Rede D'Or Sao Luiz SA
BOVESPA:RDOR3
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Rede D'Or Sao Luiz SA
Earnings Call Analysis
Q3-2024 Analysis
Rede D'Or Sao Luiz SA
In the third quarter of 2024, Rede D'Or reported net revenues of BRL 14.1 billion, marking a significant year-on-year growth of 9.1%. This increase can be attributed not only to higher operational efficiency but also to the occupancy rate stabilizing at 78%. Importantly, the company has added 230 operational beds since last year, contributing to an overall growth in healthcare capacity. New expansions include an additional 150 operational beds recently opened, taking the total to 380, with further growth expected with new hospital launches in Macae and the Alianca Hospital tower in November.
Adjusted EBITDA for the third quarter reached BRL 2.4 billion, equivalent to a solid EBITDA margin of 29.9%. Year-to-date, this brings the total EBITDA for 2024 to BRL 6.4 billion, emphasizing effective cost management and operational scale. Notably, the net revenue growth for the first nine months of 2024 was a remarkable 103%, surpassing initial market expectations that pegged revenues at BRL 2.9 billion for the year.
Although total costs for the third quarter came in at BRL 5.4 billion—a year-on-year increase of 10%—strategic management has ensured that revenue growth outpaced cost growth. The gross margin expanded from 23.6% to 24.5%. Furthermore, general administrative expenses accounted for 3.9% of the company's revenue, showcasing a focused approach toward maintaining operational efficiency.
In terms of financial leverage, Rede D'Or has demonstrated solid management of its balance sheet, with net debt decreasing from 2.1x to 1.9x. The company reported a healthy cash balance of BRL 37 million, with cash technical reserves of BRL 19 billion. These metrics highlight a commitment to financial health and strategic active cash flow management which allows the company to pursue growth opportunities proactively.
SulAmerica reported net revenues of BRL 7.6 billion, reflecting nearly a 2% growth compared to the previous year. The consolidated loss ratio improved to 82.1%, marking a reduction of both 1.5 percentage points quarter-on-quarter and 4 percentage points year-on-year. The number of beneficiaries in the healthcare sector came in at 5.17 million, up 4.6% year-on-year. This suggests a recovering trend and effective control of claims.
Looking ahead to 2025, Rede D'Or has reaffirmed its commitment to continued expansions and operational enhancements. Specifically, the upcoming launch of the new Alianca tower and continued growth at Macae Hospital is anticipated to contribute significantly to revenue. Moreover, the company's focus on complex surgeries aligns well with its strategic direction and is expected to further enhance operational performance.
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Welcome to the earnings call of the Third Quarter of 2024 by Rede D'Or. We have here with us today, Mr. Paulo Moll, President; Rodrigo Gavina, CEO of Hospitals; Otavio Lazcano, VP of Finance and IR; and Raquel Reis, CEO of Healthcare and Dental of SulAmerica. The event shall last for 1 hour, and the recording will be available at the IR website of the company. After the initial presentation, we will start with a Q&A session. [Operator Instructions].
Before we will continue, we would like to clarify that any forward-looking statements that are done, during this earnings call, regarding the business perspectives of Rede D'Or projections, operational goals are based on the beliefs and premises of the Board of Directors and based on information that is currently available. Forward-looking statements are not a guarantee of performance and they involve risk and uncertainties because they relate to events and circumstances that might or might not occur. Investors should understand that macroeconomic conditions, conditions of industry and other factors, operational factors might affect the performance, future performance of the company and might lead to results that materially differ from the forward-looking statements.
Now I give the -- like to give the floor to Paulo Moll. He will start the earnings call. Please, the floor is yours.
Thank you. Good morning, everyone. So we would like to highlight that our net revenue in the third quarter got to BRL 14.1 billion, which is a [ 9.1% ] growth year-on-year with an occupancy rate of 78% aligned with the third quarter.
I also wanted to talk about the operational beds. We have had a growth of 230 beds year-on-year, it's aligned with the accumulated growth in the year. We had a reduction in regards to the second quarter of 61 beds. This is due to an occupancy that is lower. We had signaled that in the second quarter, we had record occupancy, but also a few specific adjustments in our Hospitals in Macae and Olinda, where we had some decrediting that had an impact. Now the accreditation had an impact.
