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

Executive summary

• Net revenue reached R$13.2 billion in 3Q24, up 9.9% year-over-year, with record quarterly revenue and strong growth in both hospital and insurance segments.

• EBITDA rose 30.6% year-over-year to R$2.5 billion, with a margin of 29.9%; adjusted EBITDA (excluding D'Or Consultoria sale) was R$1.8 billion, margin 25.2%.

• Net income increased 59.8% year-over-year to R$1.2 billion in 3Q24; adjusted net income was R$1.3 billion, excluding amortization from business combinations.

• SulAmérica contributed R$7.6 billion in net revenue (+9.8% YoY), with a consolidated loss ratio improvement and EBITDA up 404% YoY.

• Expansion included new hospital openings and the launch of Atlântica D'Or, a strategic partnership with Bradesco Seguros.

Financial highlights

• Hospital segment gross revenue grew 9.6% YoY to R$8.1 billion; oncology revenue up 17.7% YoY, driven by higher average ticket and infusion volume.

• Net revenue for hospitals, oncology, and others was R$7.2 billion (+10.2% YoY); SulAmérica net revenue R$7.6 billion (+9.8% YoY).

• Consolidated EBITDA reached R$2.5 billion (+30.6% YoY); adjusted EBITDA R$1.8 billion.

• Gross profit for hospitals, oncology, and others was R$1.7 billion (+10.9% YoY), with a gross margin of 24.1%.

• Operational cash flow in 9M24 was R$6.6 billion, up 65% YoY, with a cash conversion rate of 126.1%.

Outlook and guidance

• Over 40 expansion projects underway, targeting 5,384 new beds by 2028, including greenfield and brownfield developments.

• Atlântica D'Or partnership expected to drive further growth and market presence.

• Management expects continued positive cash flow and operational growth, with accelerated ramp-up in new hospitals exceeding historical models.

• Focus remains on sustainable pricing, product innovation, and further improvement in claims ratios.