The second quarter 2022 earnings conference call. Joining us today are Mr. Jorge Pinheiro and Irlau Machado, co-CEOs, Mauricio Teixeira, VP of Finance, Marcelo Moreira, VP of Investor Relations, and Guilherme Nahuz, Investor Relations Director. Should you need simultaneous translation into English, be aware that this is available on our platform. To access it, please click on the Interpretation button, represented by the globe icon on the bottom of the toolbar, and choose your preferred language. For those of you listening to this conference in English, be aware that you have the option to mute original audio in Portuguese. To do so, click on Mute Original Audio. We would like to inform you that this conference is being recorded and will be made available on the company's IR website, where the complete earnings-related material are also available. You can download the presentation on the website as well.
During the company's presentation, all participants will have their microphones disabled. After the company's remarks, there will be a question and answer session. In order to ask a question, please click on the Q&A button on the bottom of your screen and write your name, company, and language to enter the queue. Now, I would like to turn the floor over to the Co-CEO, Irlau Machado, who will begin the presentation. You have the floor, sir.
Thank you. Good morning, everyone. Thank you so much for joining us to our earnings conference call. We're all gathered here together in our Paulista headquarters, Jorge, Marcelo, Mauricio, Guilherme Nahuz, and we're all very happy to be disclosing our results with you today.
In spite of this very challenging scenario, we're very excited about the performance of the Brazilian market and the industry as a whole that is now benefiting 50 million members. Historical records. In the last quarter, all of our indicators, both financial indicators and operational indicators, evolved positively in all of our business lines. There is an important trend here in our organic growth. Now, together with Marcelo, to whom I would like to turn the floor, we will focus on each one of those lines so that we can better understand our numbers this quarter. Marcelo, you have the floor.
Thank you, Irlau. Thank you, Jorge, Marcelo. Good morning, everyone. Let's get started on slide number 2, where you can find a summary of our main financial indicators. This quarter, the highlight was our strong and robust organic growth with improvement of our cash MCR.
Just to make it easier for you, the whole presentation here will show you data of 2021 and 2022. In 2021, we're gonna have the data combined for Hapvida and GNDI. The data for 2022 are covering six months. They include the month of January to make it easier for us to compare this data. Sustainable growth. Our net revenue achieved BRL 6.1 billion, up 8.7% this quarter. This growth will go up to 11.3% when we look at the first half of the year. The main lever here was the expansion in the number of members. We have had an expansion of 6.8% in our healthcare member base. The member base of our dental plans has gone up 12%, achieving here almost 9 million members.
We are an absolute leader in this market. As you can see, quite a solid and sustainable growth in this revenue front. Looking at our costs and expenses, our cash MCR or cash MLR had a reduction of 3.5 percentage points year-over-year. A significant reduction. We are operating at 72.3% MLR right now, which is a benchmark for the industry. A very efficient MLR in terms of managing healthcare costs here for Brazil. In terms of SG&A, we had a 2 percentage point increase. Considering our base in 2021, which, was extremely low at 15% in twenty-one, and there are other factors that impacted this number that we'll talk about during this presentation. As a final result, our EBITDA reached BRL 582 million, a 34% growth.
We're saying this is adjusted EBITDA, but the only adjustment that is made is for non-cash expenses of the stock options. This is quite a significant number that shows how robust our operations are, even in challenging scenarios such as the one we faced since the beginning of the year. Now, moving on to slide number 3. The main topics of our strategic agenda. Let's talk about the advances in our integration. What we can see here on a daily basis is a firm commitment of the whole organization to capture synergies and have a state-of-the-art management governance. Since February, we've had a new board with 100% independent audit committee. In our assembly meeting in April, we elected a fiscal council which is already working.
We have implemented several management committees with company executives, members of the board of directors and external experts that are also helping us on specific topics. More recently, about a month ago, we reported the merger of all of the direct reports to the co-CEOs, except for health operations and integration. You can see the long list here involving human resources, IT, administrative, commercial, financial, legal, lab, including dental. You all know that both companies were already operating at a national level, so all of these areas have been unified now. The goal is to streamline administration activities and to have more agility in the decision-making process. Making it easier for us to capture all synergies. Let's look at the synergies here. In February 2022, we presented a target for monthly and recurring synergy capture.