From until yesterday, we opened another 150 operational beds due to our recent expansions and now we have 380 operational beds and growth, and we still have Macae, which we launched formally on Friday and the beds are still operational, and we have the new tower of the Alianca Hospital that should be launched in November. The average ticket is growing healthily 8.8%. Year-on-year, we had an EBITDA consolidated of BRL 2.5 billion, adjusted where we are bringing the financial revenues of the reserves of BRL 2.7 billion which is a growth of 26.2% year-on-year, the net revenue of BRL 1.2 billion, which remains a growth of 60% year-on-year.
When we talk about the 9 months accumulated in 2024, we have a growth of 103% of the net revenue, BRL 3.1 billion. Remember that the market consensus for the net revenue for the company in 2024 at the beginning of the year was around BRL 2.9 billion. So we managed to deliver more than that.
Well, still with the investments that are done this year and still with the payments of interest of our capital and repurchasing of shares, even though we deleveraged the company with the net debt drops from 2.1x to 1.9x. At SulAmerica, Raquel will get into the details, but these are results that are very positive.
The number of beneficiaries growing 4.6% on health care and dental year-on-year, getting to 5.2 million beneficiaries the loss of what we have 86 of losses in the third quarter. The administrative expenses, we are doing our homework we have a threshold -- 3.4% of the revenues, and this was above 7% when we took on the company.
Updating a few important projects, we just launched the three first greenfields of Atlantica D'Or in the last 30 days, Sao Luiz Guarulhos, Sao Luiz Alphaville. These two with a ramp-up that is very strong and still Macae D'Or, as I commented, well, the three units have a total bed of 623 beds, all of them have a condition of a second phase of expansion that we expect to execute over the next years.
I would like to highlight that we launched still in November, the new tower of the Alianca star in Salvador. And we are in the phase of the new Barra D'Or with the launch of the January. Also very important in Rio de Janeiro. We are very excited with the other greenfields and brownfields that we have the prediction for 2025. And most of them will be launched in 2025.
We're talking about expansions, which is Assuncao, Caxias D'Or, São Lucas, Ribeirao Preto as well will have an impact. Also, we had -- over the last weeks, we advanced in an important way with new registrations, new accreditation, the case of Memorial Star, we have the ramp up, good perspectives for Sao Luiz Campinas as we've done, this is going to be part of Atlantica D'Or, as we commented. So with that, we have organized ourselves to have a 2025 that is very positive.
I would like to bring your attention to the fact that we had great care in the cash flow management of the company. If you look at 2023, 2024, we differentiated ourselves in the results of the cash flow this gives consistency to our growth. It was always an obsession of our executive group to work in the cash generation. And I think that this is the way that we operate historically in the company.
We have the bonus and the financial objectives to the generation of cash flow, not only the economic results, this is fundamental so that we can take the right decisions. And we made as you've seen, many of these decisions, taking into consideration the economic results of the company, but also looking at the capacity of working with cash flow.
We foregone a lot of contracts to protect our operational cash flow that impacted '23 and '24 and volumes that we could have had, but we prefer to have a growth that is consistent. And I think that now taking a look at a larger number of quarters based on this work, we can see that we made the right decisions, and we are in the right direction.
I also have to mention our eNPS, well, still in evolution and high levels in comparison to the rest of the market, which gives sustainability to our company. And also, I would like to highlight our technical indicators that we orderly wanted to publish for the society. This is a good practice and transparency so that the patients and society can look -- can see the medicine that we are delivering, the safety of the patients. The clinical outcomes, this is a flag that we've raised that the market has followed on. And I think that it brings a differential so we can attract physicians and patients.
With that, I'd like to give the floor to Raquel, so she can continue with the presentation on SulAmerica. I will be here during the Q&A session.
Thank you, Paulo. Good morning. Talking about the main highlights of SulAmerica. Well, it was another positive quarter. The numbers show that we continue with a consistent trajectory of the recovery from the claims and the recovery of the beneficiary base.
So Paulo commented before, but in terms of profitability besides more efficacious control of the administrative expenses, we are closer to the records -- the threshold of claims this quarter, we have the dental improvement of 1.5% in regards to the second quarter of '24. So when we compare the third quarter on the consolidated loss ratio, more than 4 percentage points of improvement. So here, we have a trend that is observed of the improvement out throughout the year. This is due to a work that is extremely efficient in the management of health care of the beneficiaries, always looking at utilization that is conscientious and responsible of these services.
At the same time, we continue pursuing the reduction of the readjustments that are passed on to our clients looking at alternative the intelligence artifices such as the modulation of reimbursement and coparticipation added to a lower readjustment, it has a drop in the consolidated loss ratio of the claims and also greater possibility of access. We will continue to continue with this metric with the offering of products that are ever more modern and adequate for the needs of the market.
