Afya : Announces Q1 2020 Financial Statements

Afya Limited

Unaudited interim condensed consolidated financial statements

March 31, 2020

Afya Limited

Unaudited interim condensed consolidated statements of financial position

As of March 31, 2020 and December 31, 2019

(In thousands of Brazilian reais)

	Notes	March 31, 2020	December 31, 2019
Assets		(unaudited)
Current assets
Cash and cash equivalents	5	1,283,109	943,209
Restricted cash	6	14,137	14,788
Trade receivables	7	156,308	125,439
Inventories		5,580	3,932
Recoverable taxes		11,103	6,485
Derivatives	12.1	13,299	-
Other assets		15,923	17,912
Total current assets		1,499,459	1,111,765
Non-current assets
Restricted cash	6	2,053	2,053
Trade receivables	7	12,964	9,801
Other assets		23,219	17,267
Property and equipment	10	157,297	139,320
Investment in associate	9	47,936	45,634
Right-of-use assets	12.2.2	334,221	274,275
Intangible assets	11	1,524,985	1,312,338
Total non-current assets		2,102,675	1,800,688
Total assets		3,602,134	2,912,453
Liabilities
Current liabilities
Trade payables		22,853	17,628
Loans and financing	12.2.1	74,078	53,607
Derivatives	12.2	-	757
Lease liabilities	12.2.2	29,420	22,693
Accounts payable to selling shareholders	12.2.3	154,774	131,883
Advances from customers		33,738	36,860
Labor and social obligations		58,246	46,770
Taxes payable		24,248	19,442
Income taxes payable		2,522	3,213
Other liabilities		192	376
Total current liabilities		400,071	333,229
Non-current liabilities
Loans and financing	12.2.1	16,724	6,750
Lease liabilities	12.2.2	319,159	261,822
Accounts payable to selling shareholders	12.2.3	241,166	168,354
Taxes payable		21,222	21,304
Provision for legal proceedings	22	6,795	5,269
Other liabilities		3,295	1,999
Total non-current liabilities		608,361	465,498
Total liabilities		1,008,432	798,727
Equity
Share capital	16	17	17
Additional paid-in capital		2,300,513	1,931,047
Share-based compensation reserve		26,554	18,114
Retained earnings		215,732	115,916
Equity attributable to equity holders of the parent		2,542,816	2,065,094
Non-controlling interests		50,886	48,632
Total equity		2,593,702	2,113,726
Total liabilities and equity		3,602,134	2,912,453

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

F-2

Afya Limited

Unaudited interim condensed consolidated statements of income and comprehensive income For the three-month periods ended March 31, 2020 and 2019

(In thousands of Brazilian reais, except earnings per share)

	Notes
Net revenue	18
Cost of services	19
Gross profit
General and administrative expenses	19
Other expenses, net
Operating income
Finance income	20
Finance expenses	20
Finance result
Share of income of associate	9
Income before income taxes
Income taxes expense	21
Net income
Other comprehensive income
Total comprehensive income
Income attributable to
Equity holders of the parent
Non-controlling interests
Basic earnings per share
Per common share	17
Diluted earnings per share
Per common share	17

March 31, 2020	March 31, 2019
(unaudited)	(unaudited)
272,304	144,578
(89,251)	(54,364)
183,053	90,214
(86,723)	(31,234)
(59)	(206)
96,271	58,774
30,013	5,167
(18,859)	(12,236)
11,154	(7,069)
2,302	-
109,727	51,705
(6,057)	(2,229)
103,670	49,476
-	-
103,670	49,476
99,816	41,535
3,854	7,941
103,670	49,476
1.09	0.72
1.09	0.71

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

F-3

Afya Limited

Unaudited interim condensed consolidated statements of changes in equity For the three-month periods ended March 31, 2020 and 2019

(In thousands of Brazilian reais)

Balances at December 31, 2018

Net income

Total comprehensive income

Capital increase with cash

Capital increase from corporate reorganization Share-based compensation

Dividends cancelled

Allocation to additional paid-in capital Balances at March 31, 2019 (unaudited)

