Hapvida Adjusted Profit Falls 68% on Costs
Brazilian health insurer Hapvida earned US$19.2 million in adjusted Q3 profit, down 68%, as the share of revenue spent on members' care rose. The post Hapvida Adjusted Profit Falls 68% on Costs appeared first on The Rio Times .
Hapvida, a Brazilian health insurer, saw its adjusted third-quarter net income fall 68.3% year-over-year to R$107.0 million, or about US$19.2 million, on Wednesday, 11 November. Despite a 3.9% rise in revenue, the company's profit fell due to higher costs associated with medical care. Revenue increased slightly to R$8.08 billion, or US$1.45 billion, driven by price hikes on health-plan contracts.
However, the share of revenue spent on members' medical care grew, reaching 77.2% from 75.2% a year earlier. The company attributed the cost increase to seasonality, civil legal contingencies, and one-off expenses from closing and optimizing care facilities. Additionally, Hapvida reviewed loss-making and delinquent contracts, which reduced its beneficiary base to 15.695 million from 15.976 million a year earlier.
The average gross ticket per health plan increased 7.0% to R$313.30, or US$56.12. The company's net debt rose by 24.7% to R$5.30 billion (US$949 million), though it was R$100.9 million lower than the end of June. The leverage, net debt divided by 12 months of adjusted EBITDA, was 1.67 times compared to 1.00 times a year earlier.
Hapvida's shares are listed on B3, Brazil's stock exchange, under the ticker HAPV3. The company noted that contract adjustments, a different sales mix, and cancellation of loss-making contracts contributed to the lower average ticket. The recovery of profit depends on bringing down the loss ratio, rather than increasing the number of plans sold.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