Just giving you a bit of a data for the modular reimbursement products, they continue with a strong growth. We have another 300,000 lives that are with the modular reimbursement that were launched in March and April in 2023. Looking at growth, another great highlight another period with the net addition of lives.
I will continue during the Q&A. I'll give the floor to Rodrigo Gavina.
Thank you, Raquel. Good morning, everyone. So let's talk about Page 6 on the volume of patients. To not be repetitive with what Paulo said, our volume of patients day was stable. It looks like what we had last year. As Paulo said in the last call, we -- our rate of occupancy in the second quarter was very much differentiated. It went back to the usual levels for the moment of the year. And we worked occupancy rate day so the number of patients stay, and the -- so we can keep the hospitals with an optimal occupation.
We -- if we compare the number of surgeries of this year and last year, there was a drop of 72%. But these are complex -- the complex surgeries came while they raised, they increased. There was a rearrangement so that the complex surgeries increased and they had an improvement of the ticket for us.
Page 7. We see, Paulo signal this that there was a number of total beds year-on-year that grew 8%, almost 900 beds due to the deliveries, but they metrified well the growth that we had in the second quarter up until now of 150 beds, a bit more than 150 operational beds.
Last but not least, talking about total beds with all these deliveries, we have 12,000 bed, which is an increasing number more than 10%, if you look at the previous quarter of last year. And several hospitals with ramp-ups -- well, they're doing well.
So this is the summary of our volume evolution, and I am here during the Q&A session. Otavio?
Once again, on Page 8, net revenue, average ticket for the hospital services. Now looking at the graph on the left. The company reported the revenue of BRL 8 billion for the third quarter of '24, there is a growth of 2.3%. In a comparison of the previous quarter, the increase of the ticket of [ 8.9% ], a reduction of the number of patients stay [ plus 6%]. When we annually compare the growth of 9.6%, the result of an increase of the average ticket of 8.8% and an increase in the number of patient days from to 0.7. At the center of the page, the company reported for the first 9 months of this FY, the net revenue of BRL 23 billion, BRL 388 million, a growth of 9.3%. The result of an increased average ticket of 5.8% and a number of growth of patients of 3.3%.
And on your right, you can see graphically the evolution of the average ticket quarterly in the segment of the business of the company.
So now going to Page 9. The gross revenue and average ticket on Oncology. On your left, the company reported a gross revenue of BRL 800 -- BRL 823 million in the third quarter of '24 with a growth of 3.1% in the quarterly comparison, the increase in the average ticket of 3.1% and stability in a number of fusion with the annual growth of 17%, the increase of the average ticket and the average ticket was increased 12%. At the center of the page, the net revenue accumulated 9 months of BRL 2.360 billion, a growth of 17.2% when compared with the same period of the FY, previous FY. Result of the average ticket and an increase on the infusions. In the same way, the previous page, we on the right, present the evolution of the quarterly ticket.
On Page 10, the recent expenses. And we started with a graph. On the left, we have the total cost of BRL 5.4 billion for 2024, a growth of 4.3% in the quarterly comparison, growth of 10% when we annually compare. In the center of the page, the company reported the accumulated total cost of BRL 15.6 billion, a growth of 7.7%. When comparing to the same period of the previous fiscal year. This is a growth that is less than the revenue in this window, which allowed for the expansion of the gross margin of the company from BRL 25 billion, a growth of 13.1% and an expansion of gross margin of 23.6% to 24.5%.
On the right, the company reported. The general and administrative expense of you can see a growth of 2.4% facing the previous quarter. Equivalent to 3.8% of the gross revenue of the company. Graphically, we represented with the adjustments to have several elements, positive nonrecurrent so we can have a fair comparison quarter-on-quarter.
On your right, the company reported the expenses, general administrative expenses of BRL 856 million, 3.9% of the revenue. Once again, the comparison, which is not fair. If we don't take into consideration the adjustments that are necessary for the positive runoff. Here, the reversal of PIS COFINS over the financial revenue of BRL 3.4 billion. If we do an adjustment, it's a growth of 6.6%, 9 months of '23 with 9 months of '24, very much aligned with the annual inflation.
So now going to Page 11. EBITDA and net revenue. Now we have the segments of hospital services. The company reported an EBITDA of BRL 2.140 billion in the third quarter of '24, a growth of 16.2% when you compare it quarter-on-quarter growth of 16.2% annually, margin EBITDA of 29.9%.
