-to-cash conversion at 126.1%.

Outlook and guidance

• Over 40 organic expansion projects underway, with 5,384 new beds planned between 2024 and 2028.

• Multiple greenfield and brownfield hospital expansions are planned for 2025, including new units in Assunção, Caxias D'Or, São Lucas, and Ribeirão Preto.

• Management expects continued positive cash flow and disciplined capital allocation, with a focus on sustainable growth and operational efficiency.