Good morning. Welcome to Ser Educacional's conference call to discuss the company's results for the fourth quarter of 2018. With me 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. The event will also be broadcast live with audio and slides via the internet at ri.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 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.
Thank you. Good morning to all, and thank you very much for attending our fourth quarter 2018 earnings conference call. Today, we will divide our presentation into two parts. In the first part, me and Aguiar will talk about the results of the quarter, and in the second part, we will comment on the current stage of strategic development of our business plan. Turning to slide three, we have the main quarter highlights, which I believe was positive for our company. Despite the challenging year we had, especially given the start that was below our expectations, especially for the student intake from the first quarter, which led us to execute an action plan to adjust our structure of costs and expenses to our student base.
As highlights of the quarter we have: healthy growth in net revenue by 3.5%, an increase of 48% in our adjusted EBITDA, and as an additional highlight for EBITDA this quarter, we had a few adjustments due to non-recurring effects, which shows that the impact of these non-recurring effects incurred in the previous quarter became a recurring result quality in this quarter. There was also 142% growth in our adjusted net income, which was the best quarterly result we had since 2015. When we consider the earnings per share, we had an even greater growth of 161%, thanks to the stock repurchase plan that totaled approximately BRL 150 million or about 7% of total company shares.
It is worth remembering that the current share repurchase program is still open, with about 20% remaining to be completed, and our intention is to complete this program whenever we have a regulatory window to repurchase shares. To end this slide, we have another part of solid operating cash generation, with BRL 105 million cash generated in the quarter, representing 172% of our adjusted EBITDA for the same period. Turning to slide four, let's talk about our quarterly operating results. We have on the left side of the slide the evolution of our student base in the quarter, and on the right side, the evolution of the average ticket.
The consolidated student base showed a slight decrease of 1.5%, due mainly to the reduction of the student base in the on-campus graduation segment throughout the year, due to an intake scenario that remained competitive during the whole period due to the low economic growth, especially in the North and Northeast regions, and higher unemployment. It was a very busy year where we had a lot of headwinds. Besides the macroeconomic scenario, we also had problems in the FIES systems, truckers' strike, World Cup effects, and elections, among others. This impact on the on-campus intake process was partially offset by the distance learning intake, a segment that is developing well in the company, both for undergraduate and graduate segments, with our student base growing 44% versus 2017. On the other hand, in the quarter we had an improvement in average ticket performance.
Note that in the on-campus, we had growth of 8.4% due to two main factors that have offset the impact of competition in the higher education sector. The first effect is inflation that impact the average price in the year-over-year comparison, and this effect associated with the way we give discounts. That is, discounts for the first month after the enrollment and the [graduate] discounts that tend to improve average ticket over the course of the year and in the even quarters. The second is what we call healthcare effect, which is the great gain of product mix towards the segment of health that has been happening in the company in recent years. In particular, in this quarter, we had in addition to this additional mix effect on growth is the participation of the healthcare student base in the company and campus student base as a whole.
In this quarter, we enrolled 100 additional medical students in October, which were received in our Recife medicine course, which has both the university center in Natal and the accredited medical course with the maximum grade in the Ministry of Education. To further demonstrate the impact of the healthcare effect, on slide five, we present the evolution of the mix of course in the on-campus segment of the company. Note the chart on the left side that from 2015 to 2018, there was an increase of 11 percentage points in participation of health course in our total base of an undergraduate students from 39% in 2015 to 50% in 2018. We are comparing with 2015 because this was the first year of significant reduction of new enrollments of the FIES, and our company had already consolidated UNG and UNAMA, therefore excluding these effects from our results.
As a result, the mix gain, together with the annual inflation pass-through, were the main drivers of our average ticket in the comparison between the two periods, with growth even above inflation. It is worth noting that our average ticket growth practically does not have accounting effects generated by initiatives to grant credit to students. To demonstrate this, the bottom right-hand corner of the slide demonstrate that our Educred student base, our proprietary credit program that has existed in the company since 2017, has gone from 0.6% of the undergraduate student base to only 2%. As a conclusion of this slide, note that the base of FIES students between 2017 and 2018 fell about 10 percentage points, which indicates that the company has consistent price practice between different profiles of students captured, and that we have been able to sustain price so far.
