Phinma Corp. will expand its network of schools with the creation of a new education company that will offer students alternative senior high school courses under the government’s K to 12 program.
The company in its disclosure to the Philippine Stock Exchange said that it will invest some P150 million in three years for the operation of Career Academy Asia Corp., a new company that will establish facilities in key cities of the country.
According to its disclosure to the Philippine Stock Exchange, the company will sink in some P10 million in new investment during the start of its operation this year, P80 million by next year and another P60 million by 2016.
“CAA shall operate senior high schools initially in Metro Manila, Cebu and Davao focused on specialized programs such as hospitality, graphic design, multi media and fashion design,” the company said.
“The investment is an apt addition to Phinma Corp.’s current portfolio of four schools, as it expands the reach of the education business to other markets. CAA will offer students alternative senior high school courses under the K to 12 program and will provide the company an additional revenues stream that will complement and increase income from its existing programs,” it said.
At the moment, Phinma controls four schools scattered in different parts of the country. These schools are Pamantasan ng Araullo (Araullo University) Inc. in Cabanatuan City in Nueva Ecija, Cagayan de Oro College Inc., University of Iloilo and University of Pangasinan.
The said schools also offer undergraduate courses in commerce, criminology, education, engineering and nursing, among others, and likewise offer graduate studies. Income from the four schools under the Phinma Education Network last year amounted to P160.8 million, an increase of 55 percent from P103.9 million in 2012.
Its income from education services comprised a significant portion of its P261.7 million in consolidated income last year. Total enrollment reached over 31,000 students at June 2013, reflecting a 16 percent increase over enrollment in the previous year, according to the company’s report.
To note, Phinma President Ramon R. del Rosario Jr., is chairman of the Philippine Business for Education, a group that lobbied for the K to 12 program.
Phinma reported a drop of 31 percent of its net income during the first six months of the year to P127 million from P185 million last year.
Consolidated revenues, however, increased 7 percent to P2.7 billion compared to the first half of 2013, after it saw a hike in contribution across the board of all its subsidiaries including Union Galvasteel Corp., the four schools, Fuld US and Fuld Philippines.
Consolidated costs and expenses for the six months increased 9 percent to P2.5 billion due to higher costs of the subsidiaries and increased expenses, including increased depreciation costs from school building improvements.
“Despite higher income from the subsidiaries, consolidated income from operations decreased from P181 million to P154 million in the first half of 2014 mainly due to a decline in investment income and an increase in expenses of the parent company,” it said.
Equity in net earnings from associates decreased to P44 million during the period from P83 million last year due to a decline in income contribution of affiliates Trans Asia Oil and Energy Development Corp. and Phinma Properties Holdings Corp.
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