Raffles Education profit plunges 68% to S$5.4m as operating expenses soar

Revenues improved but not nearly enough.

In a release announcing its FY2013Q1 results ended 30 September 2012, Raffles Education Corporation Limited, the largest private education provider in the Asia Pacific region, reported a revenue of S$32.8 million and a net profit of S$5.4 million.

Revenue for FY2013Q1 increased from S$32.7 million a year ago to S$32.8 million due mainly to an increase in Asia Pacific (“Ex-PRC”) revenues as the Group’s geographic diversification strategy and investments in new markets bring forth positive results to offset the decline in PRC revenues.

"Though not significant, the increment signifies a gradual turnaround and affirms that the Group’s focus on developing and investing in Ex-PRC over the last few years is bearing fruit," noted Raffles Education.

The Group recorded other operating income of S$19.9 million in FY2013Q1 due to gains on sale of investment properties in Oriental University City (“OUC”) as it continues to divest its non-core assets to realise returns for investment into its education business.

FY2013Q1 net profit was S$5.4 million from a net profit of S$16.9 million reported a year ago due primarily to an increase in other operating expenses of S$9.3 million which mainly comprised of provisions for potential compensation and demolition in OUC. Other operating expenses also increased due to foreign exchange loss resulting from the appreciation of Singapore Dollar against the Renminbi and Australia Dollar.

Raffles Education said the performance this quarter included the gain on disposal of the 118 mu of investment properties in OUC.

"We do not expect further disposal of investment properties in this current financial year. Nevertheless, should opportunities arise, the Group will consider divesting its non-core assets to realize returns on investments," Raffles Education said.

Chew Hua Seng, Chairman and CEO of RafflesEducationCorp, said, “Although PRC revenue is declining due to the challenging operating conditions, the Group has been repositioning and implementing new strategies in PRC. However, our geographic diversification and expansion strategies in Ex-PRC are bringing in positive results.”

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia