Higher enrollment boosts STI profits by 61% to P206M

MANILA, Philippines - STI Education Systems Holdings Inc. said its profits surged more than half in the April to June period on the back of higher enrollment figures.

In a regulatory filing, the company led by businessman Eusebio Tanco said its net income jumped 61 percent to P206.02 million from P127.51 million last year.

Total revenues, which were primarily derived from tuition, school fees and educational services, rose 3.12 percent to P330.04 million during the period, the first quarter of its fiscal year that will end in March 2014.

STI Holdings said the growth was driven by a four-percent increase in the number of students to 71,195 for school year 2013-2014 from 68,363 a year ago.

“STI Group 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,” STI Holdings said.

“The four-year programs charge higher tuition and bring in more revenue per student,” STI Holdings pointed out.

Specifically, four-year program students accounted for 75 percent of the student population this year, up from 70 percent a year ago.

This allowed STI Holdings to post an 11-percent growth in revenues from tuition and other school fee to P252.4 million from P227.7 million.

Revenues from educational services picked up seven percent to P42.83 million.

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

STI Holdings is in the middle of an expansion program in anticipation of further increase in enrollment in the coming years.

STI Holdings has also completed the construction of the STI Academic Center campus in Cainta, Rizal.

The firm also finished the construction of the 11-story Caloocan campus, which will be ready by end-October.

Moving forward, STI Holdings plans to put up 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.

In November, STI raised P2.36 billion through a follow-on offering. Tanco consolidated all his education assets — the STI chain of schools, a 40 percent stake in Philippine Women’s University and iAcademy – under STI, and a 20-percent interest in STI Investments, which holds Tanco’s strategic investment in Philplans, a leading pre-need savings program with plans dedicated to education, and Philcare.

STI Holdings allotted P1.528 billion for capital expenditures this year and P2.39 billion for 2014.