Oncoclinicas do Brasil Servicos Medicos SA
BOVESPA:ONCO3
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Oncoclinicas do Brasil Servicos Medicos SA
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Good morning and welcome to the audio conference of Oncoclínicas.
[Operator Instructions] It is important to remember that this audio conference is being recorded.
I will now pass the floor to Dr. Bruno Ferrari, the Founder and CEO of the Oncoclínicas Group.
Dr. Bruno Ferrari, you have the floor.
Good morning to everyone. And thank you for your presence in our results teleconference. Once again, we have a quarter with operational and financial results that are very strong.
I would like to begin by thanking you all; and talk about net revenue, which was 51% (sic) [ up 51% ], reaching another record level of BRL 1.4 billion. The main highlight of our revenue is once again because of the organic growth, which was 31%. Most of this growth was due to the increase in the volume of procedures, which indicates sustainability. In a sequential base or comparing the second with the first quarter of 2023, our net revenue grew at 5%.
Still in relation to growth, I would like to highlight the advance in the number of treatment. In the second quarter, we carried out more than 157,000 procedures, a number which goes over 40% of the volume of the second quarter of 2022 and that grew around 4% in the comparison of the sequence. This very robust volume reflects a series of initiatives that the company has been putting into practice: our strong action in medical relationship; attraction and retention of talent in an organic way and more participation in the journey of our patients; and our approximation to health plans more and more by providing solutions and reaching their needs, connected to integrated management and cost effectiveness in oncological care which has been increasing in its perceived value.
Now to cover the highlights of the second quarter over the already mentioned growth. Our EBITDA in the last quarter reached BRL 268 million with a margin of 19.7%, more than 5 percentage points above the observed in the same quarter of 2023. This is fruit not only of the growth of the company with great operational leverage but also of the very successful execution of integrations with gains in efficiency in costs and expenses. The EBITDA growth was 109% over the second quarter of 2022. It's important to remember that EBITDA does not include adjustments and add-backs. If we [ exclude ] the [ BRL 13 million ] of the accounting effect, with no impact on cash, for us to compare with the adjusted numbers [ for those who accompany ], adjusted EBITDA would have been BRL 285 million in the quarter.
When we annualize the EBITDA of the second quarter of this year, we already pass the mark of BRL 1.1 billion.
I would also like to highlight our impressive advance in reducing the number of expenses in the last quarters. [ We're close to ] a level of 15% of operational expenses cash over net revenue. This performance is from the captured synergies overall from the many acquisitions that Oncoclínicas has concluded and integrated in a successful way over the last year. In other words, our gains in margin have been delivered with a combination of growth in volume; management, good management, of costs; and better operational efficiency in house.
Besides that, we report a net profit of BRL 35 million in the second quarter of 2023. This is our fourth consecutive quarter with net profit. If we exclude the effect of the accounting of the long-term plan, which represents an effect that is merely accountable and not -- or cash, our net profit of the quarter was BRL 48 million. In the last 12 months, the net profit, also excluding this collection of the incentive long-term plan, was BRL 268 million.
Finally, still on the topic of financial highlights, we delivered cash operational generation of BRL 309 million, a record amount for a second quarter of the company because of solid operational performance aligned to efficient working capital management. Even after the financial expenses and all the CapEx carried out in the second quarter, cash generation was still BRL 100 million for the second quarter of 2023.
In relation to the strategic term -- topics of the quarter, we could not forget to mention 2 important happenings. The first was the process of follow-on that the company [indiscernible] which transacted more than BRL 900 million and increased the liquidity of Oncoclínicas shares. Our average volume of negotiation increased BRL 19 million between January and June [ of this year to ] almost BRL 34 million, after the offering and until the end of the month of July. Besides that, at the end of May, we received the approval from CADE to move forward with our partnership with Porto Seguro, an operation which we expect to ramp up during the second semester of the year.
Before passing on the floor, I would like to congratulate the entire Oncoclínicas team which has been delivering strong execution of our strategy over the last quarters, starting with our physicians and assistants team; and of course, to our patients that, at every day, [ confide ] their privilege, the privilege of taking care of their lives in the same quality that we would take care of our own.
I pass the floor now to Rodrigo Medeiros, our Executive Vice President that will give us more details on operations.
