Raffles Education reports fiscal 1H net profit dropped 76 percent despite revenue rise

Singapore two-dollar billsSingapore two-dollar bills

Raffles Education reported Friday its fiscal first half net profit dropped 76 percent on-year to S$8.72 million on higher finance costs and other expenses.

Revenue for the six months ended 31 December increased 10 percent on-year to S$53.21 million on significantly higher student enrolments, with numbers in China rising 29 percent on-year, the education provider said in a filing to SGX. 

But the gains on higher enrolments were offset by reduced revenue from leasing education facilities of OUCHK, which fell by S$800,000 on-year to S$4.9 million on reduced space taken up by a few education institutions in Langfang City in China, Raffles Education said.

Finance costs rise

Finance costs climbed 65 percent on-year in the six-month period to S$11.11 million, mainly on higher interest expenses from OUCHK’s additional borrowings, default interest from Raffles K12 and Raffles Iskandar, and interest on outstanding tax liabilities of Raffles Assets Australia, the company said.

Other operating expenses increased 33 percent on-year in the fiscal first half to S$19.94 million, the filing said. The increase was partly on lower costs in the year-earlier period as some schools, colleges and universities postponed their new semester or conducting online teaching due to the Covid-19 pandemic, the filing said. 

In addition, Raffles Education said it had higher marketing, registration and examination fee expenses as student numbers increased. 

Outlook

Raffles Education issued a cautious outlook.

“The uncertainty brought about by Covid-19 pandemic with the lockdown and restricted border movements in all the locations we operate in is continuing to impact our recruitment and retention of foreign students from January 2020 till date and will continue to have impact on the group,” Raffles Education said.

No dividend was declared, unchanged on year, with the group citing the Covid-19 pandemic and being prudent.