FAR EASTERN University, Inc. (FEU) posted a 27.8% increase in net income attributable to parent company equity holders to P589.33 million for its end-November quarter due to higher revenues and lower operating expenses.
In a regulatory filing, FEU reported a 6.8% rise in total revenues to P1.25 billion for the September-November second quarter. The listed educational institution’s fiscal year ends in May.
Its operating expenses dropped 7.3% year on year to P656.27 million from P708.27 million previously.
For the June-November period, the company said its attributable net income fell 10.8% year on year to P440.53 million from P493.96 million.
Its revenues for the period also declined 12% to P1.54 billion against P1.75 billion in 2019.
FEU said the decline in total revenues was due to lower enrollment during the midyear term and first semester.
“Moreover, tuition fee charges were discounted as all classes were conducted using online mode, as compared to the regular tuition fees for the traditional classroom instruction,” the disclosure said.
FEU’s operating expenses for June to November fell 15% to P1.09 billion against P1.28 billion in 2019.
The company said its operating expenses fell due to the decline in amounts incurred for salaries, employee benefits, utilities, communication, and material expenses.
“This resulted from the suspension of face-to-face classes and limited on-site work during the period,” the disclosure said.
For the first semester of school year 2020-2021, the company’s total student population reached 39,361, lower by 10.7% from 44,069 previously.
FEU said it expects to remain operationally stable until the end of the year, but projects a drop in revenues and net income.
“With the new coronavirus disease 2019 (COVID-19) pandemic currently affecting the Philippines and almost all countries around the world, the management recognizes the group’s exposure to the risks in its business environment,” the disclosure said.
“Particularly, the schools’ inability to hold face-to-face classes and the expected adverse economic impact on the general public’s household income are among the significant factors which lead to lower number of enrollments for the school year 2020-2021,” it added.
Despite the pandemic, FEU is “fairly optimistic” that operational stability will be continued for the rest of the fiscal year as long as cost optimization prevails, since the semestral schools open their second semester in late January 2021 and the continuous easing of economic restrictions.
FEU operates campuses in Manila, Quezon City, Cavite, and Alabang. It also owns FEU Senior High School in Manila and Roosevelt College in Marikina.
On Tuesday, shares in FEU at the stock exchange fell 3.45% or P20 to end at P560 apiece. — Revin Mikhael D. Ochave