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Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good morning, and welcome to the second quarter 2008 results conference call of Amil Participacoes SA, Amilpar. With us here today, we have Dr. Edson de Godoy Bueno, CEO and Chairman of the Board; Ms. Dulce Bueno, Vice Chairwoman of the Board; Dr. Gilberto Ferreira da Costa, CFO; and Mr. Erwin Kleuser, Investor Relations Officer.
We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the Company's presentation. After Amilpar's remarks, there will be a question and answer session for investors and analysts when further instructions will be given. (OPERATOR INSTRUCTIONS)
Today, we will have a simultaneous webcast that may be accessed through the website, www.amilpar.com.br/ir. There will be a replay facility for this call on the website for a week from August 13th through August 19th.
Before moving into the conference, we would like to stress that since Amilpar was incorporated in May 2007, the Company's financial statements for the previous period were elaborated on a pro-forma basis. The objective is to present the financial situation for mere comparative purposes based on historical information of the companies that are former to Amilpar.
Before proceeding, let me mention that this call may contain forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to the growth prospects of Amilpar. These are merely projections and as such are based exclusively on the expectations of Amilpar's management concerning the future of the business.
Such forward-looking statements depend substantially on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy, and the industry, among other factors and risks disclosed in Amilpar's file disclosure documents and are therefore subject to change without prior notice.
Now I'll turn the floor to Dr. Edson de Godoy Bueno, who will begin the presentation. Dr. Bueno, please go ahead.
EDSON DE GODOY BUENO, CEO & CHAIRMAN, AMIL PARTICIPACOES SA: Good morning, everyone. And thank you for attending. It's a pleasure to welcome you to another new results conference call. First, I will review the Company's operating strategy indicators. And then I will hand you over to Dulce, who will give you more details on our financial performance the second quarter of 2008.
It gives us great satisfaction to announce that Amil, once again, exceeded our expectations for second quarter, historically, always a difficult quarter, recording financial and operating results in the second quarter 2008, a new excellent revenue growth of 32.1% with increase of 55.8% in profitability. I would like to share these achievements with our employees and with our investors, who have placed their trust in our competitive advantages and believe in our sustainable growth.
We reached the record level of 3 million members at the close of the quarter, 37% more than at the end of the same period last year. In comparison to the end of 2007, the Company recorded purely organic growth of 90.6%, once again underlying one of the Company's most important recurring features since its foundation--growth with profitability, the positive membership performance, of course, despite the continuing effect of the recognition of unprofitable contracts and the cancellation of inactive members.
From the recently consolidated acquisitions, this effect tends to continue in the months ahead. All our products experienced significant growth. Our corporate plans recorded a 27.6% year-on-year growth. And we now have more than 1.8 million members in this segment, which accounts for 61.2% of our total membership and for 56.5% of our revenues.
Individual plans also did very well, growing over 38% by June 2007 from approximately 473,000 to 652,000 members. Individual plans now account for 21.6% of our membership. We recently launched a new [Blue] product, where one of the main reasons for this increase in the growth rate of individual membership reached for the first time in many years is again higher than that of corporate plans.
Individual plans are strategically significantly for Amil, not only because of its low medical loss ratio, but also because only 20% of the Brazilian population is currently covered by health plans. The currently stable economy environment in Brazil and the consequent increase in individuals' earnings tend to substantially increase the penetration of this segment in the current years.
And last but certainly not least, our dental plan membership jumped by 84.2% over the second quarter of 2007. We currently have around 520,000 members with purely organic growth of 80.4% in the quarter. Dental plans now account for 17.2% of our membership. We continue to focus on this market, especially on cross-selling opportunities for both new and existing clients.
Growth in the dental segment is strategic for Amilpar due to synergies with our current membership base and through the shared utilization of the administrative and sales infrastructure for medical plans. With the dilution of G&A, we believe our dental plan margins will tend to remain at higher levels as we absorb more members, incorporate skills gains, and begin using our medical networks for dental services.
We are convinced that having both medical and dental products in our portfolio represents a significant competitive advantage. We have maintained one of the best medical loss ratios in the industry, despite the adverse impact from the consolidation of the acquired companies with much higher medical costs than our own.
In addition, in this second quarter, we were negatively impacted by two other factors--the coming of winter, which, of course, was expected. And the recent increase in medical costs and the outbreak of dengue fever in Rio de Janeiro, a one-time effect. Compared to the second quarter of last year, our medical loss ratio related to membership utilization fell...
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