Good morning, everyone. Welcome to the earnings call of the second quarter of 2023 of Rede D'Or. We have here with us Mr. Paulo Moll, CEO, Otávio Lazcano, VP Finance and IR, Rodrigo Gavina, VP of Operations, Leandro Reis, VP of Medical Area, Raquel Reis, CEO of Health and Dentistry of SulAmérica, and Marcelo Mello, Presidents of SulAmérica. We're gonna have one-hour event, and the recording will be available at the RI site. After the start, we're gonna start the Q&A, where we're gonna get more information. Before we continue, we would like to clarify that any forward-looking statements that might be made throughout this call regarding the business perspectives of Rede D'Or, projections, operational goals and financial goals, are based on beliefs and premises of the board of directors, as well as information that is currently available. Any forward-looking statements are not a guarantee of performance.
We have risks and uncertainties because these are referring to events and circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions, and other operational factors might affect the future performance of the company and might lead to results that are materially different from the forward-looking statements. I would like to give the floor to Mr. Paulo Moll. He will start. Please, the floor is yours.
Good morning, everyone. I'm going to start with our operational highlights. The consolidated, the gross income in the second quarter of 2023, BRL $12.4 billion. This is a growth of 13.5% in regards to 2023. The EBITDA, BRL $1.615 billion, 20% higher than the 1Q 2023. This is better efficiency.
Well, the net income, BRL 435.4 million, 43.3% higher growth in regards to the first quarter of 2023. The adjusted net income, I would like to highlight that it's BRL 489 million, due to two adjustments: amortization, accounting of the portfolios that were taken with the M&A of SulAmérica, that do not have a cash effect, and also some non-recurring expenses that we cut because we optimized. Great indicators, therefore, we are living in still with the high interest rates, and also we have, well, at SulAmérica, the delinquency controlled.
Well, in the second quarter, we have the BRL 7.2 billion, so a growth of 10% in regards to the second quarter of 2022, a growth of 5% in regards to the first quarter of 2023. The ticket in the second quarter of 2023 is growing 7.5% in regards to the second quarter of 2022, due to our readjustments and also the mix and complexity. Quarter-on-quarter, we have a reduction in the ticket of 3.3%. This is a non-recurring effect, analyzed well in the first quarter of 2023, in specific special materials. Without, without that impact, we would have a drop just of 1.5% due to the mix that is different. Well, this doesn't change our general overview of growth of tickets, and we understand that this is the correct math.
Quarter-on-quarter, we have the seasonality to be taken into consideration in this comparison. Therefore, we should see our ticket growing above inflation, which is due to the readjustments that are coming in the middle of the year, all based on the inflation. As you know, we have a big set of readjustments that are for July and August. Occupancy, 33%, very strong, even though we are considering the second quarter 0.4% in regards to the second quarter of 2022. Record number of patients stay, 725,000, and we have new operational beds, 184 of these. Well, more in the second quarter. We would like to say that we launched the Somos Campinas Hospital at the end of May.
We managed to have the registration with most of the big healthcare operators, and we are on track to reach the break-even in the six months of working aligned with our greenfields that were successful. Gross margin. We got 23.8%, a margin that is higher than the 1Q 2023, and a slight growth in regards to the 2Q 2023, which was 23.7%. The administrative expenses is 3% of the gross revenue, against 3.2% in the 1Q 2023. EBITDA, BRL 1.6 billion, growth of 12% in regards to the 2Q 2022, and a growth of 11% in regards to the 1Q 2023.
A margin of EBITDA of 25.2%, higher than the 24% that we presented in the 2Q2022. We still see that we can continue to evolve in our margins, improving our, our best standards of margins that were already delivered. At SulAmérica, we would like to highlight the growth that we had, very important in the beneficiary base, 6.2% in health and dentistry, comparing to the 2Q2022, therefore reaching over 5 million lives. We have a growth in the net revenue above 18%, also comparing with the 2Q2022. Well, the consolidated delinquency, 23.3%. There is a drop of 2.1% in regards to the 88.2% that we had in. Well, the loss ratio, I apologize.
Comparing to the first quarter of 2023, when we had 38.2%. Let's just look at healthcare and dentistry. We have a drop. We still see a lot of pressures. We're talking about 87.2%, but with an improvement of 2 percentage points when you compare it to the last quarter, or the first quarter of this year, we're talking still about the loss ratio. Administrative expenses, a very strong effort on synergies and optimization of the structures. We managed to reduce to 6.1% of the net revenue. This is 1.5 percentage points below of the 2022 comparison, but we can decrease this line. We have synergies that are already undergoing, and most of them are incorporated in this number. A great deal will be incorporated in the next few months.