Our target was of BRL 46 million in synergies in the month of February 2023. These were recurring synergies. This number was going up year after year until it can reach BRL 115 million by February 2025. Now, the good news here is the target of February 2023 has already been identified and it's already scheduled. We already have action plans in place or initiatives in place that make us realize that we will be able to achieve this target by February 2023. We are on this progressive ramp-up to reach those 43. In the second quarter of 2022, we have already captured, and we can already see this reflected on the results, BRL 29 million throughout these three months.
We would like to emphasize that the national solution has been implemented with 64,000 lives already signed, of which 40,000 are active. The individual product in these regions of NotreDame Intermédica has already been extended to 70 new municipalities. We currently have 23,000 active lives on June 30. We have already implemented new tables for purchasing of materials and drugs. At every purchase we make, we already collect synergies of materials, drugs, special materials and inputs. Many important fronts. Supplies as well, when we look at the service perspective, you kn all different types of services. Finally, it's worth mentioning here the cross-accreditation. What do I mean by cross-accreditation? I mean verticalization through network sharing.
That was one of the initiatives that when we announced our synergies in the beginning of this journey, that was one of the things that made us notice that we could have many additional gains. We took a deep dive in each one of the geographies throughout the country, we saw these possible gains, and we have already implemented this. There are many initiatives. As per your request, we did an exercise to break down the synergy of BRL 46 million EBITDA in February 2023 into its three main components. As it is today, in February, BRL 14 million will come from revenue synergies and another BRL 32 million will come from synergies of costs and expenses. This accounts for a gain of 1.2 percentage points in MLR. Especially because of the gains in purchases of materials, supplies, drugs.
Already talking a bit about protocols and the cross-accreditation that I just mentioned. 0.4 percentage points will come from G&A gains. This is broken down for February 2023. Of course, as time goes by, we will see a higher weight of the commercial part coming in, but for now, we can already see this gaining traction very quickly. MLR and G&A synergies mostly here at first. Now on slide 4, we will tell you a bit about our ESG agenda.
Our focus is to have sustainability as a pillar of our development. You all know that a lot has been done at our organization on each one of the fronts, the environmental front, the social front, the governance front. What you can see on the slide is a selection of initiatives that happen almost every day in all of our operations in reaching all of our 70,000 employees. A lot of awareness raising is being done. What I want to highlight here is this table that mentions our goal of becoming carbon neutral by 2023.
You all know that since 2021, NotreDame Intermédica is carbon neutral, has been carbon neutral already, and now it's been six months since our merger, and we are now making a public commitment to make the entire Hapvida NotreDame Intermédica group carbon neutral in 100% of our operations by 2023. This is a very bold goal, but it is a goal that makes us all very, very proud, because we know that we are contributing not only to a more sustainable planet, but also to the spread of values that are in tune with the demands of society for the whole productive sector and the industry. The healthcare industry could not be any different from that. This is really important to us and we're very proud of this pioneering movement. Okay.
Now let's talk about our results on slide number 5, starting with our net revenue. We have had solid organic growth, especially boosted by our healthcare plans. We grew both in our Hapvida operations and our NotreDame Intermédica operations. We grew in all of our business lines. As you can see there, hospital services has had growth, dental plans have had growth. Mostly the main lever here was our healthcare plan operation, our main operations that grew almost 10%. This 10% growth is a growth that, as I said, was boosted by an increase in the average number of members at our company since the average ticket is still influenced by the scenario we faced in the last 18 months, a scenario of relative stability. Let us see this in more detail. In the next slides.
For now, I would like to focus on dental plans, where we saw a growth of almost 12% of our member base with almost 750,000 members that were added to our platform, our dental platform. Our average ticket had a reduction of 8.6%. This is something that you all know, in the last 18 months, I think that M&As that we did in fact have opened an incredible opportunity for our company to promote cross-selling. We try to do that, obviously at the cost of this lower average ticket. To sell to our members health plans and dental plans brings benefits not only regarding margin, because they do contribute to a greater margin, but also to have the fidelity of our customers. We are very happy with the things we have conquered in this dental front.
Now about the health plans on slide six. Talking about our in fact, the increase of our member base was the real reason for our growth in the last 12 months. Now what we can see is that we have an acceleration of the organic growth. Looking at the table on the left side, we are really happy to see 139,000 new members regarding organic addition in this quarter only, which is a target that represents a very important number for us and was really pursued by all fronts. We had already been telling you that we could see an improvement in this competitive dynamics. This is the result. 139,000 lives included in this quarter.
