Afya Limited Provides Business Update Relating to COVID-19 Outbreak

Rhea-AI Summary

Afya Limited (Nasdaq: AFYA) updated shareholders on the impact of COVID-19 on its operations. The company successfully transitioned many educational activities online, maintaining positive feedback from students and staff. Practical classes for 5th and 6th-year students have resumed, although some earlier year activities may be postponed, affecting revenue recognition. Despite the pandemic, the company reports no increase in payment delinquency and is providing support for families in need. Afya remains committed to delivering quality education and believes in its strong financial position and strategic approach.

Positive

• Transition to online education received positive feedback from students and staff.
• No increase in payment delinquency; improved ratio compared to 2019.
• Resumption of practical classes for 5th and 6th-year students.

Negative

• Postponement of practical activities for 1st to 4th-year students may delay revenue recognition.
• Potential uncertainty regarding the long-term impact of the pandemic on operations.

NOVA LIMA, Brazil, May 22, 2020 (GLOBE NEWSWIRE) -- Afya Limited, or Afya (Nasdaq: AFYA), in order to provide shareholders and the market an update regarding the development of the ongoing COVID-19 pandemic and its impact on business, announces the following:

As previously disclosed to the market on March 17, 2020, we managed to rapidly adapt our business to these unusual times, and although there has been an interruption of our on-campus activities, a significant portion of our non-practical educational activities are being successfully offered to our students through our online platform (rather than on-site) and we have received positive feedback from students, professors and physicians with respect to their digital experience.

Regarding the offering of practical classes, we already resumed to provide in-hospital internships for the 5th and 6th year students, which is the highest portion of our practical curriculum. We expect that some practical educational activities (particularly for students in the 1st. to 4th. years) will have to be replaced during the second half of 2020 postponing our revenue recognition proportionally. Those effects were already considered in our first semester Net Revenue guidance range.

Since we continue to offer our high quality education to our students through our platform and practical activities for the 5^th and 6^th year, through the same professors, staff and suppliers, we remain regularly charging our standard monthly tuitions fees.  We are also not seeing any impact on the payment delinquency rate of our students, as of today, the accumulated ratio for 2020 is improved, when compared to same period in 2019. Finally, we do not have any current legal decision seeking the establishment of temporary discounts in the monthly tuition fees we charge our customers as a result of the COVID-19 pandemic.

We are committed to deliver the best quality service, minimizing the impact to our students, employees and our local communities during this crisis. Accordingly, we continue to support our students providing special payment conditions for families impacted by the economic crisis; we have released temporary access to our digital platform – MedCel – free of charge for other medical education institutions and have donated masks, gloves and other safety equipment to health departments and hospitals to the 13 cities where Afya’s medical courses are located.

While we are quite aware of the uncertainties created by COVID-19, we remain confident in our strategy, in the financial robustness of our business and in Afya’s contribution of high quality medical professionals who will help our society to overcome COVID-19 and other future challenges.

About Afya

Afya is a leading medical education group in Brazil based on number of medical school seats, delivering an end-to-end physician-centric ecosystem that serves and empowers students to be lifelong medical learners from the moment they join us as medical students through their medical residency preparation, graduation program, and continuing medical education activities.

Investor Relations: ir@afya.com.br   

FAQ

What is Afya's current strategy regarding COVID-19 impact?

Afya's strategy includes transitioning educational activities online and resuming practical classes for advanced students, while maintaining tuition fees.

How has COVID-19 affected Afya's revenue recognition for 2020?

Some practical educational activities for earlier year students are postponed, which may delay revenue recognition.

What measures is Afya taking to support students during the pandemic?

Afya is providing special payment conditions for affected families and offering free access to its digital platform.

How is Afya's payment delinquency rate performing in 2020?

As of now, Afya reports no impact on payment delinquency, with the ratio improved compared to the same period in 2019.