FEU lost 152 Million Pesos on 1Q FY20-21, collected fees in advance to generate cash

Far Eastern University, Incorporated (FEU) suffered a net loss on the first quarter of its fiscal year 2020-2021 of 152 Million Pesos.

First quarter results in fiscal year 2020-2021 were lower than the previous year’s comparative quarter due primarily to this school year’s later start of classes, lower enrolment, and tuition fee discounts for online classes. All were a result of the measures that were undertaken in view of the COVID-19 and the ensuing economic hardship of students. Total revenues declined by 51%, due to the drop in educational revenues resulting from decrease in enrollment during the midyear term. Moreover, tuition fee charges were discounted as all classes were conducted using online mode, as compared to the regular tuition fees for the traditional classroom instruction.

Despite the net loss, FEU’s balance sheet as of end its first quarter (August 31, 2020) appears to remain solid for now. Consolidated cash balance stood at 2 Billion Pesos while debts coming due in the coming months stood at only 688 Million Pesos. Besides its cash balance, FEU also holds financial assets valued at 2.1 Billion Pesos.

FEU managed to generate cash from operations in the first quarter of 386 Million Pesos despite the loss by pulling forward the cash collections of its incoming revenues (collection in advance of fees). This is a warning that in the coming quarters FEU may burn cash as fees have already been collected in advance.

The consolidated financial position and the consolidated results of operations of FEU are expected to remain operationally stable at its core until year-end. Moving forward, continuous cost efficiency will have to prevail. FEU endeavors to achieve constant effective and efficient management of its schools and other entities within the group, to maintain resiliency and stability of operations.

Sysmart Corporation directly owns 21.63% of FEU as of May 31, 2020.

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