Raffles Education remains in the red with S$1.4m Q2 loss

RAFFLES Education Corp marked a net loss of S$1.4 million for the second quarter ended Dec 31, 2017, shrinking from a net loss of S$3.9 million in the preceding year, the group said in a Singapore Exchange filing on Wednesday evening after the market had closed.

For the three months ended Dec 31, revenue crept up one per cent from the previous year to S$24.6 million.

The group recorded a decrease in investment properties from S$459.1 million in FY2017 to $439.8 million in Q2 FY2018 mainly due to a S$20.4 million reclassification of the new campus in Milan to plant, property and equipment, and a foreign currency translation loss of S$1.2 million, but was offset by additions of S$2.1 million, mainly for the renovation of the new Milan campus.

A decrease in other operating income from S$3.7 million in Q2 FY2017 to S$2.3 million for Q2 FY2018 was mainly due to the decrease in a foreign exchange gain of S$1.1 million, Raffles Education said.

Major contributors of cash inflows were a refund of S$10.2 million in deposits for cancellation of a land purchase by Tianjin University of Commerce Boustead College, drawdown of borrowings of S$19.3 million, a loan from a director of S$37.8 million, and net proceeds from issuance of S$28.2 million of shares.

A challenging global education environment, currency volatility and increasing interest rate continues to impact the group's financials, Raffles Education said.

"The group is also facing increasing competition, higher manpower costs, a more stringent regulatory environment which are expected to have an adverse effect on the group's operations," the group said, adding it will "seek opportunities in new territories".

For the first half ended Dec 31, 2017, the education provider inked a loss of S$7.3 million, a further 30 per cent loss over the previous year's S$5.62 million. Revenue for the six months to end-December fell one per cent year on year to S$48.83 million.

Raffles Education had announced the resignation of its executive director and deputy chief executive officer Chew Kok Chor on Jan 2, 2018.

In October 2017, tycoon Oei Hong Leong, who has amassed a stake of more than 10 per cent in Raffles Education, served notice that he would ask the company's founder, chairman and chief executive Chew Hua Seng, to resign. Mr Oei and Oei Hong Leong Art Museum Limited have since withdrawn their requisition notice.

Loss per share narrowed to 0.14 Singapore cent from a loss per share of 0.4 Singapore cent in the preceding year. Net asset value per share slipped to 51.75 Singapore cents as at Dec 31, from 54.6 Singapore cents in six months ago.

No dividend was proposed. Raffles Education shares closed 1.5 Singapore cents or 6.0 per cent down at 23.5 Singapore cents on Wednesday.