SEGi’s 2Q net profit plummets 80% as more students graduate, costs increase

KUALA LUMPUR (Aug 16): SEG International Bhd’s (SEGi) net profit tumbled 80% to RM2.39 million for the second quarter ended June 30, 2023 (2QFY2023), from RM11.94 million a year ago, as higher expenses and finance costs further impacted lower gross profit.

In a filing with the local bourse, the private tertiary education provider said earnings per share fell to 0.20 sen from 0.97 sen a year earlier.

Quarterly revenue fell 11.08% to RM47.49 million from RM53.41 million from the year-ago period.

It said the decline in revenue and profits were mainly due to the large graduating batches of postgraduate foreign students enrolled with SEGi institutions in the previous financial years.

Meanwhile, the higher costs came mainly from an increase in depreciation of right-of-use assets and lease interest expenses with the new lease terms for a few campus buildings.

Compared with 1QFY2023, net profit fell 47.98% from RM4.6 million, while revenue increased marginally by 3.25% from RM46 million driven by new student enrolments for the second half of 2023 (2HFY2023).

For the first half ended June 30, 2023 (1HFY2023), the group’s net profit declined 66% to RM6.99 million from RM20.59 million in the same period last year (1HFY2022), as revenue fell 13.72% to RM93.49 million from RM108.36 million.

Moving forward, the group is optimistic that its proactive measures and digitalisation initiatives, which have supported the group through the pandemic, will help propel it to be a stronger organisation in coming years.

"The group is also expanding the breath of its offerings beyond tertiary education to now include K-12 (from kindergarten to 12th grade) education, skill-based and other certification programmes. With adaptability and agility learnt from recent years, we should expect better resilience and better results in the future," it said.

SEGi’s shares finished unchanged at 65.5 sen on Wednesday (Aug 16), valuing the group at RM822.78 million