I would like to emphasize that this growth is a really nice target for the quarter, but it's also consistent. Why? Because in several fronts, what we see is this growth that is happening in our more mature markets. We are also seeing an increase in the PNA, in particular in the south and southeast region of the country, which is very robust and has a lot of attraction. We are also seeing what we decided to do, which is this additional solution, has already brought results in such a short period of time. With this buy-in from our customers, they're buying this product, and also the expansion of the individual plans within this NDI network. This plurality and this growth is something that give us a lot of confidence in the months and quarters to come.
About the average ticket on slide seven. The good news regarding average ticket is that we are starting a new readjustment cycle as of May 2022. When we analyze the average ticket in an organization like ours, we have a lot of activities and M&A, it's very important to break down the average ticket. When we do this, what can we see? We can see that in price-mix, we had a 2.2% growth over the last 12 months. We know that this 2.2 is not enough for the cost phenomenon that we are observing, but it's acceptable. This is something that when we look back, it's different from what we see when we look forward. We should also emphasize the impact of individuals or individual impact as 1.5% less, and M&As that normally always bring lower average ticket.
In this case, we are analyzing this period with 668,000 lives, with average ticket of BRL 166. We can see that we have some outpatient products, Serpram, Promed Premium, that have helped to compress our average ticket. This stable average ticket scenario has pervaded all the health industry and was already happening for more than 18 months. The good news is that this cycle has been completed and we are now entering a new era. You can see that we are trying to include readjustment as of May 2022 from 60.2% to 18.5% for PME products, 15.5% in individual products, and 16% for adhesions or affinities.
These readjustments are being included in our revenues and also in our results in the last next job bumps, and they account for 55% of our revenue. We have already a readjustment for more than half of our revenue, and we still have to include corporate products. As you know, this is a case-by-case basis analysis based on the real and effective MLR table. We are promoting these readjustments in a more robust manner, based on these changing scenarios. As we change cycles, we can see that this has been observed in all fronts. As to readjustments, this will be very important to improve our MLR. To a company like ours, they are not the single tool that we have.
Different from other players, Hapvida, NotreDame Intermédica, do not depend only on readjustment to correct for MLR. I think we have a weaponry of tools, actually. Let's check our earnings in this second quarter. In the second quarter, we had an MLR of 72.3% compared to the same period in the previous year is a gain of 3.5 percentage points. Compared to what we had in the last quarter is an increase of 0.6 percentage points, and comparing to the full quarter is 2.6 percentage points of gain. It doesn't matter how you wanna look at it, our MLR has improved in the second quarter. I would like to include another data. We know that seasonally, the second quarter historically is higher than the first one.
Check this table and see how interesting it is to see that in BRL, in nominal values, our total MLR dropped from BRL 4.6 billion to BRL 4.5 billion. This is not only a percent reduction. We are talking about lower MLR or a reduction in MLR. I think this breaking down of our cash MLR shows that 72.3 is something that we still see as like an outlier. The COVID cost itself has had an impact in the quarter in 1 percentage point. The negative readjustment of individual plans has also impacted by 1 percentage point. We also had 0.9 percentage points of this higher MLR of companies that were acquired. That requires greater verticalization over time.
In the second quarter, the impact of the capturing of synergies is still low or small, but over the course of the next quarters, we believe this will be more relevant, progressively more relevant. The COVID costs and readjustments, negative readjustments are improvements that over the course of the next quarters shall be captured. The major opportunity that we can see is on the MLRs of the companies that were acquired using our strategies. I think that on slide nine we have complementary data. It's almost a self-explanatory slide. On the left side, we can see the result of Hapvida operations verticalization, and on the right, NotreDame vertical. On the top of this page, what can we see?
We can see clearly that Hapvida operated in high standards, the best in the industry regarding verticalization, reaching 96% of verticalizations of hospital admissions and consultations. In the NDI operations, we can see this progressive increase of verticalizations as we have been working in the last few years. It's interesting to see that on the lower part of this table, both companies have put a lot of M&A efforts to expand their operations beyond their frontiers and entering new territories. The results show that we have a dilution of our verticalization. This is the work that is being done by all the operations in each geography, trying to analyze what needs to be verticalized, a hospital, a diagnostic unit, oncology, low cost, high cost. This is the permanent work that is being done by our team, operational teams.