Turning on the page, the company reported for the 9 months of '24 an EBITDA of BRL 5.6 billion, a margin EBITDA of 7.1%. The net income before taxes of the third quarter was [ BRL 2.600 ] billion. We had the financial results -- the expenses of BRL 391 million, higher CSL of BRL 400 million. And in that sense, we reported the adjusted net income for the third quarter of BRL 1.250 billion or BRL [ 1.268 ] billion, respectively. 9 months of '24 in net revenue and an adjusted net revenue of BRL 3.56 billion or BRL 3.2 billion, respectively. Once again, the adjustments are related to the amortization in the acquisitions of SulAmerica in the moment of incorporation of SulAmerica to Rede D'Or at the end of 2024.
Now Page 2 -- Page 12, we can see the net revenue in SulAmerica, BRL 7.6 billion in the third quarter of '24 growth of almost 2% in the annual comparison. And now on the consolidated loss ratio, we have 82.1% in the third quarter of '24, a drop of 1.5 percentage points in the comparison quarterly, a drop of 4 percentage points in the annual comparison. Still on the right, but in the lower part of the page, the company reported the number of beneficiaries of dental 5,174,000 a growth of 1.8% in the quarterly comparison of growth of 4.6% in the comparison annual comparison.
At the end, on the left, the company reported the adjusted EBITDA of BRL 610 million for 2024, a growth of 80%.
In consolidated terms, the EBITDA of the company was BRL 2.400 billion for the quarter, accumulative in 9 months, BRL 6.400 billion.
Page 13, debt profile, starting with the information on your left. In September 30, the company reported a cash position equivalent of almost BRL 37 million, cash of technical reserves of BRL 19 million -- BRL 19 billion. And in the center of the page, we can see the evolution of the average cost of debt and the evolution of the cost of capital of third parties of the company; and on the right, the debt amortization schedule of the company.
Last page, Page 14. Managerial cash flow. We start on the left, the reconciliation of the EBITDA with the variation of the cash in 9 months. Starting on the left, the contrary EBITDA that is accumulated in 9 months BRL 6.483 billion. Moving to the right, we have a variation that is positive of capital, working capital of BRL 1.8 billion. Another step to the right, we have other balance sheet items that are BRL 261 million. Thereafter, the payment of rents leasing, BRL 538 million, and taxes, BRL 891 million, financial activities, cash flow captures, amortization, financial expenses, negative BRL 1.9 million -- billion, sorry. The cash flow of investments, BRL 1.1 billion, and then we get to the cash variation that is positive accumulated in 9 months of BRL 3.531 billion. And on the right, we have graphically the evolution of the average days receivables, days inventory outstanding and the days payable outstanding of Hospital Services.
I finish the presentation, and I open the space for Q&A.
Thank you. We will start now the Q&A session for investors and analysts. [Operator Instructions] First question from Mr. Felipe Amancio, Itau BBA.
I have two. First, SulAmerica, we've seen that the result is very strong even without the seasonality, which is very evident in the third quarter. You went over this presentation, but if you can explore a bit more on the main drivers of growth, do you still see a space for improvement in the claims.
And the second question is, well, you commented during the call during the -- about the ramp-up of a few hospitals in Campinas, for example. So if you had any updates on the development of the hospitals in Taubate and Ribeirao Preto that would be great. And do you foresee spaces for new greenfields in the partnership? Thank you.
Felipe, I will start asking -- while answering the first, then I give the floor to Raquel. We are very happy with the ramp-up of the new units, as I told you, we started with Guarulhos, Alphaville. Guarulhos we launched, it's been a month. And these -- the hospital already has all beds and the expansion of these beds. Alphaville is doing very well and 15 days after Guarulhos. So we got to over 40 patients admitted the emergency volume of these two hospitals also very strong.
Now about the units, we started the Ribeirao Preto, the works and in Taubate, we are finalizing a few adjustments where we're going to start the works briefly. About new units that can be added to Atlantica D'Or. I think that this is a recurring question, but there is no exclusiveness between the groups. But obviously, we're always going to analyze good opportunities, opportunities that make sense that we develop together. We're going to develop them and communicate them at the right time for the market.
So now I'll give the floor to Raquel.
Thank you for the question. Well, little by little, we observe in a general way, an approximation of the thresholds of claims, well, taking into consideration the seasonality that is in the pre-pandemic. So still, it doesn't fit very well, but we see the quarters getting closer to the seasonality -- the previous seasonality. Well, the improvement in the seasonality, I would like to remember that we have a big ship, transatlantic ship.
