Good morning. Welcome to Ser Educacional's conference call to discuss the company's results for the third quarter of 2020. With us today are Jânyo Diniz, Chief Executive Officer, João Aguiar, Chief Financial Officer, and Rodrigo Alves, Investor Relations Officer. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. After the presentation, we will start the Q&A session for analysts and shareholders when further instructions will be provided. Should any participant need assistance during the call, please press star zero to reach the operator. This event is also being broadcast live with audio and slides via the internet at ir.sereducacional.com. You can also access the webcast audio and slides through tablets and smartphones equipped with the iOS or Android systems.
The replay of this event will be available soon after its conclusion for a period of one week. Before proceeding, we would like to make clear that forward-looking statements may be made during this conference call relating to the business prospects of Ser Educacional as well as to its operating and financial forecasts and targets. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions in the industry, and other operating factors may also affect the future performance of Ser Educacional and could lead to results that differ materially from those expressed in these forward-looking statements. I would now like to turn the call over to Mr. Jânyo Diniz, Chief Executive Officer, who will begin the presentation.
You may begin, Mr. Jânyo.
Hello, everyone, and thank you for coming to our results conference call. Please go directly to slide four, where we present the main highlights of the quarter and recent events. We had an important third quarter of 2020 with our team dedicated to reducing the impacts of COVID-19 on our company, as well as working on creating opportunities to generate value for our shareholders, which we believe had very favorable developments to present. Starting with plans to combat the impact of COVID-19, marked by the reopening of face-to-face classes in most of our institutions, with priority to resuming practical classes since face-to-face theoretical classes could be applied via Sala Ser Digital classrooms, which made it possible to keep our students base solid during the year as well as fulfill their academic workload.
We can consider it was a very positive result supported by the relevant activities of supporting students with a very good credit profile, but with short-term financial difficulties. In addition to the operational efforts, we support the society where we established our college through the Instituto Ser Educacional, who carried out various activities from donation campaigns, population awareness programs, partnerships to access telemedicine, mask productions, hand sanitizers, and even productions of respirators. I believe in the benefits that these initiatives generated for the society as well as the return to us in terms of recognition of our brand as they position themselves alongside our population in such a challenging moment.
At the same time, we took important measures for the company's longevity, such as reducing non-essential activities to preserve cash if the operation situation had deteriorated, which fortunately did not, and we ended this quarter once again without actually using any of the loans we contracted to protect in case of negative cash flows along these years. We also carried out an important real estate adjustment. In the first semester, we made wide renegotiations of our rental contracts, and in the second semester, we enhanced our operations with the reduction of leased space, and we reduced four units in the cities of Recife, Manaus, Salvador, and Maceió. It is worth mentioning that we have maintained ourselves in all these markets, but now with a more adequate operation.
Another important step was to transform UNINABUCO into UNINABUCO Digital, transferring its on-campus activities to UNINASSAU and gained a recognized brand to offer our new portfolio of course, what we are calling the digital class, Digital Courses. With this, the UNINABUCO Digital, UNINASSAU Digital Graduate and GoKursos were the forerunners of new forms of education that we launched this quarter, and it was successful in its first quarter of operation, already surpassing the mark of 8,000 students enrolled. Another highlight of 2020 will certainly be our new curricula, which is already in operation with our students being able to take advantage of the distance learning of up to 40% of total course workload using the most modern education practice, which combines learnings through active methodologies with cutting-edge technology, allowing teaching through [inaudible] skills. M&A is also playing an important role in this year.
As you could probably follow because our proposal for the acquisition of Laureate assets in Brazil was passed over to Ânima Educação. Last week, we received BRL 182 million as a fine for terminating our agreement. In parallel, we also made an agreement with Ânima so that we have a bilateral option to purchase five educational institutions, which now are being evaluated by the company. With that, we returned to our current business plan with extra capital generating and extraordinary results for our company in a year that would only be a year of challenges, and the year ended up becoming a year of positive results.
In terms of results, the quarter had a more pronounced seasonal effect as a consequence of COVID-19 as compared to previous years as it delayed academic calendar in this semester, driving significant portions of the new enrollments and re-enrollments to move from September to October. Even so, our operating cash generation was quite solid, reaching 106% of Adjusted EBITDA, and our company continues with net cash of BRL 96 million. Probably after the acquisitions and the Go Shop fine, it will continue with net cash or something very close to that. In slide five, we show the next step we are taking, the launch of our digital class portfolio, which as I said before, the success we reached in the first months of operation made us confident to bring more good news for you today.