I believe that in this view, I would like to show you and talk about our proprietary network, because in the current scenario of health in Brazil, this verticalization strategy that we have adopted with medical quality, modern infrastructure is fundamental for us to be able to face this challenge of delivering good quality health at affordable prices. This is our new hospital in Brasília. It has been inaugurated in April 2022. We had P.A. Salvador open in São Paulo, Hospital Mandacaru, PA in Cidade Nova, Rio de Janeiro. Several regions with an infrastructure that's really something that should be envied. With beautiful units, well-planned regarding flow and agility and productivity with efficient investments.
I think we should emphasize these two units on the top of the page to give you an overview of the different time points of a company that has a national presence. The Hospital Brasília is the first one in the region of Brasília. Hapvida was growing in Brasília. We also had lives in Brasília, the GNDI. Now we have not only a tool for verticalization of the high complexity of our businesses, but also a flag, something that can help us to grow in this region. Comparatively, P.A. Salvador. What happens when we have an area with a density of members such as the city of São Paulo in the eastern side of the city? In this case, I believe you all know Hospital Salvador, and this was our objective to eliminate this outpatient services of 46 new services that have been inaugurated.
We are taking this away from Hospital Salvador to create a higher complexity structure to gain scale and benefits. I believe that in summary, this improvement of costs with quality in a company such as ours is a continuous thing. It happens in new markets where we have entered, and it's also something that can happen in these more mature regions where we are operating. Well, moving on to slide number 11 now. Our admin expenses and selling expenses, SG&A. Starting with administrative expenses, they reached 9.6% in the second quarter, which is slightly higher than in the last two quarters, where we achieved 9.3% and 9.2%.
When we break down to see the main factors that led to this improvement of 0.2% and 0.3%, what we can see is that this is very much related to our efforts, almost investments that we have been making, not only in integrating those companies, but also in IT. We are going now into a critical phase to complete several extremely important projects, and this is the third-party service line that is growing the most. Now, comparing to the second quarter of 2021 would be a bit unfair because it was an outlier, especially because in that quarter we had a reversion of contingencies when the normal thing is to have a certain level of contingency expenses. Now, in terms of administrative expenses, my main message is. We are aware of this. We're paying attention to this.
We see this as fixed costs that must be diluted. On a daily basis here, we notice that there are many opportunities. This is a commitment to discipline that we make here, again, with all of you. Now, in terms of commercial expenses, you can see that the last three quarters have been stable at around 7.5%. I only have two brief comments about this. The first is that we have promoted a reallocation throughout the whole historical period that you can see here of two lines, which are marketing and advertising and PDD. They leave from G&A and they go to commercial expenses. This movement happened in all lines, and in this comparison, this has not been affected by that. Just a clarification.
Now, another important comment is looking at the commercial expenses is that we continue to see a stable delinquency level. We have not seen any pressure here for delinquency. That's another indicator that we monitor, and we have not seen any increases in that level. The last comment about this slide, I just want to emphasize that in administrative expenses, we're showing cash administrative expenses, and the only adjustment we make here are for stock options. That is the accounting expenses of the stock options, which was BRL 144 million this quarter. In the third quarter of 2022, we expect to have a similar level of BRL 130 million-BRL 140 million. Starting in the fourth quarter, we have a drop to around BRL 60 million-BRL 70 million. A significant drop. That is part of our amortization schedule, stock option.
This is related to the vesting period. In the last quarter of the year, we expect to see a significant decrease in that line. About our EBITDA. Now moving on to slide number 12. The improvement in MLR was what boosted our EBITDA growth, which was 34% better than last quarter, achieving 9.6%. I will not mention the leverage because we covered that already, but I want to highlight our adjusted net income. As you can see, we are reporting a net loss of BRL 312 million. I know how important net income is, and I know that many of you monitor this number, but net income is always seen as a proxy of cash flow.
