Hapvida has corrected its accounting practices from 2016 to 2023, which positively impacted its 2024 net equity by 503 million reais under CPC 50 standards, though it decreased by 202 million reais under CPC 11. The firm also renegotiated debts amounting to 2.9 billion reais for 1.7 billion reais, leading to a net impact of 470 million reais, while posting a fourth-quarter adjusted net profit of 514.7 million reais, exceeding analyst expectations.
Hapvida, a Brazilian healthcare operator, disclosed on Wednesday that it has rectified its accounting practices for the period from 2016 to 2023. This adjustment resulted in an enhancement of its net equity for 2024 by 503 million reais (approximately $89 million) when utilizing CPC 50 accounting standards. However, the corrections led to a reduction of 202 million reais in net equity, when assessed under CPC 11 standards, as indicated in a securities filing.
The accounting corrections implemented by Hapvida encompass write-offs of deferred tax liabilities, judicial deposits, adjustments in asset valuations, and the acknowledgment of deferred revenue from insurance contracts. These adjustments reflect the firm’s commitment to ensure compliance with the relevant accounting standards and enhance its financial reporting accuracy.
In addition to the accounting changes, Hapvida announced its participation in a debt renegotiation program initiated in December. This program pertains to penalties imposed by the regulatory agency ANS and payable reimbursements to Brazil’s public health system. As a result of the renegotiation, Hapvida settled liabilities amounting to 2.9 billion reais for a reduced sum of 1.7 billion reais.
The company’s proactive measures in revising its debt obligations contributed to a net positive impact of 470 million reais on its financial results. Moreover, in its recent report, Hapvida announced a fourth-quarter adjusted net profit of 514.7 million reais, surpassing the expectations of analysts surveyed by LSEG.
Hapvida’s rectification of its accounting methods from 2016 to 2023 demonstrates a significant commitment to financial transparency, resulting in an increase in net equity under CPC 50 standards. The successful renegotiation of its debt further alleviates financial burdens, underscoring the company’s strategic financial management. Overall, Hapvida’s recent financial performance reflects positively against market expectations and sets a solid foundation for future growth.
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