I would like to announce firsthand that as of November 2020, all three educational brands are offering the digital class portfolio, which should drive new enrollment in this segment even faster due to the recognition of our regional brands. Another highlight of the quarter was GoKursos, our open course, which is following its innovation path. After the partnership with iG and Barcelona, we are now in a partnership to distribute our course in Magalu's marketplace. We are therefore a new type of distribution that is the Brazilian retail e-commerce. GoKursos will be a very interesting platform in the future, and we are learning a lot from their potential to generate value and market potential of open course. On slide , we showed that we continue to take advantage of the intense acquisition pipeline that's happening in our sector. This year, we closed two transactions.
The first one, FACIMED, an important institution in Rondônia state that has 75 medicine seats and a good student base in the healthcare segment, capable of helping us to increase our presence in the north region of Brazil. The second is UNIJUAZEIRO, an educational institution strategically positioned in the Cariri region, inside of the state of Ceará. This institution also has a good tradition in healthcare and is the second place in market share with good growth potential. I also highlight that the two institutions are becoming university centers in this semester. For the next intake season, they will have a broader portfolio of courses to grow in these markets. Our acquisition pipeline should intensify in the coming months as we have some transactions in the due diligence phase and contract negotiation, some of which are still in negotiation with Ânima.
Moving on to slide eight, I'm going to talk in detail our third quarter results, which as I mentioned earlier, was a little atypical due to the calendar change as well as other side effects of COVID-19. To illustrate this effect, we put not only the results of third quarter training intake, but also an analysis comparing accumulated intakes between June and October. As you can see, the improvement in face-to-face enrollment between September and October is clear. I believe that with our new curricula, we have a very solid classroom model for the coming years. The highlight of the quarter was our record distance learning intake, which was also boosted by the introduction of digital class, reaching 75% gross when we analyze the results accumulated from July to October.
We believe that we will be a relevant player in this segment due to the success of our strategy, quality of content, and cutting-edge technology. On slide nine, we see the evolution of our student base, which continues to grow organically, driven mainly by distance learning and also due to the acquisition of UNINORTE. Highlight for the reduction of dropouts in September when compared to 2020 first semester. In October, the re-enrollment base also improved significantly, which shows that in fact, the greatest impact in terms of dropout was in the first semester, while in this semester, we saw our students aiming to keep the academic activities. Distance learning is no longer a promise, it is starting to become a reality, not only in intake growth, but now as significant to our student base. The face-to-face segment remained strong, and we resume growth in our view as of 2021.
Finally, we have an analysis of our student base and average tickets on slide 10. Let's start by analyzing average tickets, which is having stronger variation due to stronger seasonal effects as a consequence of COVID-19, which prolonged new re-enrollments and the re-enrollment season, increasing the impact of seasonal variation between odd and different quarters. This effect was also increased due to the higher share out-of-pocket students in our total intake. We can also highlight the competitive environment, increase of our student base, and the addition of UNINORTE that have lower average compared to Ser standalone. The interesting aspect is that the student base is practically running out, and our health base student is already 54% of the face-to-face student base, which is very positive from the point of view of the resilience and attractiveness of the course for the labor market.
Initial comments, and now I will give the floor to João Aguiar to discuss the results for the quarter.
Thank you, Jânyo. Hello, everyone. Thank you for the opportunity to present the results of this quarter. On slide 11, we present the summary of the quarter's results, which in our view are directing the company's results to something very in line with our expectations, with some seasonal and specific generated by COVID-19 that we're highlighting. First, as explained by Jânyo, the change in the seasonality of students' enrollment and re-enrollment from September to October generated a transfer approximately of BRL 10 million in revenue recognition from the third to the fourth quarter, and which has a direct impact on the results between the quarters, but a little effect from the years of 2020. Second, our operational discipline, which kept the cost and expenses structure well controlled for another quarter.
