22% organic growth in the student base, EBITDA of R$235.5 million, an increase of 53.3%, EBITDA margin of 18.0% for a gain of 3.0 p.p. are the highlights of the Estacio balance sheet for the first six months of 2014
By a News Reporter-Staff News Editor at Education Business Weekly -- Estacio Participacoes S.A. - "Estacio" or the "Company" (BM&FBovespa: ESTC3; Bloomberg: ESTC3.BZ; Reuters: ESTC3.SA; OTC: ECPCY), one of the largest private organizations of higher education in Brazil in the number of matriculated students, is reporting its results for the second quarter of 2014 (2Q14) in comparison with the same period of the previous year (2Q13).
Estacio closed 2Q14 with a total base of 383,000 undergraduate and graduate students, 22.2% above the number recorded in 2Q13, of whom 303,600 are matriculated in on-site courses and 79,400 in distance learning courses. Setting aside acquisitions, the student base grew by 21.9% organically in relation to the same period of the previous year.
It is important to underscore the growth of the graduate student body, which closed 2Q14 with 35,500 students (in both on-site and Distance Learning), a growth of 72.3% in relation to 2Q13. Such growth is the result of management initiatives and restructuring coordinated by the Directorate of Continuing Education.
The student base at Estacio that uses FIES remained at 110,400 students, which represents 39.3% of the total student base of on-site undergraduate students.
Net operating revenues came to R$1,127.3 billion in the first six months of 2014, an increase of 31.6% in relation to the first six months of 2013, and R$589.1 million in 2Q14, an increase of 32.8% in relation to 2Q13, due to growth of 22.2% in the student base, and the positive evolution of the average on-site ticket during the period.
For the first half of the year, EBITDA totaled R$235.5 million, 53.3% above that presented in the same period of 2013, with a margin of 20.9%, representing a margin gain of 3.0 p.p. over the year before due to better management of costs and expenses and to growth of more than 31% in net revenues. Whereas for the quarter, EBITDA totaled R$106.0 million, 59.2% higher than 2Q13, with an EBITDA margin of 18.0%, a margin gain of 3.0 p.p. over the previous year.
The provision for doubtful debtors accounted for 6.1% of net revenues for this year, a decline of 0.4 percentage points in relation to the same quarter last year, reflecting a situation of lower payment delinquency in 2013, as well as an increase in the number of students using Student Financing (FIES - Financiamento Estudantil).
Net profits for Estacio in the first six months of 2014 came to R$ 211.7 million, an increase of 86.8% over the first six months of 2013, due to the increase in net revenues and efficiency gains in the cost and expense lines, which led to a 53.3% growth in EBITDA. Whereas for the quarter, net profits were R$86.0 million, an increase of 84.2% over the second quarter of 2013.
Operating cash flow in was positive at R$79.0 million in 2Q14, representing an evolution of R$40.2 million in relation to 2Q13, even taking into account the new timetable for the receipt of FIES repurchase certificates. Investments for the quarter totaled R$31.6 million, representing 5.4% of net revenues, whereas in 2Q13 investments accounted for 12.8%. Of this amount, R$3.3 million was assigned to the expansion of new units and the construction of class rooms, while the rest was basically assigned to renovation and improvement of existing units, IT projects and the consolidation of the new Model of Instruction.
At the close of 2Q14, cash and cash equivalents totaled R$787.4 million. Bank indebtedness of R$269.0 million reflects the 1st emission of Company debentures and financing lines with the IFC, as well as commitments to pay for acquisitions made in recent cycles and the balance payable on tax installments constitute gross debt, which totaled R$312.8 million at the end of the quarter. Net cash closed 2Q14 at R$474.6 million.
Keywords for this news article include: Distance Learning, Education, Estacio Participacoes S.A., Estacio Participacoes S.A.
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