We have a total of $520 million of synergies, a great deal in the administrative areas, some in, a bit in materials and medications, that will reflect in the reduction of the loss ratio. Within this number, of course, we don't have synergies in the part of revenues between the companies. Well, the floor will be Otávio Lazcano. He will continue with the presentation.
Thank you. Hi, Paulo Moll. Thank you once again. Page five. Let's start with the graph on your left. As Paulo Moll has mentioned, the average occupancy, 83% in the second quarter of 2023, completely aligned. A historical record for the company for the second quarter.
We reported 725,000 patients per day, patient day, this is a growth of 8.6% if you compare it to the previous quarter, a growth of 2.5% year-on-year. Graph to your right. We also reported the evolution of the total number of surgeries, 125,000, a growth in the quarter analysis, where the previous one, a growth of 5.4% year-on-year. The big surgeries have a growth of 8% if you compare it to the previous quarters, a growth of 6.8% year-on-year. Another historical series. Next page. Page six. We can see the graph on your left.
9,646 operational beds in the 2Q 2023, a growth of 138, 34 lay, beds, and a growth of 208 beds year-on-year. On your right, we have the reported 11,512 beds, total beds, in the 2Q 2023. Stability facing the previous quarter, growth of 46% if you compare it to 2020. Biggest highlight, the launch inauguration of Hospital São Luiz Campinas. Next page, seven. Gross revenue and average ticket. In the hospital services, let's start to the left. Well, the company reported the gross revenues in that segment of R$7.2 billion reais, almost, in the 2Q 2023, a growth of 5%.
Facing, in comparison to the previous quarter, a result, while we, i t increases the number of patient days, a growth of 8% and a drop of in the average ticket that we already mentioned. If we do the adjustment on the last, as Paulo has commented, there would be a decrease of 1.5% with our PME, and every single analysis of the evolution of the average ticket that is done quarter-on-quarter has to be done with care because of seasonal factors, you know, the variation of complexity indices and other factors. In the analyzed analysis, the revenue for the second quarter of 2023 has a growth of 10.2%. The result of an increase of patient days, and then an average increase of the ticket of over 7%.
In six months, the company reported over BRL 14 billion in gross revenue in that segment, a growth of 12.3%. The result, which is the growth in the patient, in the number of patients, of 3%, and also the growth of the average ticket of 9%. We realized all throughout this quarter that there is stability, the indicators for the complexity. And I would like to say, the percentage of the gross revenue, ICU, they represented 30%, a few percentage points than the previous quarter, so completely aligned with what was the second quarter of 2022. We talk about surgeries, which is 20% of the gross revenue. Well, we can see the same indicator verified with the previous quarter, one percentage point, with what year, what is year-on-year. Next page.
Page eight, gross revenue and average ticket for the segment of oncology. Once again, let's start to the left. Company reported the gross revenue of BRL 665 million, a growth of 1.5%, facing the first quarter of 2023, a result in the increase of the average ticket of 1.9% and the stability in the number of infusions. In the annualized analysis, growth year-on-year, 13.6%. This is the result of the average ticket of 16% growth, a small decrease in the number of infusions, -2%.
In six months, the gross revenue of that segment was higher than 1.3% BRL 1.3 billion, a growth of 21%, which is the increase of the value of the ticket, and the increase of the number of infusions. Now, page nine, cost and expenses. In the cost with hospital services, let's start to the left. Company reported the costs of about BRL 4.9 billion in the second quarter of 2023, a growth of 3.4% if you compare it to the previously, the previous quarter. Annualized comparison, growth 10.3%. If you adjust it by the effect of the portfolios of SulAmérica, the valuation with the incorporation at Rede D'Or, that growth would have been 8.7%.
In six months, the total cost of the cost and expenses total is a total of BRL 9.6 billion, a growth of 10.4%. In the same way, adjusted by the effect and the amortization of the portfolios, if we would have done that, we would have had just a growth of 8%. The revenue grows in any of the analysis faster than the cost, so we expanded the margin, the margin of the company, therefore, to 2023, in 23%. Well, we increased in 25% in 2Q 2023, which is higher than 2Q 2022. Talking about the cost structure of the company, we have a stability in the main items in cost. We have personnel, 23.3% in 2Q 2023.
Absolutely aligned with what was reported in the first quarter of this year and the previous year. Third parties, 16% per, in the second quarter of 2023, also very much aligned with what was reported in the previous quarter, and also the MatMed is the same behavior. We have the materials, there is a growth, accelerated growth, in the number of surgeries, notably the big surgeries. We have, the, these factors take into consideration in our analysis. This item of our cost structure is already positioned in the same levels that we had in the pre-pandemic. Graph to your right. We presented, therefore, in the second quarter of 2023, BRL 262 million of administrative expenses. Once again, just talking about the, hospital costs segment, represented 23% of the revenue of the company.
