Afya Limited Issues Guidance for 2nd Half of 2019
Afya’s management disclosed guidance in order to clarify that the combination of 1H19 results and the guidance for 2H19 are in line with expected Pro Forma Adjusted EBITDA above
2H 2019 Guidance:
|Guidance for 2H19||Important considerations|
|Pro Forma Net Revenues is expected between R$415 million and R$430 million||
|Pro Forma Adjusted EBITDA margin is expected between 38% and 40%||
Reconciliation of 1H19 Pro Forma Net Revenues for 1H19 and Guidance for 2H19 Pro Forma Net Revenues is expected between
|Net revenues references||R$mn||Sources and other information|
|A) Afya historical net revenues for 1H19||323.1||2Q19 financial statements: Income statements|
|B) Guardaya (MedCel) net revenues pre-acquisition||34.7||2Q19 financial statements: Note 4|
|C) FASA net revenues pre-acquisition||20.1||2Q19 financial statements: Note 4|
|D) IPEMED net revenues pre-acquisition||24.4||2Q19 financial statements: Note 4|
|E) Afya pro forma net revenues for 1H19||402.2||E = A+B+C+D|
|F) Afya net revenues guidance for 2H19||415.0 to 430.0||Range|
|G) Implied pro forma net revenues for FY19||817.2 to 832.2||G=E+F|
Given the 1H19 results and the 2H19 Guidance numbers above, Pro Forma Net Revenues for the full year of 2019 is expected between
Reconciliation of 1H19 Pro Forma Adjusted EBITDA for 1H19 and Guidance for 2H19 Pro Forma Adjusted EBITDA margin is expected between 38% and 40%. Please note that it is important to consider that we eliminate the impact of the adoption of IFRS 16 in 2019 and these figures exclude the adjusted EBITDA of IPEC or any other acquisition that may be concluded in 2H19.
|Adjusted EBITDA references||R$mn||Sources and other information|
|A) Afya historical adj EBITDA for 1H19||122.2||2Q19 earnings press release|
|B) Guardaya (MedCel) adj EBITDA pre-acquisition||23.1||2Q19 earnings press release|
|C) Afya pro forma adj. EBITDA for 1H19 as reported||145.3||2Q19 earnings press release (C=A+B)|
|D) FASA+IPEMED adj. EBITDA pre-acquisition*||5.1||Internal management records from acquired companies|
|E) Afya pro forma adj EBITDA for 1H19||150.4||E = C+D|
|F) Implied Pro Forma Adj EBITDA guidance for 2H19||157.7 to 172.0||Margin range between 38-40%|
|G) Implied Pro forma adj. EBITDA for FY19||308.1 to 322.4||G=E+F|
|* FASA (JAN/1/2019 to APR/3/2019); IPEMED (JAN/1/2019 to MAY/8/2019)|
Given the 1H19 results and the 2019 Guidance numbers above, Pro Forma Adjusted EBITDA for the full year of 2019 is expected between
What is expected to support a higher performance in 2H19 vs 1H19?
- The maturation of several medical schools is expected to result in a higher enrollment base in 2H vs 1H of each year. For instance, our medical school enrollment base totaled 6,300 students as of the end of
August 2019compared to 5,550 students as of end of June 2019.
- We expect to improve efficiencies and extract synergies of companies acquired along 2Q19 (FASA and IPEMED), which is expected to improve revenues and margins of such companies in 2H19.
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Forward – Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements other than statements of historical fact could be deemed forward looking, including risks and uncertainties related to statements about our competition; our ability to attract, upsell and retain customers; our ability to increase the price of our solutions; our ability to expand our sales and marketing capabilities; general market, political, economic, and business conditions, and our financial targets such as revenue, share count and IFRS and non-IFRS financial measures including gross margin, operating margin, net income (loss) per diluted share, and free cash flow.
We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. The achievement or success of the matters covered by such forward-looking statements involves known and unknown risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward looking statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements represent our management’s beliefs and assumptions only as of the date such statements are made. Further information on these and other factors that could affect our financial results is included in filings we make with the
Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements, which are prepared and presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board—IASB, we use Pro Forma Adjusted EBITDA information for the convenience of investors, which is a non‑GAAP financial measure. A non‑GAAP financial measure is generally defined as one that purports to measure financial performance but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measure.
We calculate our Pro Forma Adjusted EBITDA as pro forma net income plus/minus net financial result plus income taxes expense plus depreciation and amortization plus interest received on late payments of monthly tuition fees, minus payment of lease liabilities plus share‑based compensation plus/minus non‑recurring expenses.
We present Pro Forma Adjusted EBITDA because we believe these measures provide investors with a supplemental measure of the financial performance of our core operations that facilitates period‑to‑period comparisons on a consistent basis. The non‑GAAP financial measures described in this press release are not a substitute for the IFRS measures of earnings. Additionally, our calculations of Pro Forma Adjusted EBITDA may be different from the calculations used by other companies, including our competitors in the education services industry, and therefore, our measures may not be comparable to those of other companies.
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