Porto Seguro (PSSA3) Q2 2024 earnings summary

Executive summary

• Total revenue grew 13.6% year-over-year to R$9.0 billion in 2Q24, with net income at R$584 million, impacted by extraordinary weather events and government bond rollovers; adjusted net income would have reached R$691 million, a 2.1% increase year-over-year.

• ROAE was 18.5% in 2Q24, with adjusted ROAE excluding extraordinary events at 21.8%.

• Client base reached 17.7 million, and investment portfolio revenue was R$224.7 million, representing 69.3% of CDI.

• All business verticals reported revenue growth, with Porto Saúde up 50.2% and Porto Bank up 23.5% year-over-year.

Financial highlights

• Net income for 1H24 grew 21.3% year-over-year, reaching R$1,256.4 million.

• Porto Saúde recurring net income grew 169.9% year-over-year, excluding non-recurring impacts.

• Porto Bank net profit increased 58.5% year-over-year, with ROAE at 28.3%.

• Dividend payout policy remains at 40-50% of net income.

• Earnings per share for 1H24 were R$1.90358, up from R$1.57394 in 1H23.

Outlook and guidance

• 2024 guidance maintained: Porto Bank revenue growth 13–19%, Porto Saúde earned premium growth 40–50%, Porto Seguro earned premium growth 5–10%.

• Loss ratio and efficiency ratio targets held across all business lines.

• Consolidated financial result projected at R$0.85–1.0 billion, effective tax rate 30%-36%.

• ROE is expected to remain above 20% sustainably, with upward trends due to business mix and dilution of intangibles.