In monetary values, there is a decrease of 1.1% if you compare it to the first quarter of 2023. In a comparison, annualized comparison, a growth of 15.2%, as you can see. When adjusted, with the reversion of the provision for the payment of profit sharing, in the second quarter of 2022, there is a growth of 6%. In six months, the administrative expenses and general expenses, BRL 528 million, a growth of 20% if you compare it to the first six months of 2022. Once again, once you adjusted the one-off, the reversion of the provision for the profit sharing payment and the second one-off in the first quarter of 2022, with the changes of prognosis and several other legal demands, it resulted in a growth of 7.7%.
Let's go to page 10, EBITDA and net income. Segment, hospital services. To your left, the company reported over BRL 1.6 billion of EBITDA in the second quarter of 2023, a growth of 11.2% if you compare it to the first quarter of 2023, growth of 12.8% annualized comparison. In the 6 months, almost BRL 3.1 billion of EBITDA, a margin of 24.6%, a growth of almost 20%, as Paulo has commented at the beginning of the presentation. On the, on the right, we have the net income consolidated. The company is reporting the net income of BRL 435 million in the second quarter of 2023, adjusted by the expenses with the capture of synergies of SulAmérica.
Once again, the amortization of the added value of the portfolios, we have a net income of almost BRL 490 million. In six months, the net income of BRL 639 million, a growth of 26.7% if you compare it to the same exercise in the previous year. Once again, we have the items that are well dimensioned. We get to the almost BRL 865 million if you do the adjusted math. Once again, SulAmérica net revenues, as Paulo has mentioned, the net revenue of BRL 6.6 billion, a growth of 18.1% year-on-year.
On the graph to your right, we have the consolidated loss, loss ratio, a drop of 2.3 percentage points in the quarter analysis, a drop of 2.1 percentage points in the year-on-year, There is a drop of 6.2% in the consolidated loss ratio. Still below health and dental beneficiaries, we have the comparison analyzed +6.6%. I am almost done. Debt profile. On the top left, we can see the cash equivalent, BRL 30 billion almost. If we remove the technical provisions, we have the technical resource, BRL 50.6 billion almost. The net, the gross debt is BRL 31.6 billion.
The company closes this period with a net debt of BRL 16.2 billion , net debt LTM EBITDA 2.6x. The company is reporting all throughout the last quarters, the improvements in leverage. So it was 2.8x at the end of 2022, and it was improving in the first quarter, and now we get to 2.6x the net debt over LTM EBITDA. Also the net debt with the inclusion of insurance reserves, which would be something about BRL 11 billion . The leverage index, now 1.9x, but we do not use this calculation for the decision-making process for the finance, for the leveraging of our finance, anything that impacts the capital structure of the company itself.
The message here that I would like to give you, is that the company is more protected against changes in the monetary environment in the country, if you take into consideration the big cash, well, and the technical provision for the insurance. We have always the evolution of the average cost of debt, very much controlled, CDI rate plus 0.8%, actually. Here is the amortization. The cash, which is in our hands, is enough to face any payment until 2028, including the data amortization schedule. Last page, 14. The managerial cash flow, starting on the left, the reconciliation of the EBITDA with the cash, delta cash of the company. Therefore, we start with an EBITDA, EBITDA reported for six months of BRL 3 billion.
We have BRL 239 million of working capital that we are bringing back to the company. This is a result of a big effort of SulAmérica to adopt terms of payment and receivables that are in agreeance with the practices of the market, with the service providers, and also the good management of working capital. Thereafter, we have BRL 144 million that are negative with the other balance sheet items. Here we have judicial deposits, taxes. There are some smaller categories. We have the leasing at BRL 366 million. Thereafter, we have BRL 299 million in taxes. The investment activity, almost BRL 1.5 billion of investments. BRL 408 million in the development of the greenfields.
BRL 592 million in the development of the brownfields. BRL 159 million investment in IT. BRL 155 million in maintenance. BRL 33 million related to the activities of M&A, BRL 35 million of acquisition of real estate assets to do the land bank of the company. Thinking about the future growth. Sequence. The average. Well, the finance activities, we have BRL 1.1 billion, the cash. We have the capture of BRL 1.894 billion. We had the payment of the payment of debt of BRL 3 billion. The financial expenses, cash of BRL 489 million in the period of six months. On your right, we have the average days receivables, and the outstanding, and the payable outstanding.
121 days of average days to receive in the market, reflecting the effort of SulAmérica to adopt practices that are in agreeance with the market, along with all the service providers, including the hospital branch of the company. Except for this change in the receivables payment, we would have stability in the days receivables. Also, stability in the inventory and the days payable outstanding. This is the part of the results presentation, and now we are here open for the Q&A. Thank you.
