STI Education Systems Holdings Inc. said its net income for the first half of its current fiscal year dropped 60 percent because of higher expenses and loan interest payments.
“Net income for the [March to September] period declined to P182.4 million from P454.6 million due to increased depreciation expenses on completed school facilities, additional costs of utilities and security services, and substantial decline in the group’s equity share in net earnings of associates and joint ventures,” STI said.
“Interest charges on short- and long-term loans, net of amounts capitalized as part of property and equipment, amounted to P8.4 million this year versus P600,000 last year,” it added.
Revenues during the period rose 18 percent to P975.1 million from the year-earlier level of P826.9 million.
For the second fiscal quarter from July to September, net profit declined to P142.88 million from P269.34 million last on higher depreciation charges. The charges amounted to P23.9 million. Revenue rose 20 percent to P596.2 million from P496.5 million in 2013.
In September, STI signed an agreement with Ayala Land Inc. and its unit Amaia Land Corp to co-develop a 2.2-hectare land in Quezon City, the site of STI’s Jose Abad Santos Memorial School (JASMS).
Under the agreement, STI will develop JASMS while the Ayala group will take care of the residential and commercial buildings to rise in the area. Construction will start in March 2015, and project completion is expected before the end of 2016.
The company has four STI branches that are undergoing construction: in Cagayan de Oro, Cebu, Davao, and Las Pinas.
STI Chairman Eusebio Tanco said earlier STI will acquire more land next year to build more universities.
The company has so far spent P2.2 billion of the P5 billion allotted for land acquisition and expansion plans.
STI’s enrollees increased to 11,523 students for school year 2014 to 2015 from 8,618 students in 2013 to 2014.
At present, STI’s school portfolio includes six campuses: Cubao, Caloocan, Calamba, Batangas, Lucena and Ortigas-Cainta. It also owns the Philippine Women’s University, West Negros University, and Makati Medical Center College. Kristyn Nika M. Lazo