The 14 publicly traded healthcare companies — hospitals, diagnostic medicine laboratories, and health insurance companies — had a loss in profitability in the first quarter, when compared to the same period last year. The earnings reports were impacted by the macroeconomic environment, which led to more cancellations of health insurance plans, and by the wave of the omicron variant of Covid-19 earlier in the year, which reduced the performance of other medical procedures and generated lower revenue for service providers.

Besides this, as most of the healthcare companies are undergoing a strong process of mergers and acquisitions, which require resources and increase indebtedness, the financial result has deteriorated with the rise in interest rates, reflecting on the net income.

The most affected in the quarter were operator Hapvida and broker and administrator of medical insurance plans Qualicorp, both with great loss of clients. Hapvida, which concluded its merger with NotreDame Intermédica in February, had 431,000 contracts suspended and another 157,000 cancelled due to layoffs in companies that offered the benefit to their employees. There were 524,000 new sales, but they were not enough to cover all the losses. The same happened with Qualicorp, which gained 115,100 clients, but had 131,100 losses in its portfolio.

On the day the quarterly numbers were released, Quali’s shares depreciated 13% on the stock market, and Hapvida’s dropped almost 17%, due to the weak results, but also because of the prospects. The scenario from now on is uncertain, with high interest rates and high increases in the health insurance plans, with prices expected to swell between 15% and 20% on average.

On the one hand, the recomposition of medical inflation will provide improvement in revenue and other gains to the companies, but at the same time there is a higher risk of default and withdrawal from health insurance plans. “A weak 2022 start, but is the worst already over?” was the questioning made by Itaú BBA analysts, in a report.

Insurers SulAmérica, Bradesco Saúde, and Porto Saúde saw their loss ratio increase in the first quarter, which was offset by the improvement in the financial result. The insurers have a better indicator because they have a larger volume of reserves than the operators and are not promoting acquisitions at the same pace as their competitors.

OdontoPrev, the largest operator of dental plans in the country, also felt the impact of the economic environment. In the first quarter, the company lost 28,000 users and the average ticket fell 1.2%.

The five hospital groups – Rede D’Or, Mater Dei, Dasa, Kora and Oncoclínicas – saw the EBITDA margin fall, with variations between 0.2 to 3.7 percentage points. At the beginning of the year, the spread of omicron made the average ticket of the procedures performed in the hospitals lower. In Rede D’Or, the reduction was 3.2%, and in Mater Dei, 12%. “We see the drop in ticket, pressure of margins and high leverage as a worrisome combination for the results in the short term,” says XP in a report.

Among the diagnostic medicine chains, there is loss of profitability due to Covid and negative financial results. But the performance among them varies a lot. Fleury and Hermes Pardini reported double-digit revenue growth, but the bottom line of the earnings report was pressured by financial expenses. Alliar, taken over by businessman Nelson Tanure, had worse results in its main indicators. The company attributed the bad performance to the Covid wave, which led to a reduction in elective exams and professionals leaving the company.

In common, the executives of the companies highlighted in their conference calls with analysts and investors that the scenario in March was of recovery, with a lower volume of layoffs in the companies that contract health insurance plans. Besides this, there is a positive expectation with the increase of the tickets coming from the price hikes of the plans and the resumption of elective procedures, which generate more profit, with the easing of Covid infection levels.

Most of the CEOs and financial heads of the healthcare groups said that, despite the current level of the Selic rate and its impact on the earning reports, they do not intend to reduce the growth strategy through acquisitions. They pondered that the analyses are more careful, but there was no change in plans. Hapvida has 20 assets for purchase on the radar. Dasa informed that the acquisitions will not take place at the same pace as in the last two years. In this period, the company, controlled by the Bueno family, promoted nine acquisitions with disbursements of $2.5 billion.

In recent months, the highlight deals were the acquisition of SulAmérica by Rede D’Or and the joint investment of R$678 million by BP — Beneficência Portuguesa, Bradesco Saúde, and Fleury — in an oncology company.

Source: Valor International

https://valorinternational.globo.com