Afya Limited Third Quarter and Nine Months 2024 Financial Results
Impressive Adjusted EBITDA Margin Expansion
Robust EPS Expansion
Expressive Cash Generation
NOVA LIMA, Brazil--(BUSINESS WIRE)--November 13, 2024--
Afya Limited (Nasdaq: AFYA; B3: A2FY34) ("Afya" or the "Company"), the leading medical education group and medical practice solutions provider in Brazil, reported today financial and operating results for the three and nine-month periods ended September 30, 2024 (third quarter 2024). Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial Reporting Standards (IFRS).
Third Quarter 2024 Highlights
--
3Q24 Net Revenue increased 16.3% YoY to R$841.2 million. Net Revenue
excluding acquisitions grew 11.8%, reaching R$808.8 million.
--
3Q24 Adjusted EBITDA increased 25.0% YoY reaching R$347.9 million, with
an Adjusted EBITDA Margin of 41.4%. Adjusted EBITDA Margin increased 290
bps YoY. Adjusted EBITDA excluding acquisitions grew 18.2%, reaching
R$328.9 million, with an Adjusted EBITDA Margin of 40.7%.
--
3Q24 Net Income increased 26.4% YoY, reaching R$124.1 million, and
Adjusted Net Income increased 28.8% YoY, reaching R$165.4 million.
Adjusted EPS growth was 29.9% in the same period.
Nine Months 2024 Highlights
--
9M24 Net Revenue increased 14.4% YoY to R$2,455.3 million. Net Revenue
excluding acquisitions grew 12.9%, reaching R$2,422.9 million.
--
9M24 Adjusted EBITDA increased 24.3% YoY reaching R$1,089.6 million,
with an Adjusted EBITDA Margin of 44.4%. Adjusted EBITDA Margin increased
350 bps YoY. Adjusted EBITDA excluding acquisitions grew 22.1%, reaching
R$1,070.6 million, with an Adjusted EBITDA Margin of 44.2%.
--
9M24 Net Income increased 63.0% YoY, reaching R$494.6 million, and
Adjusted Net Income increased 46.9% YoY, reaching R$626.7 million.
Adjusted EPS growth was 48.7% in the same period.
--
Operating Cash Conversion ratio of 109.7%, with a solid cash position
of R$836.9 million.
--
326 thousand users in Afya's ecosystem.
Table 1: Financial Highlights
Three months period ended September 30, Nine months period ended September 30,
--------------------------------------------------------- -------------------------------------------------------------
(in thousand of 2024 Ex % Chg Ex 2024 Ex % Chg Ex
R$) 2024 Acquisitions* 2023 % Chg Acquisitions 2024 Acquisitions* 2023 % Chg Acquisitions
---------------- ------- -------------- -------- ------- ------------- --------- -------------- ---------- ------- -------------
(a) Net Revenue 841,185 808,763 723,479 16.3% 11.8% 2,455,314 2,422,892 2,146,047 14.4% 12.9%
---------------- ------- -------------- -------- ------- ------------- --------- -------------- ---------- ------- -------------
(b) Adjusted
EBITDA (2) 347,949 328,924 278,393 25.0% 18.2% 1,089,628 1,070,603 876,766 24.3% 22.1%
---------------- ------- -------------- -------- ------- ------------- --------- -------------- ---------- ------- -------------
(c) = (b)/(a)
Adjusted EBITDA 290 350
Margin 41.4% 40.7% 38.5% bps 220 bps 44.4% 44.2% 40.9% bps 330 bps
---------------- ------- -------------- -------- ------- ------------- --------- -------------- ---------- ------- -------------
Net income 124,142 - 98,220 26.4% - 494,641 - 303,530 63.0% -
---------------- ------- -------------- -------- ------- ------------- --------- -------------- ---------- ------- -------------
Adjusted Net
income 165,372 - 128,393 28.8% - 626,683 - 426,675 46.9% -
---------------- ------- -------------- -------- ------- ------------- --------- -------------- ---------- ------- -------------
*For the three months period ended September 30, 2024, "2024 Ex Acquisitions" excludes: UNIDOM (July to September, 2024; Closing of UNIDOM
was in July 2024).
*For the nine months period ended September 30, 2024, "2024 Ex Acquisitions" excludes: UNIDOM (July to September, 2024; Closing of UNIDOM
was in July 2024).
