VANCOUVER, April 15, 2019 /CNW/ - CIBT Education Group Inc.
(TSX: MBA, OTCQX International: MBAIF) ("CIBT" or the
"Company") is pleased to report that it has filed on SEDAR
its consolidated interim financial statements and related
management's discussion and analysis for its second quarter ended
February 28, 2019 (collectively, the
"Q2 Filing"). The following is selected financial
information for the six months ended February 28, 2019 and comparative period. Please
refer to the Q2 Filing in its entirety which is available under
CIBT's profile at www.sedar.com.
|
Six Months
Ended
February
28,
|
Percentage
Change
|
In Canadian
dollars
|
2019
|
2018
(1)
|
Total
revenues
|
$
|
32,620,450
|
$
|
31,860,528
|
2%
|
Educational revenues
– SSCC
|
$
|
16,931,353
|
$
|
17,079,307
|
-1%
|
Educational revenues
– SSLC / VIC
|
$
|
5,957,672
|
$
|
4,941,502
|
21%
|
Educational revenues
– CIBT China
|
$
|
1,485,804
|
$
|
1,322,257
|
12%
|
Design and
advertising revenues – IRIX
|
$
|
460,729
|
$
|
550,401
|
-16%
|
Commissions and
referral fees – GEA
|
$
|
424,037
|
$
|
479,905
|
-12%
|
Rental revenues –
GECH
|
$
|
5,589,155
|
$
|
3,844,336
|
45%
|
Development fees –
GECH and Corporate
|
$
|
1,771,700
|
$
|
3,642,820
|
-51%
|
Other operating
expenses
|
$
|
17,489,331
|
$
|
15,909,532
|
10%
|
Finance costs and
finance fee expenses
|
$
|
3,313,824
|
$
|
1,817,338
|
82%
|
Gain on change in
fair value of investment properties
|
$
|
8,100,000
|
$
|
8,634,612
|
-6%
|
Income before income
taxes
|
$
|
5,699,606
|
$
|
8,687,737
|
-34%
|
Net income
|
$
|
5,393,809
|
$
|
8,687,737
|
-38%
|
EBITDA
[non-IFRS]
|
$
|
9,596,269
|
$
|
10,759,469
|
-11%
|
|
|
(1)
|
During the three
months ended May 31, 2018, the business combination accounting
related to the acquisition of certain assets of KGIC Inc.
("KGIC"), formerly Loyalist Group Inc., was completed and certain
adjustments to previously disclosed provisional amounts and
associated
balances have been accounted for as if those adjustments had been
completed as of the acquisition date of March 29, 2017. As a
result,
certain comparative balances have changed from those previously
reported
|
Selected Balance
Sheet Information
|
February 28,
2019
|
August 31,
2018
|
Percentage
Change
|
Total
Assets
|
$
338,031,219
|
$
340,836,632
|
-0.8%
|
Total
Liabilities
|
$
164,826,353
|
$
169,184,451
|
-2.6%
|
The following reconciles net income to EBITDA (1)
(non-IFRS):
|
Six Months
Ended
February 28,
2019
|
Six Months
Ended
February 28,
2018
|
Net income –
continuing operations
|
$
5,393,809
|
$
8,687,737
|
Deduct: interest
income (2)
|
(38,159)
|
(103,231)
|
Add: interest on
borrowings
|
2,857,348
|
1,424,214
|
Add: income tax
provision
|
305,797
|
-
|
Add: depreciation and
amortization
|
1,077,474
|
750,749
|
EBITDA
[non-IFRS]
|
$
9,596,269
|
$10,759,469
|
Deduct: gain on
changes in fair value of investment properties
|
(8,100,000)
|
(8,634,612)
|
Adjusted EBITDA
[non-IFRS]
|
$
1,496,269
|
$
2,124,857
|
|
|
(1)
|
Please refer to the
note at the end of this news release concerning non-IFRS financial
measures
|
(2)
|
Interest income not
associated with operations
|
Highlights for the six months ended February 28, 2019, compared to the comparative
prior year period, are as follows:
- Total educational revenues combining all of our education
subsidiaries increased by 4.4% mostly due to the increase in
revenues of the language school segment
- Development fee revenues decreased from $3.64 million to $1.77
million due to the timing of various project schedules
throughout each fiscal year
- Rental income increased from $3.84
million to $5.59 million, an
increase of 45.4% as our real estate division continues to add
rental properties to its investment property base for students
attending schools in Metro Vancouver
- General and administrative expenses increased from $15.03 million to $16.25
million, largely due to integration of staff from a language
school acquisition and expenses related to real-estate development
projects
- Gain on changes in fair value of investment properties
decreased by 6% from $8.63 million to
$8.10 million
- Net income decreased from $8.69
million to $5.39 million,
mostly due to the timing of recognition of development fee
revenues, which varies dependent on the timing of development of
real-estate projects, and the increase in general and
administrative expenses above mentioned
- EBITDA decreased 10.8% from $10.76
million to $9.60 million
- Total assets decreased marginally by 0.8% from $340.84 million to $338.03
million
- Total liabilities decreased by 2.6% from $169.18 million to $164.83
million
"We are pleased with the profits being generated by our
education subsidiaries, in the amount of $2.13 million in profit for the six months ended
February 28, 2019 net of intercompany
charges and income tax provisions. Our substantial turnaround of
operating losses associated with operations previously held by
KGIC, decreased to $0.25 million net
of intercompany charges and income tax recovery, as compared to a
loss of over $20 million before we
acquired the KGIC assets in March
2017 representing a significant improvement," commented
Toby Chu, Chairman, President and
CEO of CIBT Education Group Inc. "Our rental revenue increased by
45.4% demonstrating that our business model of supplying students
from our education platform to our market rental properties is
working as planned. Our education platform and our market
rental platform will continue to be the cornerstones of our
business and are generating substantial returns for our investment
partners and CIBT shareholders.