Let's start the Q&A session for shareholders, investors, and analysts. If you want to ask any question, please type reaction and then raise your hand. If your question is answered, you can lower your hand.
Due to the limitation of the time of this earnings call, please, we kindly ask the analyst to limit to two questions at the most, therefore, more people can take part. First question is Joseph Giordano from J.P. Morgan. Please continue.
Hi, everyone. Good morning. Thank you for asking this question. Now, I wanted to explore two points: the hospital and SulAmérica. On the hospital, we've seen the short term, but looking at the ticket, it has a season, seasonality, then maybe it was atypical, and maybe you can explain a bit what was the improvement of SulAmérica. In more details, I would like to ask, what is the change in the complexity profile all throughout this quarter? We're talking about a change, seasonal change in the first quarter. It's a bit better than normal.
Do you think that there was an impact in that demand of the second quarter? I would like to understand, looking ahead, how do you foresee the next negotiations that are unfolding in terms of receivables, deadlines, and the ticket itself? We can see the operators are improving in the sequential base, this is improving as well. My second question in SulAmérica, the. Well, it really the consolidated loss ratio surprised, and you talk about 18, 24 months for the normalization of this loss ratio. Well, given the numbers that you published, could you think that we could get to this number in a deadline that is shorter? The efficiency gains are stronger. I wanted to understand if there is some buffer, since we have BRL 500 million left from SulAmérica, the result is BRL 1 billion. It's very substantial.
Do you have any leeway in that sense?
Let me answer the first question of the complexity of the ticket. We had a great stability in complexity in the second quarter if you compare it to the first quarter of 2023. I mentioned very briefly in the presentation, when we w hile the relevance of the gross revenue of the company, it's 20- in the second quarter of 2023, 30%. In the first quarter of 2023, it was 28%. Very similar. Surgeries, 22% is in all quarters. The first point was ICU. Now, the patient day number, the movement in the ICUs, 45% in the second quarter of 2023, 44 in the first quarter of 2023. We are stable.
In the chapter ICU, patients with ventilated assistance, 22% in the 8.4% to8% in the first quarter, 8% in the second quarter, much below the indicator that was verified for the second quarter of 2022, which is 10.2%. These are the indicators of complexity at a very low rate. Counterpointing that, the big surgeries and the total surgeries grew from 7.1% in the previous quarter to 7.5% in this quarter, relatively similar to what we've realized in the second quarter of 2022. I believe that there is a certain stability in the level of complexity of the company. Once again, I believe that the analysis of the evolution of the average ticket in the quarter, quarter-on-quarter, are very complex.
There is a myriad of factors that affect that indicator. I truly believe that the analysis with the windows have to be more dilated windows. These are more illustrative of the performance of the company. Therefore, I highlighted the increase of the average ticket of 7.5% and the annualized comparison between the gross revenue that is reported in the second quarter of 2023, facing the gross revenue of the second quarter of 2022. Strong evidence of what I am stating, that in six months, the annualized comparison. Well, the six months of 2023 and 2022, the evolution of the average ticket was 9%.
Certainly, this is a strong evidence for that the methodology for the pricing of our services, it is implemented and it remains, you know, that line that we had for you because of the IPO, where our services are adjusted in regards to the IPCA rate, maybe 1 percentage point of spread. As we advance quicker with the other segments, for example, diagnosis, oncology, maybe we can capture a few more percentage points of revenue. Besides that, Paulo just mentioned in his presentation, we have the concentration of readjustments in the payer, in the payers, in the third quarter, and the negotiations point to the direction in the methodology to the methodology that we already published for you, with the readjustments of the average ticket of the company all throughout several FYs. Make sense?
Hi, Joseph. Good morning. Raquel is here.
Well, in regards to the improvement of the loss ratio, certainly very relevant, 2 percentage points. Improvement, we've been in that market, we know how complex it is to do that. 87.2, still a number that is high. Challenging number, a number that pressures negotiations in all parts of the chain. I believe that we have to look at an improvement of another case. First, we were looking at something more 18 to 24 months. Maybe we're gonna get before, we're gonna get there before. These improvements are sequential. We have seasonalities that are different in quarter-on-quarter. I would like to highlight the effort of the teams for the readjustment. With the customers, they have great elasticity in the application of these adjustments, not just the number of the readjustment itself, it's to become these products more sustainable.
