STI nets P185M (+41.8% YoY) in quarter ending June

PRESS RELEASE

Enrollments boost STI Holdings, posts P185-M net income for three months ending June 30

MANILA, Philippines – STI Education System Holdings posted a net income of P185.3 million for the three months ending June 30, riding on an increase of 4% in the number of students from 68,363 to 71,195 this school year 2013-2014.

In a report submitted to the Securities and Exchange Commission, STI Holdings said the amount represents an increase of P54.7 million in net income and P24.70 million in revenues from tuition fees compared to the same period last year.

STI Holdings said apart from the increase in enrollees, STI ESG also recorded a favorable enrollment mix in 2013 than in 2012 with more students preferring to enroll in STI’s four-year programs than the two-year programs.

“Ratio in 2013 was 75 percent four-year programs and 25 percent two-year programs, as compared to 70 percent and 30 percent, respectively, in 2012. The four-year programs charge higher tuition and bring in more revenue per student,” STI Holdings reported.

The positive enrollment data resulted in an 11% increase in revenues from tuition and other school fees, from last year’s P227.7 million to this year’s P252.4 million.

STI Holdings also reported P42.8 million in revenues from educational services, which is a P2.7 million or seven percent increase during the same period last year.

At the same time, cost of educational services decreased by seven percent from P89.0 million last year to P83.0 million for the same period this year as a result of the decrease in the faculty salaries and other direct expenses.

Meanwhile, cash and cash equivalents declined by P186.7 million or 13 percent from P1,489.5 million to P1,302.7 million as of March 31, 2013 and June 30, 2013, respectively, due mostly to the ongoing construction projects for new STI campuses.

“The decrease is due to the continuing disbursements for the construction of schools as part of the Group’s expansion program and the deposit made for the planned acquisition of a university,” STI Holdings explained.

Other figures in its financial statements—such as the increase of P193.8 million in property and equipment which is a seven percent increase from last March 31—also reflect the ongoing construction of buildings for STI ORCA, STI Cubao and STI Caloocan.

STI Holdings is in the middle of massive expansion program, in anticipation of further increase in enrollments in the coming years.

The Ortigas-Cainta campus has been completed and the planned transfer of the headquarters of STI ESG has been implemented. The school campus is now in operation.

STI Holdings also said that the 11 storey Caloocan campus has been complete and will be ready by end October of 2013. Construction of STI Cubao has also started and is expected to be complete by March 2014.

STI ESG further plans to construct new buildings for five campuses located in Cagayan de Oro, Calamba, Cebu, Davao and Lucena. Due diligence audit for the purchase of a university in the Visayas has also been completed

It said STI ESG has also invested in a number of expansion projects for company-owned campuses including a 5,000-square-meter property at the heart of the Central Business District of Naga City.

Amidst all these, STI Holdings said it remains on the lookout for existing tertiary schools for possible mergers, acquisitions, or both.

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