You are here

Raffles Education posts S$5.2m loss for Q2 on unrealised exchange loss

MAINBOARD-LISTED Raffles Education Corporation on Thursday posted a net loss of S$5.2 million for the three months ended Dec 31, 2015, dragged down by an unrealised exchange loss of S$1.8 million recorded by Value Vantage Pte Ltd as part of the loss from joint ventures.

The share of loss from joint ventures in Q2 FY2016 was S$2.2 million, compared with the S$3.2 million gain a year earlier.

The net loss in Q2 was a reversal from the S$431,000 net profit recorded a year ago.

Revenue slid 2.2 per cent year on year to S$29.5 million.

Depreciation and amortisation expenses grew 77.3 per cent to S$2.9 million, mainly due to the change in the estimated useful lives of certain categories of property, plant and equipment, with effect from FY2015 Q2.

Other operating expenses fell 15.6 per cent year on year to S$15 million.

This was mainly due to the absence of S$1.8 million professional fees primarily related to the Initial Public Offering (IPO) of shares of Oriental University City Holdings (HK) Limited on the Growth Enterprise Market of The Stock Exchange of Hong Kong in FY2015 Q2, and a S$0.8 million decrease in rental expenses mainly because Raffles College Pty Ltd moved from rented premises to its premises at Parramatta, Australia.

The group also recorded S$14.3 million in currency translation loss arising from the consolidation of foreign operations.

"The currency translation loss arose mainly from the translation of Oriental University City Limited and Oriental University City Holdings (HK) (collectively known as OUC) 2.2 billion yuan (S$465 million) net asset value as at Dec 31, 2015. Renminbi has depreciated about 2.4 per cent during FY2016 Q2 resulting in OUC's translation loss of S$12.1 million," said the group.

Loss per share for the quarter was 0.53 Singapore cent, from earnings per share of 0.04 Singapore cent a year ago.

The group's net asset value per share as at end December 2015 was 55.58 Singapore cents, down from 57.1 Singapore cents as at end June 2015.

In its outlook, the group said that the current macroeconomic slow down, especially in China, currency volatility, recent increase in United States interest rates and the uncertain global interest rate movements are creating new challenges for it.

It added that it is "facing a challenging operating environment with increasing competition, higher manpower costs and a more stringent regulatory environment which are expected to have an adverse effect on the group's operations".