(2) See more information on "Non-GAAP Financial Measures" (Item 08).
Message from Management
We are pleased to announce another quarter of solid results, marked by strong cash generation, consistent margin expansion, and progress in our strategic initiatives. This performance underscores the differentials of Afya's business model centered on the entire physician career and the successful execution of our growth strategy, as we continue advancing our mission to integrate education and digital solutions for the medical journey, enhancing training, updating, assertiveness, productivity, and physicians' connections with the healthcare ecosystem.
Our EBITDA margin expansion was largely supported by the integration of UNIMA and FCM Jaboatão delivered in 4Q23, the ramp-up of the four Mais Médicos campuses launched in 3Q22, restructuring efforts within the Continuing Education and Medical Practice Solutions, and improved cost management in Selling, General, and Administrative expenses.
This quarter, we completed the acquisition of Unidom adding 300 medical seats, strengthening our presence in Salvador, one of Brazil's largest cities. Through dedicated efforts, we achieved a robust medical students' intake at Unidom with more than 300 students enrolled in the 2(nd) half just one month after the acquisition, reinforcing the impact of our ecosystem and brand recognition throughout the country.
Additionally, we received authorization from Brazil's Ministry of Education ("MEC"), to increase 80 medical seats at UNIMA and the reconsideration of 10 medical seats at Unigranrio in Rio de Janeiro, bringing our total approved seats across all campuses to 3,593. These expansions are aligned with our commitment to providing access to quality medical education and meeting the demand for healthcare professionals.
During our Afya Day event in October, we also announced a projected 5.1% increase in tuition fees for new students in 2025, above inflation expectations for 2024, which reflect the continued strength of our value proposition and the recognition of our brand.
For the nine-month period, Net Revenue increased across all three segments. For Medical Practice Solutions we have seen a robust 15% increase in Net Revenue compared to the nine-month period of the prior year. Reaffirming the immense potential of our Solutions.
For our Undergrad segment, Net Revenue grew by 14% when compared to the same period last year. Mainly supported by medical tickets increasing above inflation, the maturation of the medical seats, in addition to the acquisition of Unidom and increase of medical seats approved. Afya has concluded a very successful intake process in 2024 with more than 6 candidates per seat considering all 32 campuses reflecting the strengthening of Afya's brand recognition and reputation among the medical community.
In our Continuing Education segment, we are also proud to see another year of organic growth. Net Revenue increased over 10% in the nine-month period. Through a robust intake process, with the establishment of four new campuses in 2024 alone, we can see once more, our students, employees, and partners benefit from our constantly developing ecosystem.
It is worth mentioning that our ecosystem has reached today 326 thousand active users, adopting at least one of Afya's solutions. This achievement is complemented by a high level of satisfaction, reflecting the strong recognition and trust in Afya's brand and its ecosystem
Our commitment to high-quality education and comprehensive support for healthcare professionals remains at the core of our mission. Afya's focus on operational excellence, strategic expansions, and sustainable growth positions us for continued success. We remain steadfast in our vision to transform health together with those who have medicine as a vocation, leveraging our ecosystem to create long-lasting value for all stakeholders.
1. Key Events in the Quarter:
--
On July 1, 2024, Afya Participações announced the closing of
its acquisition of 100% of the total share capital of Unidom
Participações S.A. ("Unidom") which encompasses Unidompedro and
Faculdade Dom Luiz, both located in the State of Bahia with operations in
the cities of Salvador, Luis Eduardo Magalhães, Barreiras and
Ribeira do Pombal.
The acquisition contributes 300 operational medical
school seats to Afya in Salvador, one of Brazil's largest cities. The
authorization request for these 300 seats was made to MEC before the Mais
Médicos' Law was enacted and MEC concluded its analysis and issued
Ordinance 630/2020 ("Ordinance") in 2020 to partially authorize the
operation considering 125 medical seats. In 2021, as a result of a
judicial order, MEC reviewed the Ordinance to authorize the 300 seats
initially requested by Unidompedro. Said decision was confirmed by a
judgment in 2023. Currently, Unidompedro has 300 seats authorized, of
which 125 are final and 175 are subject to a final conclusion of the
aforementioned court proceedings.
The aggregate purchase price
(enterprise value) was R$660.0 million, and the estimated Net Debt was
(MORE TO FOLLOW) Dow Jones Newswires
November 13, 2024 17:46 ET (22:46 GMT)
Comments