Rede D'Or São Luiz (RDOR3) Q4 2023 earnings summary

Executive summary

• 2023 consolidated gross revenue was R$50.0bn; EBITDA was R$6.4bn and net income R$2.2bn. Adjusted net income was R$2,395.8m, excluding portfolio-amortization effects.

• Hospital services, oncology and other services generated R$28.4bn in gross revenue, up 10.3%; SulAmérica’s 2023 loss ratio improved to 86.4%.

Financial highlights

• Consolidated gross revenue was R$12.7bn in 4Q23 and R$50.0bn in 2023; net revenue was R$11.9bn and R$46.9bn, respectively.

• Consolidated EBITDA was R$1.5bn in 4Q23 and R$6.4bn in 2023; including financial results from insurer restricted assets, 2023 EBITDA was R$7.4bn.

• Net income was R$668.1m in 4Q23 and R$2.2bn in 2023; adjusted net income was R$720.7m and R$2,395.8m, respectively.

• Hospital gross profit rose 21.3% YoY to R$1.5bn in 4Q23, with a 23.6% margin; FY gross profit increased 15.0% to R$6.0bn, also at a 23.6% margin.

Segment performance

• Hospital services 2023 EBITDA grew 19.7% to R$6.3bn; margin expanded 1.9 pp to 25.0%, supported by revenue growth, cost optimization and contingency-provision reversals.

• Hospital segment EBITDA was R$1.4bn in 4Q23, up 17.2% YoY, with a 22.7% margin; gross revenue rose 8.7% to R$7.0bn.

• SulAmérica net revenue rose 14.6% to R$27.0bn in 2023; adjusted EBITDA was R$993.4m. Its loss ratio improved 2.1 pp to 86.4% for the year and 7.4 pp to 85.1% in 4Q23.

• Oncology gross revenue rose 17.3% to R$2.7bn in 2023; infusion volume increased 1.7% and average ticket advanced 15.3%.