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Brazil's PagBank sees net income growth accelerating in 2024

© Reuters.

By Andre Romani

SAO PAULO (Reuters) -Brazilian payment firm PagBank said on Wednesday it expects its recurring net income to rise up to 22% in 2024, topping the previous year’s growth after its earnings surpassed analyst estimates for the fourth quarter.

PagBank, which operates as a payment processor and a digital lender, said it sees recurring net income to be between 2.05 billion reais ($413 million) and 2.15 billion reais in 2024, after it rose almost 11% last year to 1.77 billion reais.

The guidance comes as the company posted fourth-quarter net profit of 488 million reais, up 20% year-on-year propelled by a similar rise in its total payment volume (TPV). Analysts polled by LSEG were expecting net profit at 473.8 million reais.

CEO Alexandre Magnani told journalists on Wednesday the quarter’s TPV growth was the result of a restructuring PagBank had done in the first half of 2023, which had included price hikes and about 700 layoffs.

He said this allowed the company to accelerate its business again in the second half of the year through initiatives such as the launch of new products and the strengthening the sales team in certain regions of Brazil.

“These initiatives are bearing fruit now, mainly during the fourth quarter,” he said, adding the firm has seen similar growth so far this year.

PagBank also said it expects 2024 TPV growth to accelerate to between 12% and 16%, while investments are seen stable at between 2 billion reais and 2.2 billion reais.

Recurring fourth-quarter net profit, which excluded a long-term share option plan to executives, came in at 520 million reais.

Its net revenue rose 10% year-on-year to 4.35 billion reais, also higher than estimates.

($1 = 4.9675 reais)