Hapvida, one of Brazil’s biggest private health insurers, had the worst weekly performance on the Ibovespa stock exchange, falling more than 40 percent since Monday’s opening bell. The sharp drop came after the company released its Q4 results, which showed that the health insurance giant’s stock is no longer an investor favorite. At least not for now.
Remember. As we showed you in our Brazil Daily Newsletter, Hapvida reported an adjusted net income of BRL 161.4 million (USD 31.1 million) last quarter, a staggering 56.1 percent drop from the same period a year earlier.
Why it matters. Not only is Hapvida one of the most important companies in the sector, with the second largest market share (19 percent), but most of the problems it has faced in recent months are shared by other HMOs, which are also in delicate economic situations.
What’s wrong? “In Q4, we saw a slowdown in the pace of cost increases, but they remain high, both due to pass-through to consumers in our own network and a greater volume of high-cost therapies and procedures in the outsourced network, which has grabbed our attention,” said Hapvida’s CEO Jorge Pinheiro in a call with...
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