Rodrigo?
Good morning, everyone. Thank you, Bruno, for that introduction.
Going on to the next slide, on Page 4, we show an update on the integrations that the company has been executing, that continues to execute and which we continue extracting synergies from in a very satisfactory way. Most of the acquisitions are already in the final phase of synergy extraction, except for Unity since it is the most recent operation, the largest of them, composed of 35 units. The very successful advance of integration is clear with the graph to the left which shows the evolution of our cash operation expenses with a percentage of net revenue. In the second quarter of 2022 to the second quarter of 2023, we reduced this indicator in -- 620 basis points from 21.4% to 15.2%.
It's important to highlight 2 points here. First, obviously this does not include cost synergies which appear in gross margin. Secondly, this indicator of 15% is the level on which the company operated before all of the acquisitions carried out ever since 2021, a level which we say we would only reach in the fourth quarter of '23. It's also important to highlight that the operational expenses in this quarter of BRL 207 million include around BRL 5 million of one-off expenses related to the follow-on project of the company. When we adjust for this effect, the relation between operational cash expenses and net revenue is at around 14.8% in the second quarter of '23, with an improvement over the sequence. Therefore, we are very encouraged with the speed in which the integrations and capture of gains in scale and efficiency have been moving, result of the expertise that the company developed over the years in acquisitions and in our flexibility to move -- to mobilize various internal teams at the same time.
Now an update on our expansion projects. We inaugurated at the end of the month of July the expansion of the cancer center [indiscernible]. And the center of diagnostic for cancer [indiscernible] initiative will allow the company to advance even more quickly in direction to a line of complete care for oncological patients in the city of [ Belo Horizonte ].
On the next slide, Page 5, we will show the financial highlights in the quarter. In the second quarter of 2023, the company grew 51.1% in net revenue compared to the same period of the previous year, reaching BRL 1.4 billion. From this growth, I highlight that more than half or 31.4% is organic. We also highlight the strong expansion of 100 basis points in gross margin in this quarter (sic) [ first half of 2023 ], reaching 35.7% compared to 34.7% in the first semester of 2022. This expansion comes from the gains in efficiency from the integrations that we commented on previously as well as the ramp-up of the cancer centers.
Still on this slide. We report an EBITDA, only excluding the effect of the collection of the just value of incentive long-term plan, at the value of BRL 268 in the quarter, with an expansion of 540 basis points in margin in relation to the second quarter of 2022. In the second [indiscernible] semester, our EBITDA added up to BRL 545, 126% higher than the previous year.
Finally, in the quarter, we had a net profit of BRL 35 million, in the second quarter of 2023, given the strong growth of operations and the expansion of profitability [ potentialized ] by the gains of -- in efficiency and the initiatives of optimization in taxing that the company has continued to execute.
On the next slide. Slide 6 highlights the -- we highlight the increase of 41% growth in procedure, reaching 157,400 procedures in the second quarter of 2023. Even in a quarter with less
[Audio Gap]
In the first semester, there was an increase of 44% in the number of procedures and 7% in the average ticket, especially associated to the increase in complexity since the company is covering more and more part of the journey which we did not operate in, again, and is doing this in a more cost-effective way. It's important to notice that our growth is very balanced and mainly from the increase in volume of procedures.
I pass the floor now to Cristiano Camargo, our CFO and Director of Strategy and RI, to give you the results of the second semester.
Thank you, Rodrigo. Good morning, everyone.
Once again, we had a quarter that was very solid for Oncoclínicas. And this is evident through the numbers that I will start to detail with you on the next slides. This was the third consecutive quarter in which we delivered organic growth of our revenue over 25% over the year, the fourth quarter -- the fourth consecutive quarter of net profit and the largest cash -- operational cash generation for a second quarter of the company.
Starting on Slide 7, we start by highlighting the growth of 51.1% in net revenue in the second quarter of 2023 compared to the same period of the previous year, reaching the record mark of BRL 1.4 billion. In the sequence, in other words, versus the first quarter of the year of 2023, we had an expansion of more than 5%. On the graph to the right, in the semestral comparison, we see the expansion of 55.3% in net revenue. This growth is due to a combination of organic growth, which we will detail on the next slide, with the contribution of inorganic growth, in function, above all, of the incorporation of Unity in our results.
