Institute records decline in revenue
30 July, 2021, 6:00 pm
Free Bird Institute Ltd (FBL) has recorded a total revenue decrease of 46 per cent as a result of declining student numbers compared with the same period last year.
According to its market announcement on the SPX website, chief financial officer Waisale Iowane, while presenting the financial results of the six months which ended June 30, 2021, stated unlike this year most students who were studying in the same period last year arrived in Fiji between January to March, before there was any declaration of a pandemic.
“Hence, the student arrivals during the first half of last year were more than double the arrival of the first half this year,” he said.
“In addition to this, the charter flight income was less by more than 90 per cent this year compared to last year as a result of the changes in demand for international travel.
“In the first half of last year, our charter flight catered for students who were in Fiji desperately wanting to return to their home countries at the start of the pandemic compared to the charter flight arranged this year to cater for students who are wanting to come and study in Fiji during the pandemic.”
Mr Iowane added the demand levels for these two flights differed significantly and as a result, passenger numbers on the two flights were quite contrasting.
As a result of this, it was stated management as part of its Crisis Management Strategy, continued to prudentially manage the overall company expenses, ensuring that it could reduce costs where possible.
“Most of these cost savings is reflected in the direct operating costs, where the large difference is made up of the difference in charter related costs.
“Similarly, personnel expenses have reduced as a result of managing the manpower required to deliver our services to a much lower number of students compared to last year.
“We continue to ensure that our costs are reflective of the revenue in which we earn and accordingly make adjustments as and when required.
“This is evident in the 47 per cent cost savings that we have achieved during this first half of the year,” he said.
While FBL’s net profit before tax was 53 per cent lower than the same period last year, Mr Iowane stated they maintained their profit margin at 14 per cent compared with 16 per cent for the same period last year.
“We continue to maintain a consistent financial position over the six months in comparison to last year with cash flow reducing by 45 per cent mainly due to the delay in payments from agents offshore which is reflected in the increase in trade and other receivables in the balance sheet.
“Our strong cash flow position in the past has enabled us to continue to operate without being able to access more debt financing or liquidate our term deposits that we currently hold with financial institutions.
“We continue to maintain a low and desirable leverage ratio at approximately 25 per cent relying much less on debt financing.
“We continue to monitor the Japanese market for the demand to come to Fiji and based on this demand, we will assess the possibility of chartering another flight for these students in the last quarter of this year.”