The client is mixing the readjustment with the co-participation in surgeon or the increase of co-participation, reduction of levels of reimbursement, mainly in exams and therapies. We have a great partnership of our clients, our customers. We've explored as well, and I mentioned that previously, growth outside of the obvious access and consolidated access of Rio de Janeiro, São Paulo. We are launching new products today. We have the launch of another three products just today. The actions in the management of this is in the DNA of the delinquency, and specifically, specifically, I would like to say that in the reimbursement, we have great results with the reduction of the entry for the submission of reimbursement. There is still a lot to be done.
I would like to remember the seasonality between the quarters, the normalization is down the right path.
Thank you.
Next question, Mr. Samuel Alves, BTG Pactual, the floor is yours.
Good morning, Paulo, Otávio, Raquel, and all the board of directors. Now, two questions myself. First, could you please tell me more about the oncology segment? There is a drop in infusions in this quarter with the ticket that is a bit stronger. Was there any mix issue that can explain that was, you know, a more difficult base in the volumes of infusion? Second question, still in the issue of loss ratio of SulAmérica. Could you share any July, what the medical frequencies, any color on that? Has that helped quarter-on-quarter? What any type of color would be useful.
Hi, Samuel. Paulo, I'm gonna, I'm gonna answer the first question.
Oncology, the answer is simple. We discontinued a few contracts with operators that we've had. We understood that there was an associated risk that was higher. They were enhancing the deadlines, and we understood that this was the best decision to discontinue these contracts. This has a short-term impact in the volume. Nonetheless, we are hoping to replenish that all throughout the quarters. Therefore, we did not see the same level of growth that we were presenting, basically because of this issue. Raquel.
Hi. You know that we don't give the guidance, but looking at the seasonality of previous years, July tends to be a month more pressured in the amount of events, looking at the flus, pediatrics, in general. So July is always a bit more pressured.
Thank you. Thank you, Paulo and Raquel.
Thank you. Next question, Mr. Maurício Cepeda, Credit Suisse. The floor is yours.
Hi, Paulo, Otávio, Raquel. Thank you for the space to ask the question. Two questions. First, in regards to the portfolio of SulAmérica, it is stable quarter-on-quarter, which is a very positive scenario for the readjustment prices. I wanted to explore the efficiency of this portfolio, because even though the base, the base is stable, you have the growth addition of lives. My question is, somehow that should help your loss ratio consolidated over the next few months. Have you sold these plans directly? In fact, the loss ratios are doing a trade-off for tickets that are more attractive for the preservation of the portfolio. Second question has to do with the general strategy of the business.
We understood that Rede D'Or has always a core business of health by its own nature, and SulAmérica brought insurance and other businesses that now are, are appearing in your results. Given all the months that have gone by for the integration, do you somehow have plans to make these businesses, you know. Can you tell us more about the businesses that are not health-related?
Hi, Cepeda, this is Raquel. Thank you. As you said it yourself, we are facing in a positive way, the stability of the portfolio. In the second quarter, we have adjustments that are expressive. To give you color in the numbers. I have an entrepreneurial on real adjustment of 23.4% and the PME payout about 20.9. When we look at readjustments of health in general, excluding the specificities of the individual, it's 22% average.
When you look at the at that through the official basis, not always, it's so simple to do this math because there is dentist, dentistry here, the adjustment of the 7%. There is a great elasticity. The partner customers are with partnership and understanding what is needed to be done now. Looking at more of the film and not so much the picture, well, the picture is very good for 2023. There is a growth that is very expressive from January onwards. In regards to the second quarter, is the second part of your question, if we are focusing on products that have an average ticket that is higher, and then. Well, this is a part of the strategy, as it is part of the strategy, getting into new geographies, with markets that are not explored.
We are working with all those fronts with a lot of balance, austerity, and focus, and profitability, and we are renewing the portfolio and also focusing in new sales. Of course, you know, idiosyncrasies, depending on the geographies and the brands and the client, it makes sense to have a differentiated strategy, but in general lines, the focus in profitability is absolute.
Thank you.
Maurício Cepeda, I'm gonna get the second question about the other part of the business. Marcelo Melo, he leads all that part of the asset of lives, and, well, we have a very solid team. The results are very good. The funds industry has, has had problems, we captured and grew BRL 4 billion. Given the seniority, this has not been a distraction for us and the welfare and pension.
Of course, Rede D'Or would be able to add any value. We have competency. We have great results with the seniority that they work. This is not a distraction for us, and they're delivering great results there.
Thank you. Thank you, Raquel. Thank you, Paulo.
Next question, Ricardo Boiati Banco Safra, Safra Bank, please.
Hi, good morning. Paulo, Otávio, Raquel, and all the other participants. First question, expansion of the hospital division, Rede D'Or. Obviously, you have an indicator of the projects for the expansion, organic expansion, greenfield, brownfield, if you can give me a bench of what you expect in terms of concentration of beds. The beds that are predicted for 2023, 2024, they're more concentrated towards the end of the year?