Slide 8 shows that, from the growth of more than 50% that we had in our net revenue in the second quarter of 2023, 31.4% came organically; in other words, from the same units. This organic growth happens on the line of the already strong 32% which we have delivered in the first quarter of 2023 which on its hand came from the same line of the 26% which we delivered in the fourth quarter of 2022.
It is important to highlight that we started to consider Itaigara, our operation of day hospital in Salvador; and Microimagem, our unit of precision medicine in the State of Rio de Janeiro, as part of the same base of the -- same units after the second quarter of 2023 since they were added to the Oncoclínicas platform during the second quarter of 2022. Finally, it is important to highlight that the organic expansion of revenue happens much more as a result of the increase in volume than in the average ticket.
On Slide 9, we highlight the expansion of 100 basis points of the gross margin, reaching 35.7% for the semester period of 2023. In the comparison of the second quarter '23 versus second quarter '22, we observed a small drop in our gross margin, especially because of the smaller volume of anticipated purchases of medications which we carried out this year when compared to last year.
In the sequence of 2023, we had 2 effects that explain the reduction of gross margin. In the first quarter of the year, there was a reversion of [ PCLD ] at the level of BRL 20 million that contributed approximately to 1 percentage point for the margin of that period. Besides that, in the second quarter, the company already had its medication costs completely impacted by the readjustment from CMED. Meanwhile, it had not passed on the new prices of medication levels fully [indiscernible] sources, which should normalize in the next quarter.
On Slide #10. EBITDA with no adjustments, excluding the accounting effect for the long term, we reached 238 -- BRL 268 million in the second quarter of 2023, a margin of [indiscernible]. So for the comparison, historical comparison, those who compare, it was [ BRL 286 million ] with a margin of [ 31% ]. On the comparison of the semester, it expanded 650 basis points in its EBITDA margin, reaching BRL 545 million, 126% higher than the same period in the previous year.
On the next slide, #11, we report a net profit, excluding the noncash expenses from the long-term incentive plan, of BRL 48 million compared to a loss of BRL 19 million in the previous year, through the growth of the operations [indiscernible] profitability of the company and the initiatives to reduce inefficiency and taxes which we started to implement ever since April of last year and have shown huge advance until now.
On the next slide. [ Another great ] highlight in the second quarter are -- is our cash flow. In this quarter, the company generate BRL 309 million in operational [ cash, a result ] of a strong [ improvement in the ] business [ and added ] to efficient [indiscernible] capital management. We observe a light improvement in receivables, a sign that [ it's emerging since it's the first time that ] this happens in [ first quarter's ]. And this shows the substantial gain in efficiency in the payments that aligns with our suppliers through to the negotiation which we have been working on ever since the end of last year, of 2022, and which has been reaching more solidity with our partnerships and the pharmaceutical industry. The cash flow also improves because of our liability management program.
The company opted to pay back BRL 219 million debts that were more expensive, BRL 219 million in more expensive debts. Besides that, there was entrance of more than BRL 190 million of net revenue from follow-on, so in the end, we paid BRL 10 million related to the program to rebuy shares and approximately BRL 110 million related to CapEx and payments for acquisitions. On -- operational cash generation, even after the financial costs of [ BRL 166 million ].
On Slide 13, we show an improvement, a substantial improvement, in the company's working capital, reducing our net days in this indicator of -- 64 to 43 days, which we believe to be sustainable over the next quarters. On the next slide, we share the plan for amortization of the financial debt. In this quarter, we increased the disclosure to show the plan for the next quarters. The amortization tower shows that we have a very comfortable position for 2023 and for the year of 2024.
Finally and as a consequence cash generation, of the company's operational cash generation, on Slide 15: We have the -- we reduced our leverage from 3x in the first quarter of 2023 to 2.9x in the second quarter of 2023 [indiscernible] of net debt [indiscernible] [ BRL 140 million ] [indiscernible] related to closing the negotiation with Porto Seguro.
With that, we finish our earnings call presentation. And now we are open for questions and answers.
[Operator Instructions] Our first question is from Vinicius Figueiredo from Itaú BBA.
