STI income slips 17% to P655M

MANILA, Philippines - STI Education Systems Holdings Inc. reported higher revenues in its fiscal year that ended in March on the back of an increase in its student population but increased expenses and one-time adjustments from a consolidation program dragged its bottom line.

In a regulatory filing, the school chain led by businessman Eusebio Tanco said the number of students rose nearly four percent to 68,363 in the previous fiscal year from 71,195, resulting in higher revenues from tuition and other school fees.

Revenues picked up 14.8 percent to P1.91 billion from P1.66 billion a year ago, driven by the contribution of the newly-acquired West Negros University (WNU).

STI Holdings said the enrolment mix was more favorable in 2014 than in 2013 as students leaned more towards STI Network’s four-year programs approved by the Commission on Higher Education, compared with the two-year Technical Education and Skills Development (TESDA) courses.

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

In particular, 76 percent of the students took four-year courses while the remaining 24 percent were under two-year programs, an improvement from the 70-30 mix in 2013, STI Holdings said.

However, costs and expenses climbed 12 percent to P1.44 billion in fiscal year 2013-2014 from P1.28 billion a year ago.

“This is due to higher faculty salaries and other direct expenses as a result of the increased number of students. Depreciation expenses of the recently completed buildings in STI Ortigas-Cainta and STI Caloocan accounted for P23.5 million of the P67.6 million cost increase,” STI Holdings said.

STI Holdings also reported a 47-percent slump in other income to P235.78 million from P447.68 million due to various one-time adjustments recognized last year arising from the merger with school operator STI Education Services Group Inc. (STI-ESG).

Hence, its net income slipped 17 percent to P655.19 million from P794.44 million a year ago.

“Amidst all these, STI Holdings said it remains on the lookout for existing tertiary schools for possible mergers, acquisitions, or both,” STI Holdings said.

The company recently opened three newly-constructed colleges in Cubao in Quezon City, Calamba, and Batangas to boost its schools network in time for the new academic year.

STI Holdings allotted P390 million for its schools acquisition program last year while committing to continuously expand its own portfolio with the groundbreaking of two new schools. The expansion program is expected to boost enrollment to as much as 100,000 students in 2015.

From a vocational-technical school, STI Holdings now has a complete college offering baccalaureate courses. It also diversified from information technology and computer science to tourism, accounting technology, business, hotel and restaurant management, and engineering.