Afya Limited (NASDAQ:AFYA) Q3 2023 Earnings Conference Call November 13, 2023 5:00 PM ET

Company Participants

Renata Couto - IR Executive Manger

Virgilio Gibbon - CEO

Luis Blanco - CFO

Conference Call Participants

Lucas Nagano - Morgan Stanley

Marcelo Santos - JPMorgan

Lucca Marquezini - Itau BBA

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.