In this case, particularly, we have two factors that have been negatively affecting our net income, which is the SOP amortization and the intangible amortization of all of the M&As that have been done that have an important weight, but that have no cash impact. We're looking at the adjusted net income, which this quarter was BRL 241 million. Now, when you have net income tax, the result is depreciation, and then we get to that EBITDA level. Since we're talking about cash, we had a strong EBITDA conversion into cash, and we have had that even in challenging periods. You can see that the cash flow of our operations this quarter achieved BRL 569 million. We invested BRL 168 million to open these beautiful units.
We had a cash flow of BRL 401 million. Now, the last two comments that should be made. First is about the lengthening of our debt profile. Mauricio, Rodrigo, and the whole team have completed this quarter, in the month of May, the issuance of a new debenture worth BRL 2 billion. This issuance of debentures was really important to us, not only to lengthen our debt profile, because some of the debts would mature in 2022, 2023 and 2024, and they will now mature in 2028 and 2029, but mostly to reduce the cost of debt. In this case, specifically, this debenture was captured at CDI of 0.6, and we paid for debts that had a 2.5 CDI.
The global cost of debt went from 1.79 to 1.69, and the average duration of our debt went to 4 years. That was a major effort that is being added to other efforts that have been made, such as the issuance of CRI, lengthening our debt to 2031. Now we are on this trajectory to recover our profitability levels. This is another hard work that has been done by the team to perform a thorough assessment of our goodwill balance. We divided this into two groups. The M&As before February 2022, we have almost BRL 14 million that are being used and will continue to be used as we incorporate all of the M&As that we made. This is a healthy balance that is being used and that we plan to use until 2024, 2025.
After that, we'll have a new coverage, this shield of almost BRL 30 billion that comes from the merger of Hapvida and NotreDame Intermédica. The schedule will cover the years up until 2031. We were telling you that we saw an efficient fiscal structure to the next 6-7 years, but now we think that this is going to be, you know, covering the next 9 years as well. Now I close my part of the operations, and I turn the floor over to my colleague. That was great, Marcelo. Congratulations on your presentation. It was very clear. You shared so much data that most of the investors wanted to see. The team got organized to meet their needs in the best way we could.
Lau and I would like to thank you all for joining us in today's call. Just a quick reminder to all of you, I just want to emphasize what has already been said. We are reporting results for the second quarter, which was hard hit by the COVID-19 pandemic, as you all know. We'd like to thank the over 70,000 employees who worked diligently to serve all of our patients on time with a warm service and the high quality service that we provide. Thank you all very much. This quarter was still hard hit by the negative readjustments. The month of April, for example, had a higher impact on all of our customer base that had a negative readjustment of 8%. This quarter, we also had inflation pressures.
In spite of this very challenging context, the company has shown, because of the strength of its model and the discipline of its teams, the company has presented satisfactory and positive numbers. With organic growth in a country that is resuming growth, and Hapvida and GNDI are leaders in this movement, gaining market share more than any other competitor, which proves how attractive our products are. Now, the second point, of course, is the control of our MLR levels. Considering all of our conditions, a verticalization, integration, tooling, knowledge, technology, know-how, the company is, you know, highlighted in MLR control. Finally, this is a quarter that has started to capture synergies, and we have been sharing important numbers of synergies coming from the commercial area, synergies coming from SG&A costs, and so on and so forth. We're very happy about the results.
Of course, we have not yet reached historical MLR levels because of this whole environment that is surrounding us, but we're very confident that we are on the best track to make a difference and deliver high quality healthcare at an affordable price. We're now opening for questions, and we are available to all of you for any other clarification you might need. Thank you all very much.
Let's now start the Q&A session for investors and analysts. If you wish to pose a question, please click on the Q&A icon at the bottom toolbar of your screen and write your name, company, and language to enter the queue. When your name is called, a request to unmute your microphone will appear on your screen. Please unmute your mic to ask your question, and please ask all your questions at once. Let's start with our first question by Vinicius Figueiredo, sell-side analyst from Itaú BBA. We're going to unmute your mic so that you can ask your question. Vinicius, you have the floor.
Good morning, everyone. Can you hear me?
Yes, we can hear you just fine.