The first point I would like to explore with you is in relation to organic growth, also a little bit [ about the ] competitive dynamics. Your results seem to be very -- a bit disconnected, if we look at the competition, especially listed companies. While Oncoclínicas grew in volume and ticket, we see a different behavior with more pressures on ticket and even in volume in the competition. I want to understand the company's vision on this trend. Why is it different for the company, specifically if it would be something related to the ramp-up of several operations that are still in maturity? And then the second point I want to approach is in relation to the margins of cancer centers, if you could [ elaborate a bit upon that ], maybe in a more qualitative way [indiscernible] behavior of the [indiscernible]; and how you imagine -- how much space you imagine you can capture, especially in the cancer centers that are still in maturity. So getting [indiscernible].
Vinicius, thank you for that question. This is Cris speaking. Organic growth, well, we have [ experimented ] this dynamic, which we understand to be very consistent, in the growth of the same units. Because as we showed throughout the presentation, these are -- it's been a few consecutive quarters with this organic growth higher than 25%, between 25% and 30%. And when we look deeper into this organic growth, we see that it is predominantly because of the volume of procedures. In this quarter, in the second quarter, we saw more or less 22 to 23 percentage points from the total, [ having 1 points coming ] from volume. And this is something that we attribute to a combination of factors, but in practice it means that the company has been gaining in market share. That's our vision. Because we have an estimate of an [ oncological one as well as in ] volume of [indiscernible] [ 12 or in the low ] double digits from the point of view of volumes, but the company is growing around 10 percentage points higher than the market has been growing in volume. [ And whilst ] qualitatively speaking we can achieve, above all, between the very successful program of attracting physicians [indiscernible] [ clinical volume -- we have ] more or less 500 new physicians brought into the company in the last 12 months. And this attraction comes from a previous attraction for doctors. If we look, at the IPO, we had 1,600 physicians. And now we have 2,700 physicians [ today ]; and also because of seeing the increase in the [indiscernible] of our patients, as we have cancer centers that start to internalize more procedures which, before, were sent to outside the company. Today, we have more procedures for patients in the company. So this would be the [ 2 points that we'd see ] as sustainable over the next quarters.
The next question is from Fred Mendes from Bank of America.
First, on the question from Vinicius. On the issue of volume, have you've been able also to increase the volume of the clinics, the same-store sales? Because I understand, if you increase [ occupation ] costs, the -- it should generate even more margins. So if you're opening -- if you could explore this issue of volume once again, I would appreciate it. Second question is all about we saw an improvement [ throughout a few days ] for receiving payments. Do you understand that this is another issue connected to the sector, that all other payers are not [ seeing the impacts in ] the first quarter? Or do you think that this is more because of an internal work that you did with the players -- or with the payers?
I'll start by addressing the question of volume. This volume grew -- for it to grow, it grew in operation both for the inpatient and also in the cancer center unit. So as we said, once again, in the last [ quarter ], organically, 23% of growth in volume. And [ it's a base ] of the same units year-over-year. And it's not a problem, the capacity. If the -- the capacity of clinics is not a problem because we still operate with an installed capacity that is very comfortable. I would say we [ use ] an average indicator of around 40% in installed capacity. That is additional in our clinic and also remembering that the clinics are very flexible from the point of view [ of agenda ]. In other words, you can increase the schedules for services. You can change that. We can handle that with more freedom, so for the inpatient units, we see that it is much more because of the clinical [ body ] as a main factor increasing capacity. And then of course, of company of -- the focus of the company attracts and retains more talents for doctors and assistants.
About the average deadline for receiving payments, for receivables: When we shared our results in -- at the end of 2022, we mentioned that we were expecting an improvement in the dynamic of days in -- for receivables after the second quarter because, taking into account the readjustments that the health plans are expected to implement with their clients for their base of beneficiaries, [ when we look at it ] at some point, or what we [indiscernible] point of inflection in the claims plans and that this would be reflected in the cash flows and then consequentially to us providers. And so the combination of that with a very active posture of the company with a very systematic program to bring together [indiscernible] payers focusing on receivables and a very close relationship with them [ whilst understanding their ] pains and their difficulties -- the combination of both these factors have brought [ an improvement of ] 2 days, which we have already seen sequentially is the average deadline of receiving. Well, I think it's still too early to say. We're not going to risk any kind of prediction on how that will behave in the future. We have more control with the average deadlines after negotiating with our suppliers, but we don't have so much control [ from ] the suppliers because it really depends on sectorial factors. But it's already a very encouraging sign.
