Afya Limited (NASDAQ:AFYA) Q3 2023 Earnings Call Transcript
Afya Limited (NASDAQ:AFYA) Q3 2023 Earnings Call Transcript November 14, 2023
Renata Couto: Thank you for joining us for Afya's Third Quarter 2023 Conference Call. Today, I'm here with Afya's CEO, Virgilio Gibbon; and Luis Andre Blanco, our CFO. During this presentation, our executives will make forward-looking statements. Forward-looking statements could be related to future events, future financial operating performance, known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those contemplated by these forward-looking statements. Forward-looking statements in this presentation include, but are not limited to, statements related to the business and financial performance, expectations and guidance for future periods or expectations regarding the company's strategic product initiatives, its related benefits and our expectations regarding the market.
These risks include those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on the information available to us as the date hereof. You should not rely on that as predictions of future events, and we disclaim any obligation to update any forward-looking statements, except as required by law. In addition, management may reference non-IFRS measures on this call. These measures are not intended to be considered in insolation or as a substitute of the results prepared in accordance with IFRS. This presentation has reconciled these non-IFRS financial measures to the most directly comparable IFRS financial measures. Let me now turn the call over to Virgilio Gibbon, Afya's CEO.
Virgilio Gibbon: Thank you, Renata, and thanks, everyone for joining us today. As we approach to the end of the year, we can see Afya maintaining the strong pace. So moving on to Page number 3. Let's start with our quarter highlights. Adjusted net revenue grew almost 25% year-over-year, reaching BRL723 million, followed by an adjusted EBITDA growth of nearly 22% year-over-year, reaching BRL278 million with a margin of 39%. We also reported a record cash flow from operating activities generated, ending the nine months period with BRL934 million, 26% higher than last year, with a cash conversion of 109%, and we were able to reduce our net debt to BRL418 million when compared to December 2022, even with UNIT and FITS acquisition in January, as we will see on the Slide 14.
Adjusted net income followed the same positive trend of last quarter and reached BRL128 million, a growth of 7% year-over-year with an adjusted EPS of BRL1.38, 7% higher than last year, even considering a higher net debt level and a higher interest rate. This result reflects Afya's great capital allocation discipline on buybacks, M&A and an efficient capital structure. In this quarter, we have reached 3,113 operating seats with the acquisition of UNIT and FITS, the beginning of Mais Medicos operations, along with Ji-Parana campus (ph), representing an increase of 15% year-over-year. Our number of undergrad medical students has reached more than 21,000, representing a 20% growth compared to the same period last year. In the Continuing Education segment, we continue to see great results, presenting a net revenue growth of 35% year-over-year.
Once again, after reporting great results on the Digital Health Services revenue, which ended the quarter with an increase of more than 19% year-over-year, reaching more than BRL53 million in the three months period. This result reinforces the great opportunity ahead in the Digital Services and is explained by the strong ramp-up on B2B engagements with new contracts with pharmaceutical industries companies and the continuous ramp-up on B2B contracts. Last but not least, our ecosystem reached 280,005 active users, what represents around 34% of the Brazilian physicians and medical students market. Moving now to Slide number 4. We will talk about our solid business execution within our three business units, starting with the Undergrad segment.
See also 10 Most Undervalued Stocks To Buy and 11 Best Restaurant Stocks To Buy.
To continue reading the Q&A session, please click here.