Okay, great. Thank you for taking my question. Now, the MLR behavior, as you well said, was positively surprising, especially after we saw the results of other listed companies in the industry. I'd like to understand whether you think that this verticalized model with this more coordinated care, you already anticipated this resumption of, the procedure volume that has been affecting the industry so much. Or can you channel this spike in frequency better to distribute it throughout the coming quarters? Now, another point here. I would like to understand whether the increase in more verticalized healthcare plans in the Belo Horizonte operations, 'cause you said that in the Hapvida vertical, the share of these plans has been increasing and also the gain of co-payment products. Are they significant enough to help you reduce the MLR this coming quarter? Thank you very much.
Vinicius, thank you very much for your questions. Yes. I believe our company, Hapvida, as always, behaved within the major guidelines for verticalization and has integrated its units for the company to be protected from volume oscillations. This is what we saw over the course of this second quarter. While we had a lot of requests for emergency services in the whole country, almost simultaneously, and almost everyone have done this. People who were affected with COVID symptoms and other viral diseases, for the most part, have sought services, our services. Given our models of digital platforms that had an important impact in this period and different integrations that brought us more effectiveness from outpatient services to hospitals in a continuous process of verticalization.
As Marcelo has alluded to, we still are inaugurating new units over the last few months in São Paulo, Rio de Janeiro, Belo Horizonte, and Brasília, or in Recife and Manaus, among other regions and cities. Our plan of verticalization is ongoing. It's a continuous process. This protects our company due to the use of technology and modern tools for prevention. This allow us to be protected, even though we are offering a volume that's more or higher than the usual one, that's what we saw in the second quarter. We are confident in our trajectory. It's important to remember that the second and third quarters have these characteristics of having a higher volume. We also expect that over the next few months, fourth quarter or first quarter of the next years, we will be able to recompose our average ticket.
Combined with the return of our current volumes, we observe volumes that are close to historical levels, and this brings us a lot of confidence that we are on the right track to achieve our MLR levels. Verticalization, as I said, in Belo Horizonte, we had synergies in CapEx, and they have just inaugurated a huge unit in Betim of emergency services that will service both verticals in one single regional command with a lot of synergy. We will benefit from this. Our ongoing dynamic work when we have inflation, as usual, to implement co-pay, which is very effective and is something that pleases our contractors and satisfies their needs and regulates, in a more intelligent manner, our MLR.
Excellent, Jorge. Thank you very much for your answer. I would like to congratulate you on the content of your presentation, which was very complete, and your comments were very useful. Thank you.
The next question is from Fred Mendes, Analyst from Bank of America. We will open audio for you to ask your question. Fred, you can go ahead.
Thank you. Good morning. Can you hear me? Thank you. I have two questions. I think the first one, it seems to me that in this quarter in particular, we had some big contracts that were concluded, completed. Just for me to understand the dynamics, the McDonald's contract, is this already included in the national plan? This is the first point. Was there already any kind of prior negotiations in this respect? Or was it something that was started when you launched the national plan in a short term for you to close or complete the second contract?
The second question, as Marcelo has alluded to in his second slide in his presentation with detailed explanations about synergy, I would like to know if that BRL 46 million was based on the base case that you had initially or you have been reviewing. In the initial presentation, we had an upside of things that were presented. For me to understand how this synergy connects to the first slide on synergy. Thank you. First of all, regarding contracts. The interesting point is the quality of the growth, the organic growth that we are achieving, which is something that we see in our operations as a whole, in PNA, individual, in affinity and corporate plans. In all lines we can see a similar growth and this is something that encourages us very much.
In the case of McDonald's, though, in reality we were able to make this possible. I won't give many details about negotiation with customers, but of course that since we have a national product, this is what has motivated this process as a whole of the acquisition of this customer. Our growth of MCR growth was pulverized in all lines and we are very happy with good perspectives in this sense. In the specific case of synergies, I think Marcelo will be able to answer your question better than me.
This number is something that shows that we have an opportunity. We assume at the beginning of our process, we're talking about 190 days working together with a spectacular team. Marcelo is a member of this team. These teams are building a scenario of synergy opportunities.
Marcelo, would you like to comment on it?
Yes, perfectly. I think that to have achieved this target of 46 million in the month of February was something that we have celebrated really. That was a reason for celebration in our organization and our team. Myself and Irlau Machado are the leaders of this team on the Hapvida side, but we have already mentioned that we won't stop there. Fred, for now, as we have told you, we have a roadmap which is very clear, that shows that we will deliver this 46 in February 2023. We haven't adjusted this figure because I think that the organization as a whole is pursuing new fronts. We won't stop there, but for now we are happy with 46.