The next question is from Gustavo Miele from Goldman Sachs.
I would like to ask 2 very quick questions. It's more strategic. I would like to hear more about the partnership with the [ Santos group ] that you started in May. I wanted to understand. In this preoperational scope, what kind of exchange of knowledge have you had with [indiscernible] group? They have an inpatients oncological perspective and less outpatient, which adds a lot of complexity. I would like to know if there is any protocol or if there's anything that you can exchange with the [ Santos group ] because it's very important to your operation. If you could share with us some of what you understand on this, it would be great.
And then the second question. Sorry to insist on the subject of organic growth, but the state -- the company changed a lot in its operations in the last 12 months. I would like to understand what the concentration is of the readjustments in the company with the payers today. How much of the readjustments should we see in the third or fourth quarter to understand exactly what has been the organic growth? So that will lose relevance once [ price gains more space ], so if you could discuss a bit more on this dynamic, it would be great.
Miele, thank you. Bruno speaking. About the [ Santos group ], 3 weeks ago, we delivered the [ limited ] documents to CADE. So this is a very important milestone for us to bring this into effect from the point of view of business in the fastest way possible, but within the lines of what CADE allows, there is still a lot of interaction between the doctors of Oncoclínicas and the physicians of the [ Santos group's ]. So radio oncologists and image or -- image oncologists. So that had already this -- between Unity and the [ Santos group ], with a commercial agreement, before this large agreement with Oncoclínicas. So this door has already been an open door before. Of course, what will happen is, with the approval, [ the kind of integration ] will happen even faster. So we felt that, when we integrated the clinics of [ Brasilia ] with Unity, we are certain the same thing is going to happen between the Oncoclínicas Group and the [ Santos group ]. So there is a lot of goodwill, a lot of need from both groups. This happens in a timely manner. So with no exchange of strategic information, as CADE defines, we already have a working group to make this happen in a relatively timely way. In relation to the adjustments with the payers, I just want to remind you that the government releases this every year, in June; and then this is applied to the payers. So what is paid to the suppliers, it's only in August. And so some more -- some were implemented more quickly, and others more slowly. And that also depends on changes in the tables. So this is a process. It's more of a process. So the interesting thing here is that it's happened in the dynamic that it's always happened. I'm going to pass the floor to [ Luis ] because he can give you more detail and clarity in terms of numbers.
Thank you, Bruno. [ Here, Miele ], when we look at the increase of the average ticket over a sequence, it increased 1.4% in the first quarter against the fourth quarter of '22. And now it increased 1.5%, from the first to second quarter of '23, so we already have, and accumulating it, volume of 3.3% or 3.5%. And in line with what Bruno said, we have this more concentrated increase in the second quarter of the year -- the second semester of the year because of the anniversaries of the contracts and when most of the adjustments happen, so it's reasonable to say that we have already reached around 40% in the dynamic in the evolution of the average ticket for the year. And there is 60% more to go in the second semester.
The next question is from [ Ian Seskin ] from BTG Pactual.
There are 2 questions from me. First is about exclusivity rights with the physicians. There are some exclusivity rights that went down a lot, around 15 million. So 6 million in this semester. I just wanted to understand more about the granularity of this sequential change, if you could share with me the number of physicians with which you closed new exclusivity deals this semester and how you imagine the next semester to behave. That would be the first question. And then the next question is about the agreement with Porto Seguro, if you could give us a little more color on the size, the expected size, of this partnership for the future. Any contributions that you expect in revenue over 2024? Just to understand a few high-level details on the vision that you have, if you could share it with us.