So to present a strategy, it takes 12 months to get the strategy implemented because it depends on the contracts and their deadlines. So there's nothing different, except what we have set of pricing that is more conscientious, more sustainable and using tools that make these products profitable and sustainable for everyone for the beneficiary or the contracting party and the operator.
Well, an interesting data besides the modular products that have won a strong commitment. Well, it's the coparticipation. So you've heard me talk about that for many, many years. And those with coparticipation and relevant coparticipation, more than 90% of the sales of the entrepreneurial, but the PME, the 3 years ago, we didn't have any selling with the coparticipation. Now represents 40% of everything that we sell with coparticipation.
In adherence, that corresponds to 100% with participation and modular products. So the -- what we're -- what we're getting in terms of patients with clients are consistent. We are -- this is what we're pursuing to improve the claims every day but without forgetting the growth of the base.
Next question comes from Mr. Leandro Bastos from Citibank. Mr. Leandro.
Good morning, everyone. Thank you for the question. Two. Regarding the ticket of the hospitals, there was a strong evolution. If you can comment on what was made in terms of complexity, more complex surgeries. What was done in terms of readjustment, there is a concentration in this quarter?
And the second one, if you can talk about the evolution of operational beds until the first quarter of the month, if you can give us some color on the contribution of the projects. What can -- what has been done in terms of seasonality or other contributions for the projects, that's going to help us with the modeling?
Well, starting with the ticket, you have three effects here within this ticket. You have the readjustments, as you commented, you have a part that is the mix of cases, we are making more complex surgeries than what we've done. And also if you have a lower occupancy comparison to the previous quarter, the previous quarter, we had the effect of the admins with a lower ticket.
Now the concern is lower than the previous, but with more complex patients. But in the end, you have a mix due to some deaccreditation. So when we decrease the participation of our hospital of Macae and our hospital of Olinda within the whole these are hospitals that have tickets that are lower than the average ticket of the company. That has an impact which is the impact of this mix.
So the effect of this ticket is a combined effect of these three factors. Talking about the operational beds, we published and I discussed this initially 30 -- September 30 until yesterday, we added another 150 operational beds. Naturally, most of these beds are -- additional beds are in Guarulhos, Sao Luiz Guarulhos, and some base in Alphaville. And as I mentioned, in the case of Guarulhos, this has a high occupancy, and we are in the phase of expansion to more beds, and we have an expectation of growth within the year of our infrastructure Macae that is getting an operation briefly and there the new building of Alianca Star that is getting into an evaluation at the end of November. All of that should contribute so that we continue to have a good ramp-up of operational beds, so we can start 2025 with a growth that is already important for the company.
Our next question comes from Mr. Samuel Alves from BTG Pactual.
Two questions on our side. Well, I think that it can be directed to Paulo and specifically to the results. I wanted to get more information about the relevant fact, including Sao Luiz Campinas within Atlantica D'Or, it's more to understand within this agreement was there any condition in the sense of new accreditations even in the initial speech of Paulo well, new accreditations of new paying parties in Sao Luiz Campinas, and if you can give us some color, these are the -- this is the first question.
The second question is not so much related to the result. But if you can -- it's more related to the new resolution of [ ANS ] in regards to guaranteeing assets that can be utilized for the coverage of technical provisions with the publication of October. I wanted to know if you foresee and can you anticipate the amount that will be worked out in the company, I think that have you done any internal math, any internal studies?
Hello, Samuel. Well, talking about Campinas, these are not connected subjects because even though they are part of the same economic group, these are different companies. So our conversation about investment of Atlantica in Campinas and this hospital is part of Atlantica D'Or doesn't have any connection to the conversations of accreditations.
I wanted to give you the other news, there are some accreditations that we're looking such as Memorial Star and obviously, the guarantee that we have with the accreditations of the new Barra D'Or which is a transference of operations, but they go through new contracts. The expansion within Alianca, we have the entirety of the group of operators that we service already. All of those are important evolutions that we've had over the last weeks and months. So I wanted to give you that news. But it doesn't have any connection with the other fact, which is the investment of Atlantica D'Or starting to be subject to approval of the regulators once is approved. We're going to be ones of the asset in Campinas.
I'll give the floor to Otavio.
Somewhat today, we don't use any real estate to in terms of guaranteeing assets. As you know, we have the incorporation of SulAmerica by Rede D'Or as a possibility and the utilization of this mechanism to have more liquidity, financial liquidity within Rede D'Or we thought up this possibility and at the right time, we might make that decision. But I think it's important to highlight that the company has a lot of capital. We're doing well less capital. We have a solid cash position that allows us to do our investments, those that are under execution and other in the future, it allows us to finance the working capital and the daily growth of the company, pay back to shareholders and face our financial obligations. So we don't have an urgency. No urgency to increase the financial flexibility of the company.
