Hapvida Achieves R$83.4 Million Profit in Q1, Reversing R$341.6 Million Loss

Hapvida (HAPV3) reported a net profit of R$83.4 million ($16.20 million) in Q1 2023, reversing a R$341.6 million ($66.34 million) loss from the previous year.

Including non-recurring gains, such as R$12.3 million ($2.39 million) from the Maida Health sale, the adjusted net profit reached R$506.9 million ($98.42 million).

This marked a 53.3% year-on-year increase.

Hapvida, one of Brazil’s largest healthcare providers, significantly impacts the country’s healthcare landscape.

It offers extensive medical services and insurance, influencing accessibility and quality of healthcare for millions of Brazilians.

Adjusted EBITDA reached R$1.011 billion ($196.31 million), marking a 59.4% increase.

This is the highest figure since merging with NotreDame Intermédica. The EBITDA margin grew by five percentage points, reaching 14.5%.

Net revenue increased by 3.9% to R$6.991 billion ($1.36 billion), driven by adjustments in health plan prices.

The average ticket rose from R$236.10 ($45.86) to R$ 261.10 ($50.71) in Q1 2023.

Despite these gains, Hapvida faced a 1.9% annual decline in its customer base, totaling 15.812 million clients.

Hapvida emphasized the necessity of price adjustments for economic balance. The company aims to build a more profitable and sustainable portfolio.

Hapvida reduced its cash loss ratio to 68% in Q1 2024, the lowest since its merger. This compares to 69.3% in Q4 2023 and 72.3% in Q1 2023.

The company attributed this reduction to lower utilization rates, price adjustments, increased vertical integration, and cost control measures.

Hapvida Achieves R$83.4 Million Profit in Q1, Reversing R$341.6 Million Loss

Hapvida continues to enhance its vertical integration, closing the quarter with 801 proprietary healthcare units.

These include clinics, hospitals, and diagnostic centers. Hapvida remains committed to optimizing its own network use, reducing reliance on third-party networks.

Financial results showed a net expense of R$256.2 million ($49.74 million) for Q1, a 16.4% drop from Q4 and 40.4% from Q1 2023.

The company ended the quarter with R$7.76 billion ($1.51 billion) in cash, down R$ 132.4 million ($25.70 million) from December.

This decline links to principal and interest payments, partly offset by investment returns and R$613.9 million ($119.20 million) in free cash flow.

M&A activities generated R$34.8 million ($6.76 million) in Q1. This includes R$21.7 million ($4.21 million) from the sale of São Francisco Resgate and R$20.8 million ($4.04 million) from Maida Health operations.

Net debt stood at R$4.392 billion ($852.82 million), reducing leverage to 1.13x EBITDA from 2.32x last year.

On May 6, Hapvida’s board approved a new R$ 1 billion ($193.20 million) debenture issuance.

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