So about the exclusivity rights, we had on -- in this quarter an addition on this line of BRL 5 million to BRL 6 million. So it was a value that was much lower than what we saw in the previous quarter, and this is completely connected to the number of physicians that were brought in with a regime of exclusivity. We saw in this quarter a total of 12 physicians, so a much lower volume than what we had seen in time of previous quarters. And as we have said, this number is a number that is going to behave completely because of the entry of new physicians in that quarter and how many of those physicians who have a clause of exclusivity in their [ bonds ] with the company, so there is a movement that certainly tends to be erratic or, let's say, difficult to foresee, although we have a team that is [indiscernible] focus on this. And of course, we have our annual goals. The negotiations happen and they mature at different moments. So you can have a quarter where you were able to sign up dozens of physicians, and then there are quarters in which it will happen on a smaller proportion. I think what's important to mention here is that this work started a year ago. And now we are talking not only about oncologists but also physicians and other specialized, so in relation to some of the cancer centers, we are ramping up. In terms -- well, these 12 are 12 clinical oncologists. We will continue with this program. This team continues not only to attract but also to develop and retain these talents, which is a very important issue for us. And it accelerates whenever we see moments of acceleration when we are talking about opening cancer centers because we are not bringing in only a physician. We are bringing in a team. And that's exactly what happened in these first 12 months that we -- since we started the program.
And the other one was about Porto, [ Ian ]. So this is an operation that the closing happened during the second quarter, but operationally it started in July, so we do not have a guidance for [indiscernible] and what this partnership will bring us in terms of revenue and EBITDA, but what we can say is that we started now the operation in July. And we have an estimate of accelerating it over the second semester and -- remembering that we are talking about a health plan with, more or less, 500,000 lives. That's a large concentration in São Paulo and in a smaller proportion in Rio de Janeiro but that have a [ BT or a ] plan for the -- from the point of view of growth which we seek to attain that is very aggressive. I think what's important to say is that we have a strategic team, our strategic team, and they are working with us. We already had our kickoff meeting together. So it's in their interest and in our interest that this happens quickly. We have a goal of making sure this happens, that the integration happens over the second semester and with the workforce that we have that is very -- it's important that this happens so we are sure that we will be able to extract the most in the fourth quarter. This is going to be reflected in our assistants numbers.
The next question is from Leandro Bastos, Citi.
So actually I have 2 questions. The first is if you could -- could you talk about the number of new diagnoses compared to pre-pandemic numbers, and new treatments? Just so we can understand exactly the dynamic. I think it would make things clearer for us. And that's one question. The other one is about the working capital, and here we have 2 questions. The first one is what we can expect after the second quarter. And can you tell us more about the strategy, if you have any new suppliers? If you could give us more color on that.
Leandro, it was a bit -- your sound was not so loud, but if I understood your question well: You want us to talk about the repressed amount of new diagnoses. No, we do not see that anymore. We think that it is a trend that we see. The pandemic is behind us now. It is no longer a repressed demand. Now they are new cases that we are capturing. And we are still waiting for the publications that will come out over next year because of the worsening of survival rates because of the pandemic, but we also think that -- in the last 12 months, that the number of early diagnoses have also increased in relation to the early deaths in relation to pre-pandemic levels. So we think that this is definitely, as we said, gains in market share and not repressed volume; and the increase of new patients in our units; and of course, what we were talking about 2 minutes ago, also because of the attraction and retention of new talents and physicians. That's a very important point. And the second question...
It was about working capital.
Leandro, I'll answer that question. So we see this new reality now of less net days of working capital, less in the future; above all, because if we look at the events that we had in the quarter, it has come, above all, from the increase in the average deadlines with suppliers, which once again is something that we've built together, above all, with the pharmaceutical industry. And there we talk about around 15 suppliers of medications. And that is long lasting because it was a new negotiation. And as we said previously, the deadline for receivables also showed an improvement. So that's a variable which we have less control over, but it was -- it affected us less in terms of these improvements from the average deadline...
The next question is from JPMorgan.
[indiscernible] well, the conversion of EBITDA into structural cash of the company should have, especially after the corporate restructuring that you expected in the second quarter and the leverage that -- [ kind of ] the second question is, of course, in relation to taxes. So what are the next steps [ for you to reach ] the normalized levels of [ cost ] divisions? And then after the ramp-up with Porto Seguro, I would like to know if we should continue [indiscernible] about in the future.
