Hapvida corrected its accounting methods for 2016-2023, increasing net equity by 503 million reais under CPC 50, while decreasing it by 202 million reais under CPC 11. The firm renegotiated debt and reduced liabilities from 2.9 billion to 1.7 billion reais, impacting results positively by 470 million reais. Its adjusted profit for Q4 was 514.7 million reais, exceeding expectations.
Hapvida, a Brazilian healthcare provider, announced on Wednesday that it has made significant corrections to its accounting practices spanning from 2016 to 2023. This revision, based on CPC 50 accounting standards, has positively influenced the company’s net equity by 503 million reais (approximately $89 million). However, when applying CPC 11 accounting standards, the company experienced a decline in net equity by 202 million reais, as disclosed in a securities filing.
The adjustments encompass several elements such as write-offs of deferred tax liabilities, judicial deposits, enhancements in asset valuation, and the acknowledgment of deferred revenue from insurance contracts. Alongside these corrections, Hapvida indicated its participation in a debt renegotiation program initiated in December. This program pertains to fines imposed by the regulator ANS and reimbursements owed to Brazil’s public health system, resulting in the settlement of liabilities totaling 2.9 billion reais for a reduced amount of 1.7 billion reais.
This strategic maneuver is expected to yield a net impact of 470 million reais on Hapvida’s financial results. Furthermore, the company released its fourth-quarter earnings report, indicating an adjusted net profit of 514.7 million reais, which surpassed analyst expectations as surveyed by LSEG.
In summary, Hapvida’s recent accounting revisions have led to a positive adjustment in net equity under CPC 50 standards, although these corrections also resulted in a negative impact under CPC 11 standards. The company has simultaneously engaged in a significant debt restructuring that reduces its liabilities while enhancing its financial outlook, as reflected in its favorable quarterly earnings.
Original Source: www.tradingview.com