Before turning to Aguiar to comment on the financial results, I'd like to close this first part to comment that I believe that 2018 results were important to demonstrate the company's resilience in recent years. We have a revenue base that has proven consistent so far, thanks to a decision we made in 2012, and that it was right to be on the growth of health course and still have room to grow because most of these courses are only with their first classes taught. In addition, our team was able to mobilize quickly to make the necessary adjustments, both operationally and strategically, when we realized that this was necessary. Today, I believe we are on the right track, adjusting our operation as the economy progresses, planting the seeds of future growth, and how the team is very cautious and aware of the work that needs to be done.
These are my initial considerations, and now I give the word to Aguiar to comment on the results of the quarter.
Thank you, Jânyo, and thank you all for participating in our conference call. Turning to slide six, we have our summary of quarterly and year results. As Jânyo commented, despite the challenges, we managed to close our year with positive results. We achieved a good generation of revenues in the quarter, which assured that we closed the year with net revenue growth despite the reduction in the total student base. But the main highlight, in my opinion, was the good performance of gross margin, which showed a solid expansion of over 4 percentage points, reflecting for the first time the effort made in the reduction of rents, the effect of which has already been observed in previous quarters, combined with the effect of the reduction in staff costs as a result of the work done to adapt the teachers base carried out during the year.
But which had a greater impact in the fourth quarter, since in this quarter, there is a higher incidence of hourly payments per class compared to the third quarter, which was the quarter we made most of the adjustments. The combined effect of the robust improvement of the gross margin in the fourth quarter means that this margin closed the year almost flat for the year. In the G&A expenses, the best performance we had in marketing and personal lines was partially offset during the year by the increase in the bad debt provision due to the delinquency that continues at high levels, and we now believe that it can begin to reduce its impact going forward due to a potential decline in the unemployment level in our region.
As a result, our adjusted EBITDA for the quarter grew by 5.7 percentage points but decreased 1.2 percentage points year-over-year, mainly due to the execution of the action plan that only occurred from the second quarter and higher delinquency, which eventually led bad debt to stay at higher levels throughout the year. Finally, another great highlight is the net income, both adjusted and nominal, and also earnings per share, which had significant growth in the quarter as the higher average cash balance and the lower volume of discounts granted led to an improvement in the financial results. Turning to slide seven, we have a table that shows the results excluding the impact generated by the new units in our business merger. As you can see in the chart, these new activities were consuming 3.3 percentage points of our adjusted EBITDA and 4.5 percentage points in the year-over-year.
In summary, if we were not choosing to continue generating growth opportunities for the future, we would have an adjusted EBITDA margin of approximately 30%, which we consider a fair margin for our current businesses. On slide eight, we present our aging of accounts receivables as well as our average day of net collection. We had another quarter of a reduction in the average day. Basically, due to the payment in August of the amount referring to the last installment of PN 23 by the federal government was reduced the average day by 83 days. As for the regular flow of payments, it can be observed that the FIES average term reduced slightly from 38 to 36 days. In these two years, the federal government improved its payments monthly in the fourth quarter, anticipating the December payment that was normally made in January.
In addition, when we analyze our accounts receivables from regular students, we also see an improvement that has been occurring due to the increase in the recovery of delinquents, mainly in the outstanding balance for more than 360 days, and the provisions we have made throughout the year. Turning now to slide nine, we have two graphs that shows the evolution of operational cash flow in the quarter and in the year 2018. In the fourth quarter, we had a robust cash generation once again, which represented 173% of adjusted EBITDA in the same period. This is a seasonal effect we have discussed since last year, when the federal government improved its FIES payment timelines by paying the year's duty amounts within the year itself, improving year-end cash generation.