In this quarter, we had a volume of non-recurring effects greater than usual due to the return of two properties in the cities of Salvador and Recife. This is in line with our operational readjustment plan that we announced that we would do since the beginning of the year. We also had a non-recurring effect on payroll due to the same operational readjustment. Third, a known impact in the increase in depreciation and financial expenses. Depreciation due to the impact of IFRS 16 on the acquisition of UNINORTE, and financial expenses mainly due to the raising of funds to protect our cash position by BRL 500 million. On slide 12, we have the breakdown of results between on-campus, new units, UNINORTE, and distance learning.
Once again, distance learning was the biggest highlight of the year in terms of Adjusted EBITDA margin, but now becoming a line of business increasingly relevant to the company's results. Distance learning is now representing 10% of our net revenue in the quarter, and 8% accumulated in the year, and more important, growing 37% year-over-year. UNINORTE continues with an adequate pace of obtaining synergies, despite Manaus being one of the cities most impacted by the effects of COVID-19 on our operations. We believe that in 2021, we will have a binding effect of generating synergies and [inaudible] base, given that operations in general and [inaudible] specifically started to respond more positively as of September. On slide 13, we include an analysis of our net income, segregating the effects of IFRS 16 from our results.
See how this accounting effect ends up reducing our profit by BRL 23 million accumulated in the year. Something that we believe is important to present because of these changes in accounting practice has been relevant from the point of view of business return, the impact of net profit has been higher than demonstrated. Moving on to slide 14, we have an analysis of our average collection period, which a significant reduction in the quarter when compared to second quarter 2020. The average term for regular students is now 100 days, already closer to the levels that would be ideal for an operation with our profile. Positive news that demonstrates that our credit recovery area is managing to collect a higher volume of receivables, and as a result, our provision, despite having been higher versus last year, is decreasing compared to the second quarter 2020.
The average term of FIES receivables is higher than expected, but this effect tends to be reduced over the next quarter as FNDE and Caixa Econômica Federal normalizes its operations, something that has not yet this year. On slide 15, we show our operation cash generation remained, and as I mentioned it earlier, it's due to the intense work that we carried out this year, aiming on the one hand to be flexible with our students in order to facilitate their permanent study, and on the other hand, quite in the process of collecting arrears. It should be noted that this cash generation in the quarter was still hidden by the increase in the FIES average payment term, which means that we have a favorable forecast for the next quarters when these payments will be regularized.
On slide 16, we present our CapEx that just as a period with our costs and expenses was reduced due to the impossibility of carrying out of works and certain investments. Thus, it closed the nine months 2020 in about [audio distortion] of the net revenue. On slide 17, we have a more detailed view of financial indebtedness. We have another quarter with the company in a very healthy situation, which will probably have liquid cash even after the payment of recent acquisitions due to the cash inflow from the Go Shop fine, which will generate a very positive result this year. Those were my comments. Now I will turn the floor back over to Jânyo for the final remarks.
Thanks, Aguiar. Let's please go to slide 19, summarize our short and medium-term perspective. We are very confident with Ser Educacional's results for the first quarter, as our activities are very much in line with our budget. We now keep up our distance learning, which showed strong growth this year, now enhanced by the digital courses that are generating encouraging initial results. Another positive aspect is our acceleration in the continuing education segment. As you can see, both digital postgraduate courses and GoKursos are advancing consistently. Besides sort of synergies of recent acquisitions, UNINORTE already is being positive to the results as of November, FACIMED and UNIJUAZEIRO. We also have a solid pipeline of acquisitions, as well as maintaining a very favorable financial position to take advantage of this movement.
Finally, we believe that the economic activity will return to its normal, and that 2021 is likely to be a year of recovery for the sector, and we prepare for it. It will be ready to benefit from this recovery. Those are my comments. Now we give the layout to the sessions of questions and answers.
Thank you. We will now begin the question and answer session for investors and analysts. If you have a question, please press star one on your telephone. If your question is answered during the session, you may remove it from the queue by pressing star two. The questions will be answered in the order they are received. We ask that you use your handset when asking the question in order to maintain excellent sound quality. Please stand by while we collect the questions. Once again, to ask a question, please press star, then one. Thank you. That concludes the question and answer session for investors and analysts. I would like to pass the call back to Mr. Jânyo Diniz for final considerations. Mr. Jânyo, you may proceed.
Thank you all for participating in our disclosure of results. Our area of relations with [IR] is on hand to help you with further questions and information if you need. Thank you all and have a good afternoon.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.