Just so we can try to understand better the evolution of this prediction for organic expansion in the hospital segment and modeling. In regards to the inorganic expansion, vertical, that vertical, the company has not done M&As for quite a while in the hospital segment. Is there any market that you see that is hitting? What is the market dynamic for acquisitions in the segment of hospitals? Well, that would be the first question. The second question is in regards to the competitive environment in insurance. Raquel, if you can comment, how do you see that competitive dynamic and how receptive the clients are in regards to the readjustment? I agree that the dynamic, the trade-off, has been very favorable in readjustment and loss of lives. It's very favorable.
Could you comment if the level of copay has increased, the changes to alternative healthcare insurance? I want to understand what is the commercial dynamic in health insurance policies. Could you tell me more?
All right, Boiati , this is Paulo. First part of your questions. We have a schedule. We don't have any updates to do on that schedule because we just published it. The works are doing very well. We have important launches over the next few quarters, I would like to highlight, well, the ones that we think that are important. We have Novo Barra D'Or. If you go through there, it's in front of Barra D'Or on the other side of the street. You can see the building being built. Advanced phase for the launch in the first quarter of 2024.
Also, we have in São Paulo, the new tower of Vila Nova Star. If you see it, it's already well advanced, the works. The hospital had a high occupancy, so we are looking forward for launching this expansion. Certainly, there will be a ramp-up that will be very quick due to the high occupancy and the success of Nova Star. We have two São Luizes that are very big, one in Guarulhos, one in Alphaville. In the Great Sao Paulo area. Well, they're going well with the schedule. The works of Aliança Star at Aliança. Aliança Star of the Memorial Hospital in Recife, very advanced. We're very satisfied with the advance of these works. Also, another decision alongside Hospital Alcanceo, building a new tower that will have São Luiz in the expansion of the hospital.
This is an area that we have had a high occupancy, and they're lacking a more complete, larger structure. We are very excited, optimistic. We have Macaé as well. It's very advanced, an area that really lacked beds. To continue with more details, well, there is the launch. We don't talk about the launch one on one. We published a list of projects, but I wanted to comment a few to say that this is the rationale of the importance of this organic growth for us. There are a few acquisitions. As I commented on the previous call, we always have a pipeline of talks. Nobody has, has an asset in Brazil without talking with Rede D'Or. Nobody sells it without talking to us. We are at a privileged position to evaluate these assets.
We had a period where the adjustment of prices in the public sector happened in a very quick way. The adjustment of expectations, many times in private transactions, takes longer. Some of these transactions that we have in the pipeline, what we had the, the expectations that we considered that are very high, regardless of the timing. We did not change the vision of the return on investment. If you see the acquisitions that we've seen, that we've done all throughout 2020 to 2021, these are acquisitions that we didn't see the differential for multiple for Rede D'Or. A great deal of the market did that. We ended up being outside of the, these big transactions, and we are focusing on where we will get the same level of return.
We are buying a hospital to operate forever, to be an asset for the company forever. We're not thinking about dividends. We are have discipline, and many of these talks, they start to gain traction as some of these sellers also start to adjust to a reality that is the market reality itself. We are optimistic that we can, within this pipeline of talks, we can we're gonna have these conversations for many years, and then we can have a replenishment of some of these transactions that might be interesting to add to our portfolio. I will give the floor to Raquel to talk about the SulAmérica.
Hi, Boiati . Thank you. Honestly, I see the market behaving better in terms of commercial dynamics.
I think it's very clear for everyone that if we plant the contract poorly, we're gonna have a negotiation of readjustments in the first year, second year, very complex, and the chance of you losing that contract thereafter is increased. Everybody is doing the readjustments that are significant. Of course, for you to keep an account in-house is much cheaper than bringing a new account in-house, specifically when it's surprised. In general, given specific situations, do we have a very dynamic issue? The picture of the market is more rational, which is a great news. More rational market. Talking about the participation, the alternatives, these are growing, the co-participation. When we look at the entrepreneurial, very short while ago, we saw the stock of entrepreneurial 60% of the stock with some level of co-pay.
Now we have over 75% of the stock with the level of co-pay. When we're talking about new sales, over 90%, 92%. The contracts that had some type of co-participation, while increasing the co-participation, taking some steps and getting it into certain other groups of procedures that we didn't have. The news of the moment is that PME, I don't know if you remember, some two years ago, the small and medium companies. SulAmérica didn't have that PME with co-participation and commercialization. It took some time to lever, but now we see over 30% of the new sales with co-participation. These are all the crops that are being planted, and we hope that they're very sustainable. Talking about innovative products in a very broad way, we launched a few months ago. It's gonna be three months, actually.
