SINGAPORE (Feb 8): Raffles Education Corporation has narrowed its 2Q net losses to $3.9 million from $5.2 million a year ago.
Group revenue for 2Q17 ended Dec fell by 17% to $24.4 million from $29.5 million in the preceding year.
This was mainly due to the discontinuation and teach-out of Raffles Shanghai joint venture college; a decrease in utility income of $1.9 million from invested properties in Oriental University City Limited (OUCL) after it had been taken over by a third party; as well as a reduction in foreign student intake in Raffles Sydney, which led to a consequent fall in revenue, says the group in a Wednesday filing to the SGX.
Other operating expenses increased by 12% to $16.8 million from $15 million previously due to foreign exchange (forex) losses.
However, the lower revenue and higher other operating expenses recorded were partially offset by higher share of results of joint venture and associates for the quarter, which include an exchange gain of $376,000 by a joint venture as well as fair value gain on investment properties of $1 million by Axiom Properties respectively.
$13.7 million of currency translation gain also arose from consolidation of foreign operations, specifically the translation of OUCL and Oriental University City Holdings in Hong Kong.
In its outlook, Raffles Education notes unfavourable macroeconomic conditions, especially in the region and China, where “uncertain global interest rate movements continue to be challenging for the group”.
Increasing competition, higher manpower costs and a more stringent regulatory environment are additional challenges which the group anticipates to have an adverse effect on its operations as well.
Raffles Education says it will seek opportunities in new territories moving forward.