But yes, this is -- this is an option. We see the framework. We haven't used real estate to facing the obligation. But when adequate, it can be taken into consideration.
Next question comes from Mr. Gustavo Miele from Goldman Sachs.
I also wanted to ask two questions. First, during a follow-up on the comment of Otavio regarding the financial flexibility of the company. I wanted to understand what are the capital allocation priorities of the group looking at 2025 with a scenario that is going to be more challenging. We see -- we follow up with great flexibility. So I wanted to understand if you're starting to see any opportunities in the M&A process that is interesting or maybe accelerating the distribution of dividends since the company can pay an interest of our capital that is robust. Would it be an interesting alternative? So it's just to get your idea in regards to the cost of capital, that would be the first question.
And the second more direct on complexity of the hospital segment, Gavina commented on of an increase of complex surgeries in the third quarter. I just wanted to understand if this is Basel gains or it has an impact on the backlog? We heard from the sector when we have a typical frequency of the 2K -- 2Q, we have a delay. So we need to know if this is the case or it was something more perennial so we can do our modeling. Thank you very much.
Well, let's talk about the capital allocation. You know the numbers of the company, we've presented many times our returns of the several investments. So historically, we delivered 20% -- above 20% in our M&A is above 20% and more than that in brownfields.
So whenever we can add M&As, greenfield, brownfields projects with returns of this threshold with our records, then we will be happy in allocating our capital and publishing new projects. If eventually, because of the robust cash generation of the company, even though we had other projects, we are still bringing a level of deleveraging that is below the levels that we understand that are healthy, then we will eventually decide to do a larger distribution of dividends. But we would be very happy if we can continue to allocate a great deal of the additional capital that the company is generating in good projects that offer good rates of return for the companies -- for the company and shareholders.
In the case of complex surgeries, this is aligned to our strategy that we published to you. This is the integration work with our oncology hospital area. Oncologic surgery has been growing we have a value proposition good for the patient that we can -- for the patient with cancer offer a service for any of their needs whether if it's biopsy, chemotherapy. So that has worked very well that integration with the hospitals. And a series of other initiatives it's been on the media days ago that we have phenomenology and São Luiz Itaim led by Dr. [ Tim Achuka ]. Well, he's one of the biggest transplanter of lung from the world that came back from Florida to lead this project within Rede D'Or.
All of these actions and initiatives they bring more reference in complex surgeries, and we understand that this is where we have the biggest focus of work. There is a series of procedures even that some of our hospitals of high occupancy of the surgical theater when we can grow in the complex surgeries, then we decentivized the low complexity surgeries stereoscopy, small procedures, many times can be done in an ambulatory more efficient way. So the set of these actions that I am talking to you, will lead to this result and there are some structural actions that are mainly in the traction and growth of the complex surgeries.
Next question from Flavio Yoshida, Bank of America.
Well, I have two questions. The first one, I wanted to explore the margin of hospitals, we see a bit of a pressure when we compare it to the previous quarter that we understand that happened due to the delivery of new hospitals. You commented that you are very happy with the ramp-up that you're seeing. I just wanted to understand what should we expect in terms of the next quarters? Or what should we expect in regards to the maturation curve of the hospital of Atlantica D'Or? You always commented that the greenfield would take 2 years to mature. So how accelerated can be this maturation curve?
And my other doubt that I have in regards to Atlantica D'Or is there any type of sharing of [ DM ] the holding of Rede D'Or or with the JVs. For example, any type of expenses to the top management of Rede D'Or and Atlantica D'Or. Thank you.
Well, talking about greenfields, historically, we see -- this is what we, at the IPO time, we modeled by the analysts. We see an opening of 80 beds per year. So a hospital of 240 beds that would take 3 years to have them open. So what we see within Alphaville and Guarulhos is a rapid ramp-up of the building, and we hope that [indiscernible] is doing this, we see in this the volume, and we started with 55 beds in Guarulhos. In last than 1 month, we are doing the expansion of beds. So in fact, that modeling that we had historically, it starts to be accelerated because these are areas that it's a big population and a big need of having a reference hospital.
Macae, we hope that we can do this quicker than the records that were used at the time of the IPO by the records that were used by the analysts.
