The actions of IRB (IRBR3) retreated strongly this Tuesday (24), with investors digesting the numbers released by reinsurer referring to November 2022.
The company presented a net loss of BRL 48.5 million in the month, an amount lower than the BRL 65.3 million reported in the same period of 2021.
Even so, the IRB accumulated losses of BRL 633.7 million in the first eleven months of 2022, up 24.2% in the annual comparison.
In addition, the IRB had a drop in premiums issued both in November and in the accumulated from January to November.
The premium issued by the IRB totaled R$ 542.4 million in the 11th month of last year, a drop of 23.2% in the annual comparison. The premium in Brazil fell 6.9%, to R$402.8 million, while the premium abroad plummeted 49%, to R$139.6 million.
Already in the first 11 months, the company added R$ 7.2 billion in written premiums, a drop of 9.6% compared to the same period of 2021. The retreat was driven by operations abroad, with the written premium showing a reduction of 26.8%, to R$ 2.3 billion.
In today’s trading session, IRBR3 lost 8.82%, trading at R$0.93.
2023, the year of the IRB?
The IRB started 2023 well, after leading the Ibovespa declines in 2022. In the accumulated result for the year so far, the stock registers gains of approximately 19%, trying to recover from the fall of 78% in the 12 months of last year.
For the analyst Inter ResearchMatheus Amaral, the market can expect better results from IRB in 2023, with the loss ratio in the rural branch, one of the main points that affected the company’s balance sheet in the second and third quarters, starting to normalize.
Amaral points out, however, that the IRB remains sensitive to new losses, given that regulatory solvency remains tight, even after the subsequent share offering of R$ 1 billion.
In the analyst’s assessment, the IRB’s challenge will be to maintain “a good evolution” in premiums issued in Brazil to offset the strategy of reducing exposure abroad.
For Leo Dutra, from Invius Researchwhile the long-tail contracts continue to have a significant impact on the company’s results, “we should not have such a positive outlook for the coming months”.
Regarding the data recently released by the IRB, Citi analysts estimate that, if the company continues to report a high loss ratio (96% in November 2022 and 104.7% between January and November 2022) and more losses, “in the we ask whether capital adequacy may once again be put at risk.”
THE Citi reiterated the “neutral” recommendation for the reinsurer’s securities.
In the most recent update of the thesis, BB Investimentos recommended selling IRBR3, citing the risk of a new issue of shares becoming necessary if the company’s liquidity ratios are out of line again in the coming quarters, “which would cause further dilution of shareholders who do not participate in the eventual subscription”.
reverse stock split
The IRB saw its shares reach historic lows in the last year, being traded below R$ 1 for several consecutive trading sessions.
To raise the share price, shareholders approved the reverse stock split at a 30 to 1 ratio, to take effect on January 25.
With information from Reuters.
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