Inter & Co(INTR) - 2024 Q2 - Quarterly Report

Management Report Company Overview Inter & Co, Inc. is a Cayman Islands-incorporated holding company that controls the Inter group, offering a comprehensive digital ecosystem of e-commerce and financial services across Brazil and the United States - Inter & Co, Inc. is a Cayman Islands holding company, controlling the Inter group and indirectly Banco Inter[3] - Inter provides e-commerce and financial services, including banking, investments, credit, insurance, cross-border banking, and a marketplace in Brazil and the US[4] Operating Highlights The company reported significant customer growth, surpassing 33.3 million, and an increased activation rate of 55.3%. The loan portfolio also grew by 10.7% to R$33.0 billion - Total customers: 33.3 million as of June 30, 2024[5] - Activation rate: 55.3%, an increase of 3.1 percentage points when compared to June 30, 2023[5] - Loan portfolio balance: R$33.0 billion, representing a positive variation of 10.7% compared to December 31, 2023[5] Economic and Financial Highlights Inter & Co achieved a substantial profit increase of 372.8% to R$417.9 million for the six-month period ended June 30, 2024, with revenues reaching R$2,879.5 million, up R$705.4 million YoY. Administrative and personnel expenses also increased Profit for the period (H1 2024 vs H1 2023): | Metric | 06/30/2024 (R$ million) | 06/30/2023 (R$ million) | Change (%) | | :----- | :---------------------- | :---------------------- | :--------- | | Profit | 417.9 | 88.388 | 372.8% | Revenues (H1 2024 vs H1 2023): | Metric | 06/30/2024 (R$ million) | 06/30/2023 (R$ million) | Change (R$ million) | | :------- | :---------------------- | :---------------------- | :------------------ | | Revenues | 2,879.5 | 2,174.1 | 705.4 | Administrative and Personnel Expenses (H1 2024 vs H1 2023): | Metric | 06/30/2024 (R$ million) | 06/30/2023 (R$ million) | Change (R$ million) | | :----------------------- | :---------------------- | :---------------------- | :------------------ | | Administrative & Personnel | (1,192.7) | (1,092.1) | (100.6) | Equity Highlights Total assets grew by 10.3% to R$66.6 billion, and shareholder's equity increased by 13.3% to R$8.6 billion as of June 30, 2024, compared to December 31, 2023 Total Assets (06/30/2024 vs 12/31/2023): | Metric | 06/30/2024 (R$ billion) | 12/31/2023 (R$ billion) | Change (%) | | :---------- | :---------------------- | :---------------------- | :--------- | | Total Assets | 66.6 | 60.35 | 10.3% | Shareholder's Equity (06/30/2024 vs 12/31/2023): | Metric | 06/30/2024 (R$ billion) | 12/31/2023 (R$ billion) | Change (%) | | :---------------- | :---------------------- | :---------------------- | :--------- | | Shareholder's Equity | 8.6 | 7.6 | 13.3% | Relationship with Independent Auditors Inter & Co maintains a policy for contractual risk analysis and an Audit Committee to ensure transparency, objectivity, and auditor independence. KPMG Auditores Independentes Ltda. confirmed its independence for the period ended June 30, 2024 - The Board of Directors evaluates transparency, objectivity, governance, and auditor independence for contractual risk analysis[7] - An Audit Committee evaluates the effectiveness of independent and internal audits[7] - KPMG Auditores Independentes Ltda. confirmed its independence and objectivity in conducting audit work for the period ended June 30, 2024[10] Acknowledgment The management expressed gratitude to shareholders, customers, partners, and employees for their trust and contributions - Management thanked shareholders, customers, partners, and employees for their trust and contributions[11] Independent Auditor's Report KPMG Auditores Independentes Ltda. reviewed Inter & Co's condensed consolidated interim financial information for the quarter ended June 30, 2024, in accordance with IAS 34. The review found no material misstatements, concluding the information is prepared in all material respects according to IAS 34 - KPMG Auditores Independentes Ltda. reviewed the condensed consolidated interim financial information of Inter & Co. Inc. for the quarter ended June 30, 2024[12] - The financial information was prepared in accordance with IAS 34 Interim Financial Reporting[13] - Based on the review, nothing came to attention that causes belief the information is not prepared, in all material respects, in accordance with IAS 34[14] Unaudited Interim Condensed Consolidated Financial Statements Unaudited Interim Condensed Consolidated Balance Sheets As of June 30, 2024, total assets increased to R$66.57 billion from R$60.35 billion at December 31, 2023. Total liabilities also rose to R$57.97 billion from R$52.76 billion, while total equity increased to R$8.61 billion from R$7.60 billion Total Assets: | Date | Amount (R$ thousand) | | :----------- | :------------------- | | 06/30/2024 | 66,573,460 | | 12/31/2023 | 60,351,797 | Total Liabilities: | Date | Amount (R$ thousand) | | :----------- | :------------------- | | 06/30/2024 | 57,965,924 | | 12/31/2023 | 52,755,107 | Total Equity: | Date | Amount (R$ thousand) | | :----------- | :------------------- | | 06/30/2024 | 8,607,536 | | 12/31/2023 | 7,596,691 | Unaudited Interim Condensed Consolidated Income Statements For the six-month period ended June 30, 2024, the Group reported a profit of R$417.885 million, a significant increase from R$88.388 million in the same period of 2023. Revenues grew to R$2,879.540 million from R$2,174.148 million, driven by higher net interest income and income from securities and derivatives. Basic EPS increased to R$0.90 from R$0.15 Profit for the period (R$ thousand): | Period | 06/30/2024 | 06/30/2023 | | :------- | :--------- | :--------- | | Quarter | 222,664 | 64,172 | | Semester | 417,885 | 88,388 | Revenues (R$ thousand): | Period | 06/30/2024 | 06/30/2023 | | :------- | :--------- | :--------- | | Quarter | 1,478,599 | 1,150,034 | | Semester | 2,879,540 | 2,174,148 | Basic Earnings Per Share (R$): | Period | 06/30/2024 | 06/30/2023 | | :------- | :--------- | :--------- | | Quarter | 0.48 | 0.12 | | Semester | 0.90 | 0.15 | Unaudited Interim Condensed Consolidated Statements of Comprehensive Income Total comprehensive income for the six-month period ended June