A new concept for the small and medium-size, but also entrepreneurial, the modular reimbursement. Thinking out loud, usually the reimbursement would be useful for two things: for appointments and honorarium for surgeries. That would be first and second place in representativeness of the reimbursement. All of a sudden, in two years post-pandemic, that became first exams. It doesn't make any sense, and then non-medical therapies, then appointments, and then honorarium. That's why we are launching specifically for products of the basis of the pyramid. They tend to be returning the reimbursement to their utilization in the correct way. The product for the base of the pyramid, you have the basic, they had less than 0.5% of its loss ratio and reimbursement, and so it doesn't make sense. We've done so.
We've done that, new clients have accepted this very well. Also, with the inception, new products being launched, Direto Nacional, Direto Nacional in Rio de Janeiro, São Paulo, Ceará, with all the logic of co-participation and reimbursement, modular reimbursement. The launch as well of an Especial product, which is a product that is very much consolidated in the market with all the service providers that are part of Especial Especial. We are providing a step that is a product between Especial and Executivo, specifically in the region of São Paulo, which is Especial Mais, plus Especial, that all the service provider in the Especial have the auto laboratory of Dasa and Vila Nova Star. We have actions coming, we are retaining the clients in-house. That's it, in general terms.
Thank you very much.
Next question, Vinicius Figueiredo from Itaú BBA. The floor is yours.
Good morning, everyone, and thank you for taking my question. I would like to talk about the expectation in nursing. In the results in the second quarter, from what we've seen, it doesn't seem to have any provisioning effects. If you can give us some color in regards to the negotiations that were done with the Union of Nursing, that would be very useful. The specific point in regards to CapEx. Given that there was a review, and looking at the greenfield and brownfield parts, should we wait a deceleration in the reimbursement of disbursement of CapEx over the next few quarters?
Hi, Vinicius. I'm gonna take the first question, and then I will give the floor to Otávio and Paulo. Hi. The nursing base, we have first, the competency that will impact is October.
We are still having a few discussions with that, but based on what was decided, you should have realized that the base is for, you know, 120 hours. A great deal of the hospitals for private hire for 180 hours, you have proportionality. The impact is much less than what we predicted, and if we consider some of the operations, for example, that impact of the motion is not gonna be it's not existing because we are a pay above the basis of the salary. There are some collective bargaining agreements with the union for installments, for payment in installments of the base of the salary, along with these, you know, actions we are discussing with the unions.
A series of actions that we have for optimization of administrative areas and decreasing the cost with a series of opportunities for the reduction of expenses in several other areas. We understand that we will be able to do a neutralization that is complete of this impact that will happen from October on. I'll give the floor to Otávio.
Vinicius, if you compare it to the investment plan, up until now, inserted in the reference formu- form of the company that closed at the end of the FY of 2025, certainly there is an improvement in the distribution of disbursement of the cash for all these projects, having taken into consideration that the cycle of investments goes till the end of 2027. I believe that it is important to highlight that we always observe the our own capital costs with the sub.
With the third party, the balance of the company, that's how we do the decision-making for the investments. More important than that, the monetary environment for the decision for the review of the investment plan, we've had a myriad of licenses for works that we did not obtain at the time to execute these investments according to the investment plan that was published. The company has a balance that is extremely robust, over BRL 90 billion of total assets, BRL 30 billion in titles and real estate titles. We have BRL 27 billion net, and the indebtedness we have very good for. We have financial strength to work with these investments, that historically, in the case of greenfields, the deleverage returns over 20% of a year. In the case of the brownfields, deleveraged about above 40%.
Thank you, Paulo, Otávio.
Next question, Gustavo Miele, Goldman Sachs.
Good morning, Paulo, Otávio, and all the others. two questions very quick on the hospital business. First, materials and medications. I would like to understand, how do you think the evolution of the cost for the rest of the year? We are looking at the short term, there is a volatility because of the mix. There is the oncology. I wanted to understand how the talks with the of the company is with the materials providers. Do you think that the company Do you think that as a company gains scalability, is there a possibility for you to renegotiate the terms with these partners? Maybe there is a dilution there that is ever higher looking at the future. If you can comment on that, I would like to thank you. Also, second issue, brief.
Just wanted to get an update from you in regards to São Luiz Campinas. Paulo commented at the beginning of the presentation that the registrations that you got into that asset, the expectation is that it's gonna be a break-even in the six months, so maybe the end of the year. If you can share some KPIs about occupancy, margin, whatever you can share, ticket as well, in regards to the expectation towards the end of the year about that hospital. That would help very much.
This is Otávio. I'm gonna take the first question about MatMed.
