PETALING JAYA: SEG International Bhd (SEGi) saw its net profit for the second quarter ended June 30 (Q2 FY2023) plummet 80% to RM2.39 million from RM11.94 million a year ago on rising costs and a drop in foreign postgraduate students.
In a bourse filing today, the private tertiary education provider attributed the earnings setback to rising costs and increased finance-related expenses.
Revenue for the quarter saw an 11.08% contraction to RM47.49 million from RM53.41 million a year earlier.
Compared to the preceding quarter, net profit saw a 48% drop from RM4.6 million in Q1 FY2023 while revenue saw a slight uptick of 3.25%, increasing from RM46 million. This growth was attributed to an influx of new student admissions during the latter half of 2023 (H2 FY2023).
For the first half ended June 30 (H1 FY2023), net profit slumped 66% to RM6.99 million from RM20.59 million in the same period last year. Revenue saw a 13.72% drop to RM93.49 million from RM108.36 million a year ago.
The group also attributed the drop in Q2 earnings to the substantial number of postgraduate foreign students graduating from SEGi institutions in preceding financial cycles. As a result, both the revenue and profit downturns were influenced by these graduating cohorts, it noted.
The rising expenses incurred were primarily linked to the increased depreciation of right-of-use assets and lease interest expenditures, which were direct consequences of revised lease terms for various campus buildings.
Its earnings per share (EPS) dropped to 0.20 sen from the previous year’s 0.97 sen.
SEGi, which operates the SEGi Group of Colleges, was set up more than four decades ago. It has five campuses in the Klang Valley, Penang and Sarawak with a total of about 16,000 students, with 40% international students from 85 nations alongside 9.1% of foreign faculty staff.
According to a filing on May 8, group managing director Clement Hii is SEGi’s largest shareholder with a direct stake of 32.4%, and a 24.4% indirect stake through Pinnacle Heritage Solutions Sdn Bhd.
SEGi’s shares closed unchanged at 65.5 sen today, giving the group a market capitalisation of RM822.78 million.