Institute reports drop in insurance revenue
THE Free Bird Institute has reported a drop in its service fee and insurance revenue as a result of the global COVID-19 pandemic.
Free Bird Institute Ltd chief financial officer Waisale Iowane said in their market announcement, it had placed a huge amount of pressure on the board and the management to make unprecedented tough decisions in the business in the past couple of months.
“Fortunately, the language students who come to study with us have an average study duration of 2-3 months, therefore, those who arrived between January to March this year would have had their departure dates two to three months from arrival and this is what we have seen translating into our revenue during the first six months of the year.
“In addition to this, we also have the high school students who come to Fiji to study for over a year, some even up to four years at local high schools, therefore, our revenue from this part of the business continued.
“However, as the borders closed at the end of March, we stopped receiving new students from offshore in the second quarter which resulted in the drop in our service fee and in-house insurance revenue by 23 to 24 per cent.
He added with the lockdown in Lautoka in March, most of their students were unable to get on their return flights home after their studies.
“As a result, management worked with the Ministry of Foreign Affairs in Japan and the company chartered an Airbus A330 with Fiji Airways to return students to Japan along with other nationals of other countries wishing to return home via Japan.
“This rare opportunity contributed to the increase in other income by 434 per cent in comparison to the same period last year.”
The border closures and reduction in student numbers resulted in management implementing various costcutting measures put in place progressively from April.
These according to Mr Iowane were pay cuts in the form of reduced hours of work and operation, reduction of manpower, suspension of bonuses as well as negotiating with the various landlords for a review or reduction in rental payments.
“These measures have resulted in the overall decrease in expenses by 21 per cent for the six months in comparison to the same period last year.
“We continue to ensure prudent management of our expenses and cash flow during this time and pleased to note that despite the unprecedented challenges that the business has had to endure in the first six months of 2020, our net profit margin is at 20 per cent, an increase by 3 per cent in comparison with the same period last year.”
He added their financial position remained strong with an overall increase of 11 per cent since December and an increase of 29 per cent from June 30, 2019.