SEGi sees strong 2011 after profit hit RM55mil in nine months

  • Business
  • Thursday, 10 Nov 2011

PETALING JAYA: SEG International Bhd (SEGi) is optimistic it can achieve strong results for 2011 after its cumulative profit after tax for the first three quarters hit RM54.7mil, exceeding the previous year's full-year result of RM42.1mil.

The private higher education provider has also posted a 68.5% increase in net profit for the quarter ended Sept 30 to RM18.2mil from RM10.8mil in the previous corresponding period on higher student numbers and new programs with better profit margins.

Revenue for the quarter was up 24% to RM70mil from RM56.4mil while net cash flow improved to RM87.6mil from RM58.9mil. Cash balance stood at RM107mil as at Sept 30.

At a media briefing, SEGi CEO Lee Kok Cheng revealed that the company was slated to open a new campus in Ipoh that would commence operations around 2014.

Executive vice president of corporate planning and services Cheryl Chong said the new campus would not incur any additional capital expenditure as SEGi had agreed on a long-term lease of the property at minimal rates with its developer.

“We will only be paying for the fittings and furnishings when we go in. We decided early on that we are an education service provider and would rather be asset-light to allow us to focus on our core business,” she said.

Some of the new courses that contributed to the improved bottom line include the Bachelor of Medicine and Bachelor of Surgery, optometry and dental degrees as well as a Masters of Pharmacy done in collaboration with Sunderland University.

Despite a slowdown in the intake of nursing students, the company registered a 10% increase in its student population to 26,000.

Its international student base is about 10% of its total students now due to SEGi's aggressive marketing activities. Students from China make up the bulk of international students at 40%.

Lee said the target is to increase its international student base to between 30% to 35% in three or four years, but added that the domestic market would continue to be its primary focus.

“Our domestic market has always been strong, that is one of our key growth areas. Your domestic market must be strong before you try to bring in more international students,” he said.

SEGi also announced to Bursa Malaysia that it has signed a Memorandum of Agreement with Vietnam's Ministry of Labour, War Invalids and Social Affairs to provide skill-based training to vocational instructors and students.

This follows the signing of a Memorandum of Understanding with the Vietnam government in August to explore areas of cooperation in the areas of vocational training to meet the immediate and long-term needs of Vietnam in terms of human capital development.

The filing said that under the MOA, the parties have identified and agreed to initially collaborate on three fronts under the Skills Malaysia International Technical Education & Vocational Training (SkillsMalaysia INVITE) Programme to provide technical and vocational training courses to Vietnamese candidates selected by the Government of Vietnam, to conduct English programmes, and to develop Occupational Skill Standards.

The first batch of 600 Vietnamese students will begin their training this year in areas such as automotive, welding, electronics, electrical and English language.

Training is to be conducted in both Malaysia and Vietnam. SEGi said the MOA would not have any material impact on the earnings and the net assets of SEGi during the financial year ended December 31, but it is expected to enhance its medium and long term earnings and net assets.

Vice president of group development Bruce Lim said the revenue per head for the SkillsMalaysia INVITE participants is about RM400 per month, but this would depend on how many levels each participant chooses to take.

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