So about the first question, conversion of EBITDA and cash flow. We are working, we work with a scenario of conversion between 40% and 50%, looking at EBITDA for operational cash flow. So this, for this year of '23, taking into account the effective amount which will not have been from 34% of the whole year, this is a level that we only submit to reach in the fourth quarter and the advances which we have made so that the company is going in that direction, but for this year of '23, which will be a year, let's say, in the middle [ path ] between [indiscernible] when we started with 45%, [ 40% ]; and then expect to finish with 34% of effective amount. With [ this 40% ], well, what we saw in the second quarter was that the company [ zeroed ] what had been its cash operational flow in the first quarter; and now remembering that the second and fourth quarter are always going to be stronger in cash operational flow because of the seasonal aspect of our business. So we continue to believe that we are on track for the operational generation and conversion of EBITDA to cash flow, operational cash flow, between 40% and 50%. [ To ] normalize the amount, the effective amount of taxes.
We have 2 large events that are expected and that will contribute for this. The first is the incorporation of CTO, which is our operation in Rio de Janeiro ex [indiscernible], removing the operation of inpatient oncology in partnership with Unimed-Rio. We already have the incorporation, with a general extraordinary assembly scheduled for the 31st of August. It's very close, to deliberate on the [ incorporation of ] CTO, which is one of the restructuring in our shareholders which will happen in the third quarter. And after that, in preparation, we will have the definitive answer from CADE for the transactions of the 50% transaction in [indiscernible], which is an operation which is also inpatients oncology with Unimed-Rio. Once we close the acquisition, then the next step will also be to incorporate the [indiscernible] with Oncoclínicas at the holding. And that will make it possible for us to transfer more revenue mass and EBITDA and earnings before taxes for -- it will make it go higher. And in that way, we will optimize even more the tax shield that come from the financial expansions which today are predominantly allocated in the second floor, let's say. So that will bring us more benefits in reducing the effective amount, if we look at the consolidated [ snapshot ]. So the effective amount of taxes will move lower but based on these events of shareholder restructuring. So it doesn't move in a linear way, but it will go up and down every time there is a new restructuring event in our shareholder structure. So we have one more relative to [indiscernible]. And that's what we believe in our estimates will allow us to, in the fourth quarter, operate with an effective amount of 34%.
Finally, about the JV with Porto Seguro deal. How can that impact our reduction of minority shareholders? Well, maybe [ given ] while we have growth through JVs, we also have initiatives related to the acquisition of -- minority acquisitions in operations, some of them that are relevant for the company. I think some examples we can mention are the acquisitions that were made during 2001 (sic) [ 2021 ], especially UMC and Itaigara, where we made acquisitions that were predominantly [indiscernible] but there are still relevant stakes that the company has the option to buy in a predefined window of time. So as we move with this purchase of -- remaining purchases, also taking into consideration the transaction of [indiscernible], which is very relevant from the point of view of size, we will migrate towards a participation of minority shareholders of around [ 28% ] to 13%, something between 10% and 13%. And then in this -- at the second moment, with the purchase of remaining participations in assets like the ones I mentioned, we would go lower than 10%, if we look at 2024 forward.
The next question is from Caio Moscardini from Santander.
If I can ask a question about working capital, I would like to understand more how -- the working capital on the bridge, which you commented on, since you had a better working capital flow in the second semester -- in the second quarter. If you could break that down between receivables or [ stock ] in -- that would be very helpful [indiscernible] a little bit more on the seasonality of that since our quarter is very short.
Caio, the seasonality of working capital is more favorable in the third and fourth quarters because of the average time to receivables. Because if we look at the base of payers, since we have relevant exposure for payers that many times are connected [indiscernible] these are connected to federal civil servants or state civil servants. This kind of payer -- and in many cases, it operates in a dynamic that is very connected to receiving the resources and adaptation of the budget, which also happens in the second quarter. So this will perform better in the second semester of the year because of that. And this ends up favoring the average deadline of receivables or -- in the second semester of the year; above all, on the fourth quarter.
Okay, so the first quarter has better seasonality than the third quarter.
Yes. Historically it's our best quarter [ in terms of receivables ]. It's the fourth quarter.
We close at this moment the questions-and-answers session. Now I would like to pass the floor to Dr. Bruno Ferrari for his final considerations. Please, Dr. Bruno, go ahead.
Once again, I would like to thank everyone for their presence in our conference call and for all of the questions. With that, we end our earnings call. And we are continuing to be available to you. Thank you. And great afternoon.
Our Oncoclínicas audio conference is finished. Thank you for everyone's participation. Have a great afternoon. And thank you for using Chorus Call.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]