Lucca Marquezini: Good evening, everyone. Thank you for taking our question. Just, we’ve been hearing from other players that intake volume has been flattish so far in the first half intake cycle for this year, mainly due to not only a strong comparison base, but also due to the top down scenario as a whole. So, can you provide us with some color on the intake so far and if you have been seeing the same trends for Vitru? Thank you.
Carlos Freitas: Thanks, Luca, for the question. In our case, what we have been seeing so far is a growth in intake. So, the first until now, until today, 24th of March, we have a low-double-digit growth in intake compared to the first semester of last year, the first same period of last year, in fact, about low-double-digit growth in intake and more or less flattish tickets for intake. That’s what we’ve been seeing. So, it seems that we are growing more than the market. Again, given the quality of our offerings.
Lucca Marquezini: That’s very clear. Thank you, Carlos.
Carlos Freitas: Thank you, Lucca.
Operator: The next question is from Caio Moscardini, Santander. Caio, we’ll open your audio so that you can ask a question. Please you may proceed.
Caio Moscardini: Good afternoon. Thanks for taking my question. I have two questions here. One, in regards to regulation, right? One of the discussions that we have been hearing is that the Ministry of Education could implement a minimum number of professors per student, right? So I would like to ask, how can you protect yourself if something goes on that direction, right? And you have to increase the number of professors that you have, to achieve a certain minimum we don’t know, right? And the other question is in regards to leverage, right? What is your expectation in terms of net debt to EBITDA during 2024? What level could you achieve in the end of 2024? Pure thinking, just purely organic here. So, thank you for the opportunity.
Carlos Freitas: Thank you, Caio. So, regarding the second question about leverage, we keep on expanding EBITDA and also reducing net debt given that we generate more free cash flow than accrued interest. So, our net debt will go down over time. So, the net debt will be lower in December of this year than it was December last year. So, our expectation that this ratio of net debt over adjusted EBITDA will be at around 2%, around 2% by the end of December of this year. And again, not taking into account leasing expenses in the debt, but take into account leasing expenses as an expense in the EBITDA. So, the way banks use it to calculate the covenant. So, around 2% today, we are 2.9% and this will go down at around more or less 0.2 points per quarter more or less.
I mean and for regulation, I mean regarding the number of professors or students per professor, this is not a requirement for the Ministry of Education. When this was when the requirements were defined a few years ago, there was no indication, there was no requirement about having a minimum number or maximum number, sorry, of professors or sorry, maximum number of teachers of students per professor, sorry. So, what we have been doing is that we are quite, I’d say, at ease with this issue. We have the academic agents, which are also tutors. So, the regulation mentions academic agents which are professors and tutors. And we have today more than 3,500 tutors throughout Brazil. So, this is what is required to have academic agents. There’s no such requirement such as you cannot have more than x students per processor.
So otherwise, we will not be complying a law. So, how can I not comply a law if there’s no law? There’s no maximum ratio. So we’re quite, I’d say, comfortable with that. And, that’s why we showed that anyway, when we see the CC, the course concepts, that the Ministry of Education itself gives to every institution and to every course in fact that I’m putting here as well in the screen on Page 12, you see that 61% of our course have a CC5 and 99% of our courses have a CC4 or CC5, sorry. So, this is just an illustration that I mean, we are not very worried about it.
Caio Moscardini: That’s very clear, Carlos. Thank you very much. And, good evening.
Carlos Freitas: Thanks, Caio. You too.
Operator: [Operator Instructions] The next question is from Bruno Gebara, Tarpon. Bruno, we’ll open your audio so you can ask a question. Please proceed.
Bruno Gebara: Hi all, thanks for taking the question and congrats on the results. I have a specific question. I know it was not part of the discussion here, but it’s related to churn. If there is any change in churn in 2024? And, if you could give us some information on that? Thank you very much.
Carlos Freitas: Thank you, Bruno, for your question. Regarding churn and retention rates, that’s an important issue. When you compare the fourth quarter of last year with the fourth quarter of ‘22, there was a slight improvement in deterioration in this retention rate, both at UniCesumar and Uniasselvi. And so this is, I think, the start of this recovery process. We had a deterioration of this retention rate in the last years, given the economic situation, etcetera, given off our growth. And now even I mean, despite the fact that we are growing a lot and we had this important intake also last year, we managed to decrease it slightly, but the trend is positive, the churn. So, and I mentioned the intake because most of the churn is related to newcomers, to new students.