On the other hand, seasonally, out-of-pocket students pay their overdue monthly payments during the re-registration period, which occurs in odd quarters, causing working capital to lengthen somewhat. For the year, we had some additional effects. First, we had the portion of BRL 137 million related to the third and final payment of the PN 23 debt in the quarter. As in the third quarter 2017, BRL 66 million were paid referring to the penultimate portion of PN 23. The additional net cash generation in the year-over-year comparison due to this effect was BRL 71 million higher. The second is a non-cash effect of BRL 26 million of the adjustment in the opening balance of the bad debt provision due to the adoption of the IFRS 9. In other slides, 10 and 11, we had little evolution compared to previous quarters.
Our company remains robust in terms of net cash, ending the year with 1.6 x adjusted EBITDA, and with 74% of net cash and cash equivalents. In terms of CapEx, we kept the same rhythm observed in the previous quarters of the year. The main highlights for the year, we finalized the new block in our Fortaleza main campus and the transfer of our unit of Paulista into a shopping center that was recently built in the city and which presented good intake during the year. We also completed part of the renovation in Barueri campus, and most relevant work in process today is the expansion of Caruaru campus.
As the main expansions are being completed between last year and this year, we can see that our CapEx as a percentage of net revenues rose from 9% to 8% this year, a level we consider adequate for the company's current development stage. For 2019, we believe that the CapEx will continue to decline at a similar pace we had between 2017 and 2018, as the largest works are finalizing and the new units are opening are being made in a more asset-light model and are greenfield units, therefore, needing lower CapEx. The volume of investments for the year will be more directed in laboratories and libraries, aiming to give support to our portfolio of courses in healthcare and engineering that has grown a lot, and investment in technology.
Well, these were my comments on the results, and now I turn the word back to Jânyo for him to make his considerations before we open the floor for the Q&A.
Thank you, Aguiar. Now moving to the last slide, 12. The table on the top right shows that we have made some changes in our dividend distribution. We are distributing a dividend that corresponds approximately 28% of net income and 24% of adjusted net income for the year, an increase from 17% last year. The bottom table on the lower right side of the slide has a stats of our 2019 intake, a subject we traditionally talk about when we publish fourth quarter 2018 results. As you can see, we are showing growth of intakes so far in this year compared to the same date last year, both in on-campus and distance learning segments. In the on-campus segment, as I commented at the beginning of the presentation, the market remains competitive within what we expected when we set our goals for the year.
At distance learning, we have higher than expected intake results so far, which gives us a lot of confidence in the business model we have adopted and in evolution of this business model going forward, especially because if we can maintain another quick pace of growth, we should achieve breakeven EBITDA in our distance learning, which we have planned to do since 2017. We have, therefore, an eye that improved compared to that we present in March of last year, which attribute to the focus that we are maintaining the execution of our business plans. We now have opportunities to generate results to be captured at the maturation of our units opened in recent years, as well as the distance learning center.
We also expand portfolio of course in units at all levels of maturation, including the transformation of UNINASSAU Fortaleza, Natal, and Maceió into university centers that are in the final phase of completion of their accreditation process by the Ministry of Education. In addition, I believe that we must keep our team focused on continuing the implementation of Ser Digital, which in addition of helping us to create a digital future that is increasingly dedicated to improving the student experience, this project is generating more and more integration between our non-campus and distance learning course. Additional robotization of our back office and increasingly improving our managerial and commercial decision-making process, mainly after the consolidation of our market intelligence teams. We are therefore aware of the great work to be done in a still challenging environment.
But on the other hand, we have been able to demonstrate that we can continue to do our activities as we are developing and focused even more on our core business shareholder values. These were my comments, and I'd like to open for question- and- answer session.
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 yourself from the line by pressing star two. Questions will be answered in the order they are received. We ask that you use the handset when asking the question in order to maintain excellent sound quality. Please stand by while we collect the questions. Showing no questions, this concludes the question- and- answer session for investors and analysts. I would like to pass the call to Mr. Jânyo Diniz for final considerations. Mr. Jânyo, you may proceed.
Thank you all for participation in our conference call results, and our investor relations area is available to assist you with further clarification if necessary. Thank you all, and have a good afternoon.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.