Thank you. Very clear, Irlau and Marcelo.
Our next question from Mauricio Cepeda, sell-side analyst of Credit Suisse. Mauricio, we will open your microphone for you to ask your question. Mauricio, you may go ahead.
Good morning. Thank you for giving me the opportunity to talk. I have some questions about the competitive environment. I believe that this environment is a little ruffled and we are facing difficulties regarding regulatory demands. I would like to know if you are perceiving the return of some customers and the magnitude of this return in the future. If you can feel a more rational environment to renegotiate all the contracts and all what will be the opportunities that are being opened in this competitive environment. In a sense, as we may have a more rational environment. I had a similar question in the prior quarter about the cleanup of our businesses and our contracts.
We had some cleanup waves with a relatively high turnover. Do you see a risk of more cleanup? Do you see some sort of solution of commercial transition given you by operators that many times don't have the same profile of members and contracts? Do you think about coming up with a solution, a transition, at least in this transition phase in those regions where you have been working, maybe?
First of all, as you point out, we talk about this when it's more intense due to the acquisitions that we carry out. This is something that is ongoing in the company because our purpose is to keep a balance in our contracts. This is something that we need to do to generate what our shareholders desire.
Many times we offer different products, and we have companies that we have acquired, which we have driven towards the verticalized product so that we can deal with these customers and include the adjustments. This is something that is ongoing. Right now, we have done a very good work with companies that were recently acquired, so we are not seeing anything much more robust in the next few months. As to the rationality of the market, you're right. The balance sheets that have been recently published can show that some data that have been disclosed by several of our competitors, and we can see that these companies are not having a good performance, and they will need management and better performance. This opens a lot of competitive opportunities for us.
What we can see is there's, well, a lot of our competitors are aware of the difficulties, and we have a rationality in the market. In some cases, out of despair are selling products to recompose their revenues in the short term. Maybe products with some level of loss that can offer revenue but not necessarily have a high cost. We have a greater opportunity for competitiveness.
Very clear. Thank you very much. I would also like to congratulate you on your well-structured presentation with very clear points. Thank you. The next question is from Joseph Giordano, sell-side analyst of J.P. Morgan. We will open the audio for you to be able to ask your question. You can go ahead.
Good morning. I have two questions also. One, about the growth of individual sales. I can see that these sales are progressing, reaching almost half of the net acquisitions of the quarter, and this is on the Hapvida side, while Intermédica grows more slowly, which is natural. I would like to know if you can talk about the drivers of this growth and if you expect this rhythm to persist. The second question is a more technical one about balance. We have seen that the net activity has increased by BRL 6.2 billion from 6.2 to 6.7, so BRL 5 billion increase. But you have plus capital cash flow of BRL 400 million. So we have this difference due to acquisitions.
I would like to understand how this variation of this debt, something that is related to the data of operational cash flow generation. Is there an effect that can explain this or adjustments of acquisitions or monetary updating of the debt that can explain this effect? These are my questions.
Okay. First, the individual. For the individual, what we see is the following. Maybe this is a bit mysterious for you, but GNDI was already selling individual plans in the past, but, you know, through companies that were acquired over time. Now, with the merger, together with Hapvida, we launched this in another 72 municipalities, which was key for us to acquire more knowledge and know-how in selling these individual products in those locations. We expect to see this dynamic continue.
We are one of the few companies in the country that is still selling individual plans. Some of the companies that are still selling individual plans are facing difficulties, and they might have more difficulty because of pricing to offer efficient competition. Now, the case of the balance sheet, I would like to turn the floor over to Mauricio, but maybe the focus should be different here. Mauricio, you have the floor.
Thank you for your question. Well, the growth in net debt has a natural effect of hiking interest rates here in Brazil, and a residual part of the M&A, the merger of Hapvida and NotreDame Intermédica, that had some foreign investors that had installments to be paid in the second quarter. The relevant CapEx that was strong in the second quarter with the units opened. With the tax income being paid, you're removing the goodwill benefits. That was all.
Okay. That's very clear. Thank you very much.
This concludes the question and answer session. We're now closing Hapvida's second quarter 2022 earnings conference call. The questions that have not been answered during the call will be answered shortly through the IR investors relations website. Thank you very much and have a great day.