In the case of the other question about the D&A. We have with Atlantica D'Or, and we have with other units, hospital units where we have partners, is we do a corporate rating. We take all the corporate structure. We look at the percentage of revenue of the cost, and we allocated in such a way that this is very efficient. And this is for the -- the infrastructure of Rede D'Or, we have over 70 hospitals and it creates an operational facility so we don't replicate structures, and we don't -- and we can keep the synergies with our scale and our size.
Our next question comes from Mr. Mauricio Cepeda from Morgan Stanley.
Now I wanted to talk about the part of the insurance company of a few sectorial issues. The first one is in regards to the judicialization that we see in the sector, we see -- I know that it doesn't appear in your results in such an expressive way, in this quarter, but we see by the data of the regulator that the provisions and the judicial deposits have grown, specifically, they've grown at a very strong rate throughout time. So what would you expect in terms of prevention? Well, since more massive plans or the entry level for judicialization, you see the small medium-sized companies plans?
And can you give us a sectorial update to what the sector has done? And what do you think can work against this judicialization.
And the second one regarding the insurance companies are the next steps. Because, in fact, in the corporate because of the data of the regulator, the corporate seems to be very much balanced in terms of claims. So now it's a fact of organic growth. And how do you want to get to this organic growth, getting shares of whom? And how can Bradesco can fit here since there is a commercial presence of Bradesco that is more spread out than SulAmerica. Will Bradesco be a partner, commercial partner in where SulAmerica is less present?
Raquel here. Thank you for the questions. Well, in fact, judicialization in the sector of health care is judicialize. It's a contract that even though we have the coverage that is clear, invariably, we have requests that are not predicted and they are more expensive.
If you look at the tech evolution gene therapy, for example, that is coming up, more and more, we have judicialization that is growing in this sector and we're trying to bring the regulator, the pharmaceutical -- the Ministry of Health. They are -- it doesn't make sense that Brazil has the price of a medication that is higher than England, for example, that's a point that we are attacking and, of course, it has a reflection in the judicialization.
Another point that we can -- we have to consider is the fraud. You've seen, since the beginning of last year, with the work that we are finding, SulAmerica is getting hundreds of criminal and civil actions against beneficiaries and against a service provider that are fraudsters so we can more or like the practice.
Many times, unfortunately, we still see judicialization as a tool that these people use to get gains in regards to the health care contracts. So that is getting an effect when we -- when I came back to SulAmerica last year that Rede D'Or started, we found a percentage of the reimbursement of the total paid for claims that is very considerable in 14% and today, that is around 7.5%, 7.8%. So everything that was done thus far had an effect.
In the sense of avoiding that this will, well, to reduce the impact of judicialization here, Otavio mentioned that in December of '23, we've done a change in the provisions in a more conservative way but everything that we've done in terms of products without reimbursement, mainly along the ones that opened -- that bring judicialization, they have the potential for judicialization that is reduced in the future.
Next step, growth. I think that we addressed the strategy correctly. We are fulfilling the strategy last year was a year of cleaning up of a few portfolios that we're not presenting or we're not presenting profitability. We launched new lines, new products still for this year.
There are new products coming up, so we can more and more attack all the public and not just be restricted to the more obvious geographies but going to others. For example, we launched the product last month. So in regards to your questions on the competitors, and one of them is the one that you mentioned. I think that there is space for everyone in the market. And almost all of them follow without the competitors. So regardless of the type of association that we had here, Bradesco and SulAmerica, they continue to be competitors of the market, and we believe that there is space for both and a space of growth for both.
Our next question is from Joseph Giordano from JPMorgan.
Well, good morning, everyone. There are a few themes that were explored. We have -- we see a great evolution of ticket. And of course, there is the work of the company to increase the complexity, but I wanted to explore maybe on the size of the paying parties. You clean the contract that wouldn't be profitable. So I wanted to explore with you how is the dispersion when we look at these contractual renegotiations of the ticket? And how this -- this is allowing us to work with the receivables. Well, it's still very high. Do you see relief in the paying parties and maybe there would be a relief for the accounts receivable?
Now on the side of SulAmerica, we see the claims already stabilized with products -- with more participations. So I wanted to see -- how do you see the need of readjustment of these plans for the next 12 months? Well, do we see -- do you see low digits or high digits?
Well, let's continue. In the case of the ticket, we are aligned with our records. We always say that we do readjustments above inflation, but not a lot about the inflation, and we try to find a better mix of patients, more complexity, which is the important part of our strategy. Now within this recent quarter, there is an effect as well.