Well, the cold analysis of the aggregated numbers of materials and medications in the percentage of our revenue allow me, well, the deep analysis and the observation that item on item on item, material and medications, we are item on item on the position that prevailed before the pandemic. This is one of the great levers of this company because of its relevance within the segment where we are. We are obsessed by efficiency, cost controls. Yeah, you should expect that in sequential improvements throughout the next quarters, not necessarily all quarters, will be captured by the company. I would like to bring your attention to the fact that the accelerated growth in the number of surgeries, notably the big surgeries that demand items, materials, and medications with a higher cost. The aggregated analysis of the numbers is one of the problems.
We have great levers of the company, and it's better. Now, talking about Campinas. Well, about these new projects, we are expecting to open 80 beds a year, so the hospital will have 300 beds once it's the full, full occupancy, so you're talking about four years of maturation. Now, we can obviously make it profitable before that. You operating a hospital such as this, we open with 50 beds. It's registered for 50. Today, we have over 70% of occupancy on the 50 beds. If you run a full month with that average, you have a break-even. That's why we were projecting that before the 6 months, we should have break-even. We are accelerating the opening of more beds. When this hospital is running in the.
Well, 100, 120 beds, given that the position is São Luiz, we're following the price positioning where São Luiz, we are servicing health insurances that are SulAmérica, Especial and above, Especial, and the other operators down the same threshold. The position is of a higher ticket, given all the differentials that the hospital offers. This is a hospital that when it runs with a 100, 120 beds, we can deliver margins for the company. We are very happy, optimistic that with the deliverables, with some with in Campinas, and also the great acceptance of society, medical society in Campinas, the companies, it's a big impact, positive impact for the region that deserved to have a high standard hospital.
Thank you. Next question. Fred Mendes, Bank of America. Go ahead. Two questions.
First question is hospital. There is an improvement in the operational beds in this quarter, but still, closed beds, a number that is very relevant. How does that talk with the expansion plan of the company? We have a seasonality. Can we wait for the trend of stronger for the quarter, the opening of the operational beds? Second one, which is more technical in terms of SulAmérica, stronger result, but it brings your attention to the provisions of health. The Note 14 is increasing in BRL 500 million per quarter since you took the company on the 4th quarter. I wanted to understand if this is a more conservative vision of the company in regards to the individual healthcare plans or the math just leads you to that threshold, depending.
I just wanted to understand that line for the next quarters.
Thanks. Fred, this is Otávio. By your first question, operational beds. We are always gonna have a gap between the total beds and operational beds. We always have hospitals ramping up. Off the top of my head, we have, you know, big hospitals going over ramp up. We have other enterprises that are in the final phase of ramp up. We are always gonna have a gap between the number of total beds and the operational beds. Well, a rule of thumb that we always use is 80 beds open per year in any hospital. For example, of a hospital of 240 beds, we finish the ramp-up process in three years. Second question, provisions in SulAmérica.
I would like to say, part is being conservative, but also part is the adoption of deadlines, of payments, receivables, depending on the side of the table they are. SulAmérica imposes practices that are more conducive to the most of the actors of the market, alongside their service providers. It's a bit of both.
Thank you, Otávio. Our next question, Leandro Bastos, Citibank, please.
Hi, everyone. Two quick questions. First, synergies of SulAmérica, could you comment, well, you know, how many millions were captured in this second quarter? Thinking about the opportunities that are not in the numbers, do you have any more color on the fiscal opportunities on the price of capital with SulAmérica? That's it. All right.
In terms of synergies, we have synergies in BRL million, in many BRL millions, and expenses that would be avoided in 2022. I, I understand that the value is substantial. Part of that is captured with the previous quarters, and remember that there is costs, one-offs, in regards to the capture of the synergies. From now on, you will follow up on the evolution of the capture of synergies for the quality of the results of the company. Also, we will follow up in terms of costs and expenses and administrative expenses and relevance of SG&A when it's measured against the gross revenue of the company. Could you repeat the second question?
It's about opportunities, fiscal opportunities for the capital structure with SulAmérica. Any color?
Yeah, we advanced substantially.
We almost finished the analysis. There is a tax, you know, reform that is approved at the lower chamber, now the Senate, all the actors on the Brazilian economy taking part. There's discussion, no decision will be taken so long as we get the final picture. You, you understand what I'm saying?
Yes. Thank you.
Since we don't have any more questions, the Q&A session is closed. We would like to give the floor to Mr. Paulo Moll for the final closing of the earnings call.
Everyone, thank you very much for taking part in our call. We will see each other briefly. Thank you.
The earnings call of Rede D'Or São Luiz is closed. Thank you for your participation. Have a nice day.