Balances at December 31, 2019

Net income

Total comprehensive income

Issuance of common shares Shares issuance cost Share-based compensation

Dividends declared to non-controlling interests Balances at March 31, 2020 (unaudited)

		Equity attributable to equity holders of the parent
	Additional	Share-based		Retained			Non-
Share	paid-in	compensation	Legal	earnings	Retained		controlling	Total
capital	capital	reserve	reserve	reserve	earnings	Total	interests	equity
315,000	125,014	2,161	7,223	52,584	-	501,982	88,372	590,354
-	-	-	-	-	41,535	41,535	7,941	49,476
-	-	-	-	-	41,535	41,535	7,941	49,476
150,000	-	-	-	-	-	150,000	-	150,000
122,062	137,051	-	-	-	-	259,113	-	259,113
-	-	1,041	-	-	-	1,041	-	1,041
-	-	-	-	-	4,107	4,107	-	4,107
-	33,001	-	-	(33,001)	-	-	-	-
587,062	295,066	3,202	7,223	19,583	45,642	957,778	96,313	1,054,091
17	1,931,047	18,114	-	-	115,916	2,065,094	48,632	2,113,726
-	-	-	-	-	99,816	99,816	3,854	103,670
-	-	-	-	-	99,816	99,816	3,854	103,670
-	389,170	-	-	-	-	389,170	-	389,170
-	(19,704)	-	-	-	-	(19,704)	-	(19,704)
-	-	8,440	-	-	-	8,440	-	8,440
-	-	-	-	-	-	-	(1,600)	(1,600)
17	2,300,513	26,554	-	-	215,732	2,542,816	50,886	2,593,702

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

F-4

Afya Limited

Unaudited interim condensed consolidated statements of changes in equity For the three-month periods ended March 31, 2020 and 2019

(In thousands of Brazilian reais)

	March 31,	March 31,
	2020	2019
	(unaudited)	(unaudited)
Operating activities
Income before income taxes	109,727	51,705
Adjustments to reconcile income before income taxes
Depreciation and amortization	24,947	9,054
Allowance for doubtful accounts	6,332	3,803
Share-based compensation expense	8,440	1,041
Net foreign exchange differences	(1,201)	(1,115)
Net (gain) loss on derivatives	(14,055)	1,966
Accrued interest	5,781	334
Accrued lease interest	9,900	6,418
Share of income of associate	(2,302)	-
Provision for legal proceedings	816	(874)
Changes in assets and liabilities
Trade receivables	(35,564)	(8,710)
Inventories	(1,648)	(92)
Recoverable taxes	(4,615)	(632)
Other assets	(767)	(14,830)
Trade payables	4,479	6,833
Taxes payables	3,183	3,824
Advances from customers	(14,116)	1,479
Labor and social obligations	7,005	3,585
Other liabilities	1,111	(4,760)
Income taxes paid	(6,057)	(1,297)
Net cash flows from operating activities	101,396	57,732
Investing activities
Acquisition of property and equipment	(17,676)	(8,815)
Acquisition of intangibles assets	(3,172)	(832)
Restricted cash	651	-
Payments of accounts payable to selling shareholders	(9,458)	(8,759)
Acquisition of subsidiaries, net of cash acquired	(102,811)	1,548
Loans to related parties	-	(140)
Net cash flows used in investing activities	(132,466)	(16,998)
Financing activities
Payments of loans and financing	(1,316)	-
Issuance of loans and financing	911	-
Payments of lease liabilities	(11,735)	(7,670)
Capital increase	-	150,000
Proceeds from issuance of common shares	389,170	-
Shares issuance cost	(19,704)	-
Dividends paid to non-controlling interests	(1,600)	-
Net cash flows from financing activities	355,726	142,330
Net foreign exchange differences	15,244	-
Net increase in cash and cash equivalents	339,900	183,064
Cash and cash equivalents at the beginning of the period	943,209	62,260
Cash and cash equivalents at the end of the period	1,283,109	245,324

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

F-5