There is a marginal effect, but there is an effect of the exit of a few operators that are present in our hospitals that have a lower ticket than the average of the company. So that has an impact within the tickets. And always remember that we have to look at the seasonality of our tickets. So the third quarter, we have the seasonality here. We have a stronger ticket.
The part of accounts receivable we have a moment of accounts receivable that has an additional deadline with a big operator -- to big partners. We see -- we have the expectation of an improvement here. We keep the expectation of going up to the threshold of 2019, but we have an improvement expectation. We still have within our tickets, and this is the work that is strong that we've been doing, we are doing a reduction of exposure and many times the elimination of exposure to some paying parties that are facing financial problems that are larger with an operator that had a delinquency with us.
Now it's no longer a delay of extending another week or 10 days, it becomes a difficulty of keeping the payments, and we are doing the work of reduction or even elimination of relationship with this type of operator. I still have accounts receivable that I'm still dealing with these operators.
So there is the expectation that we can also improve our number of days in since my exposure to this type of payer is decreasing and therefore, I can bring the company to the lower number of days, but once again, were I foresee an opportunity so we can have improvements given the right moment of the sector and given all the actions of the sector. So we can -- over the next quarters, we can see a better evolution of the reduction of case.
Joseph, this is Raquel. Readjustments, so it might seem contradictory but we're always working to have the lowest readjustment possible. this for the small and medium-sized companies and the entrepreneurial portfolios. The lower variation is the best will be the potential for the sales and retention for the clients.
Looking at recent past, the variation of the small- and medium-sized companies, for 2024 versus 2023, there was a reduction of 5 percentage points. So I think that we can observe that this is very similar along all the portfolios.
So since we've been working the readjustments in a few percentage points, it's natural that we see in the future a reduction that is not necessarily in the same threshold, but we -- well, to give you a context of what we said at the beginning, to try and look for a readjustment, I'm going to give you a clear and real example.
The negotiation of readjustment on the -- of 10% for a client that doesn't have any coparticipation. If they do the allocation of coparticipation, pool and consultations and exams, and emergencies and you do with the maintenance of the product with our reimbursement or where a reduced reimbursement, I can do the reimbursement for consultations. But it doesn't make sense to do this for examples. We have a broad network of laboratory.
So there is a broad network, the potential for fraud. So if that happens in this negotiation, I can do the zero of the readjustment. So not necessarily we're pursuing the growth of ticket for any cost. And this has to be more sustainable. And we are always looking for the same cycle.
Next question from Mr. Caio Moscardini from Santander.
Good morning. I wanted to take -- get some color on Atlantica D'Or. Can you comment a bit more on the price of the hospitals that within the JV basis, the other ones on the basis? Well, here to confirm that the hospitals of JV should higher tickets versus the rest of the base?
And also I wanted to understand if Bradesco Saude has any type of benefit in terms of the tables of the JV. These are different companies. But just to get your opinion and also to understand if you expected the hospitals of JV have a higher or lower margin than the consolidated of the hospitals.
While the hospitals, they follow the commercial strategy of similar hospitals within the portfolio of Rede D'Or. So if it's Hospital Sao Luiz, he follows references from other Sao Luiz, whether if it's by SulAmerica or the negotiation with the other operators. Obviously, operators with a higher scale and higher volume without wanting to get into the details, usually, we have more competitive tables than the small operators. So I think that it's a position that continues the commercial strategy of the company and the preferences of the market.
Naturally, Sao Paulo has tickets, as everyone knows, higher than many regions of the country. And without trying to make it general eventually, we have hospitals outside of Sao Paulo that has tables due to its position that are compatible or even higher than the average of Sao Paulo. But in general, the tables of the hospitals of Sao Paulo, the tickets in Sao Paulo are higher than the rest of Brazil.
So it's a fact that when we are growing the participation of Hospital Sao Luiz within Sao Paulo, we have here hospitals that have a ticket positioning that is a bit higher than the average ticket of the company.
In regards to the margins, these are hospitals that we're going to ramp up, but we hope that once the ramp-up is done, they have comparable margins. And once again, to similar hospitals within the region of Sao Paulo that with this that these are hospitals that obviously have higher margins than the average margin of the company, and we are talking about hospitals with a higher ticket. And with a larger sized end, medium size of the assets of the company. So with the reduction of costs higher than the others. Did that answer your question?
Great Paulo. Thank you very much.
The Q&A session is closed. I would like to give the floor to Mr. Paulo Moll to close the session.
Thank you very much to everyone. We will see you briefly in the next call. Thank you very much.
The earnings call of Rede D'Or is closed. Thank you for your participation. Have a nice day.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]