By Brazil Stock Guide — Rede D’Or (B3: RDOR3), Brazil’s largest private hospital operator, reported an 11.1% decline in third-quarter 2026 net income to R$1.37 billion ($267 million), despite stronger hospital revenues and improving operating performance at its insurance subsidiary SulAmérica, according to results released on Thursday (November 12).
The decline was partly driven by IFRS 17, the international accounting standard governing insurance contracts. Excluding its effects, net income was virtually unchanged at R$1.45 billion, compared with R$1.46 billion a year earlier. The accounting adjustment reduced earnings by R$87.5 million this quarter, reversing a positive contribution of R$82.3 million in the third quarter of 2025.
Consolidated EBITDA rose 6.4% year-on-year to R$3.07 billion. On a management-adjusted basis, which includes investment income from assets backing SulAmérica’s insurance liabilities and excludes nonrecurring items, EBITDA increased 11.6% to R$3.6 billion. Consolidated gross revenue, before IFRS 17 adjustments, rose 6.2% to R$16.57 billion.
In the hospital and oncology division, gross revenue increased 10.1% to R$10.34 billion, outpacing a 6.7% rise in hospital operating costs. As a result, the division’s gross margin widened by 2.3 percentage points to 28%. Oncology revenue jumped 18.2% to R$1.25 billion, accounting for 12.1% of the segment’s gross revenue.
Hospital revenue grew despite a 0.9% decline in patient-days to 776,500. The occupancy rate fell by two percentage points from a year earlier to 79.6%. Surgical procedures, however, increased 4% to 163,200, while average revenue per patient-day, measured over the trailing 12 months, rose 10.5%, reflecting contractual price adjustments and changes in the mix of services provided.
Despite the improvement in gross profitability, the hospital division’s reported EBITDA margin narrowed to 26.6% from 28% a year earlier. Rede D’Or attributed part of the decline to a favorable comparison base in 2025, when earnings benefited from reversals of tax-related provisions. Excluding nonrecurring effects, adjusted EBITDA for the division grew 14.4%, with the adjusted margin reaching 27%.
At SulAmérica, the consolidated loss ratio — the proportion of insurance premiums consumed by claims — improved to 77.7% from 80.1% a year earlier, indicating better underwriting performance. The insurer ended September with 6.2 million health and dental insurance members, up 8.9% year-on-year. Adjusted EBITDA increased 5.7% to R$1.08 billion, although general and administrative expenses rose 21.7% to R$642.4 million.
The group’s net financial expense, under its management reporting framework, widened to R$715.9 million from R$524.2 million a year earlier, reflecting higher interest costs and the effects of foreign-exchange movements and mark-to-market adjustments on financial instruments. Gross debt reached R$49.64 billion at the end of September, up 17.4% year-on-year, while net debt increased 31.2% to R$22.27 billion.
Despite the annual increase in debt, the net debt-to-EBITDA ratio improved to 1.65 times from 1.71 times in the second quarter. Management-reported operating cash generation reached R$2.8 billion in the quarter, up 19.2% year-on-year. Rede D’Or is also pursuing an expansion program involving 2,690 additional hospital beds between 2026 and 2028, through a combination of new facilities and capacity increases at existing hospitals.
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