The billionaire family behind Brazilian health-care provider Hapvida Participacoes e Investimentos SA took a more than $730 million hit Wednesday as shares tumbled following a dire earnings report.
(Bloomberg) — The billionaire family behind Brazilian health-care provider Hapvida Participacoes e Investimentos SA took a more than $730 million hit Wednesday as shares tumbled following a dire earnings report.
The Koren de Lima family, which created Hapvida four decades ago and owns a combined stake of about 36%, saw the value of its holdings fall by 3.8 billion reais ($733 million) to 7.8 billion reais, according to calculations based on regulatory filings. At a peak last year, the stake was worth 32.8 billion reais.
Shares of Hapvida closed 33% lower to 3.02 reais in Sao Paulo Wednesday — the biggest single day drop and lowest closing price on record — after the Fortaleza, Ceara-based company posted weaker-than-expected fourth-quarter results.
The firm’s cash medical-loss ratio, a key metric of medical expenses that’s closely watched by investors, came in higher than anticipated, prompting Credit Suisse Group AG to ditch its buy-equivalent rating and highlight growing uncertainties.
Hapvida didn’t immediately respond to a request for comment.
Hapvida was founded by Candido Pinheiro Koren de Lima in 1979, when the Brazilian oncologist inaugurated a clinic in Fortaleza in the country’s northeast. It recently gained market share in Brazil by offering insurance and through its network of hospitals. Two years ago, the company acquired rival Intermedica.
Candido is chairman of the firm while his son, Jorge Fontoura Pinheiro Koren de Lima, is chief executive officer and also sits on the board with his brother, Candido Jr.
Long-time backers including Brazilian equity fund manager Dynamo started unloading their holdings in the past quarters amid fiercer competition and signs of a slower improvement in costs.
“Investors won’t turn a blind eye to recent disappointing results, meaning the lack of confidence in the investment case will likely persist in the coming months,” Banco BTG Pactual SA analysts led by Samuel Alves wrote in a note.
–With assistance from Felipe Marques and Raphael Almeida Dos Santos.
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