Higher expenses weigh down FEU net earnings

FAR Eastern University, Inc. (FEU) posted slightly lower earnings at P460.98 million in the second quarter on the back of higher expenses and a slow growth in revenues.

The listed university operator reported an attributable net income lower by 0.4% in the September to November 2019 period, which accounts for the second quarter of its fiscal year.

Revenues during the three months inched up 3% to P1.17 billion, driven by a 4% rise in collection from tuition fees at P1.14 billion.

Costs and operating expenses, however, grew faster at 14% to reach P708.66 million.

For the first half of its fiscal year, which covers earnings from the months starting June to November, the company’s attributable net income rose 9% to P493.96 million. Total revenues during the period also improved 13% to P1.79 billion.

FEU attributed the growth of its year-to-date earnings mostly on strong results of its operations, as revenues from tuition fees swelled 11% to P1.68 billion and from other school fees by 9% to P46.21 million.

The company also saw a onetime gain of P37.99 million from the sale of an investment property by its subsidiary Fern Realty Corp.

Costs and operating expenses in the six months grew 18% to P1.28 billion, coming mostly from “a certain non-recurring local tax expense, higher depreciation on continuous fixed asset additions and general increase in related operational costs incidental to an increased student population…,” FEU said in its regulatory filing.

In the second half of the year, the company said it expects its financial condition to remain stable due to the improvement of its enrollment portfolio and the completion of facilities in its campuses. FEU saw a student population of 43,334 in the first semester across its system.

The company operates several high-level educational institutions with campuses in Manila, Quezon City, Cavite and Alabang. It also handles FEU Senior High School in Manila and Roosevelt College in Marikina.