STI Education Systems Holdings Inc., owner of a chain of schools in the country, said its income fell 10 percent during its fiscal year ending March, despite the slight rise in revenues for the period.
The company said its income dropped to P502.8 million from last year’s P558.4 million, mainly on the substantial increase in interest expenses charged to operations when the company floated its P3-billion bonds last year.
Interest expenses on loans almost tripled as a result of the interest incurred on the STI Education Services Group’s (STI ESG) bond issue charged to expense, the company said.
STI Holdings floated P3 billion in fixed-rate bonds as part of its P5-billion shelf registration at the Securities and Exchange Commission.
Revenues rose 5 percent to P3.08 billion, from last year’s P2.93 billion. This is the first time that the company reached the P3-billion revenue mark.
STI attributed the revenue growth to the “steady increase in the number of enrollees in STI-owned and franchised schools, as well as in iACADEMY and STI West Negros University.”
STI Holdings follows an April-to-March fiscal year mirroring the academic cycle in the Philippines since bulk of its income comes from its education services.
For school year 2017-2018, a total of 105,031 students enrolled in schools within the company’s network. The figure is 1,304 higher than the 103,727 students during the previous school year. Senior high school students make up 55 percent of total student population, while college students in Commission on Higher Education (CHED) programs account for 42 percent.
STI said it usually experiences higher revenues and higher margins from CHED programs. As a result, gross profit margin slightly decreased by one percentage point, from 68 percent to 67 percent.
Total assets of STI stood at P14.42 billion as of end-March, or an increase of P363.5 million from last year’s P14.05 billion.
The growth in assets was due to the P1.55-billion increase in property and equipment partially offset by the P1.34-billion decrease in cash and cash equivalents. Around eight floors of iACADEMY’s Yakal campus were fully occupied as of end-March, while the remaining six floors are due for completion by mid-July of this year.
STI also acquired parcels of land in Lipa City and Legazpi City amounting to P99.1 million and P76.4 million, respectively. These acquisitions were funded by the proceeds from its bond offer in 2017.
Meanwhile, the construction projects in Santa Maria, Bulacan, and Malaybalay, Bukidnon, were completed in January 2018. Construction for the new sites of Lipa, Santa Mesa, Pasay-Edsa and a green field school in San Jose del Monte are also in full swing. The construction project in Lipa was scheduled to be completed by end of June while the rest are expected to be completed in November 2018 or in time for the second semester.