"2019 is expected to be a bearish year for the real estate
sector in Vancouver, Toronto, and many parts of Asia such as Hong
Kong and many cities in China, in part due to uncertainties caused by
the trade war between China and
the United States, U.K.'s
departure from the European Union, and the overall economic
outlooks are somewhat clouded," continued Mr. Chu. "Despite all
these uncertainties, our education platform and rental properties
continue to grow and be profitable, while our new project
development pace will understandably be slower than in fiscal 2018
for reasons of prudence. Having said this, fair market values
gains on our investment properties, resulting from increases in the
fair market value of our investment properties, continue to be
strong and substantial despite economic growth declining. Our
success is attributable to our conservative approach towards
acquisitions, consistent value accretion to our properties through
increasing their density, and reduction of our operating expenses
through attaining economies of scale. These three value
accretive initiatives improved the net income and cash flow for our
properties. Equally important, we exited certain projects at
substantially higher values from their original cost. This boosted
our operating capital, which will enable us to seek out
under-valued assets during the current state of the economy."
About CIBT Education Group:
CIBT Education Group Inc. is one of the largest education and
student housing investment companies in Canada, focused on the global education market
since 1994. Listed on the Toronto Stock Exchange and U.S OTCQX
International, CIBT owns business and language colleges, student
housing properties, recruitment centres and corporate offices at 43
locations in Canada and abroad.
Total annual enrollment for the group exceeds 12,000 students.
Its education providers include Sprott Shaw College (established in 1903),
Sprott Shaw Language College, Vancouver International College and CIBT School of Business.
Through these schools, CIBT offers business and management programs
in healthcare, hotel management, language training, and over 150
career, language and vocational programs. CIBT owns Global
Education City Holdings Inc., an investment holding and development
company focused on developing education-related real estate such as
student hotels, serviced apartments and education
super centres. Total portfolio and development budget of
projects under the GEC® brand is more than C$1 billion. CIBT also owns Global Education
Alliance ("GEA") and Irix Design Group ("Irix Design"). GEA
recruits international students on behalf of many elite
kindergarten programs, primary and secondary schools, and colleges
and universities in North America.
Irix Design is a leading design and advertising company based in
Vancouver, Canada. Visit us
online and watch our corporate video at www.cibt.net.
Toby Chu
Chairman, President & CEO
CIBT Education Group Inc.
FORWARD-LOOKING STATEMENTS
Some statements in this news release contain forward-looking
information (the "forward-looking statements") about CIBT
Education Group Inc. and its plans. Forward-looking statements are
statements that are not historical facts. Forward-looking
statements in this news release include (without limitation) the
statement that 2019 is expected to be a bearish year for the real
estate sector in Vancouver and
other parts of the world and that CIBT's current level of operating
capital will enable it to seek out under-valued assets during the
current state of the economy. The forward-looking statements
are subject to various risks, uncertainties and other factors that
could cause CIBT's actual results or achievements to differ
materially from those expressed in or implied by forward-looking
statements, including but not limited to obtaining all necessary
regulatory approvals. Forward-looking statements are based on the
beliefs, opinions and expectations of CIBT's management at the time
they are made, and CIBT does not assume any obligation to update
its forward-looking statements if those beliefs, opinions or
expectations, or other circumstances should change, except as may
be required by law.
NON-IFRS FINANCIAL MEASUREMENTS
The Company uses: (a) earnings before interest, taxes,
depreciation and amortization ("EBITDA"); and (b) adjusted
EBITDA which is EBITDA adjusted for the gain (loss) on the change
in fair value of the Company's investment properties which are
non-IFRS financial metrics in this news release. Non-IFRS financial
measurements do not have any standardized meaning as prescribed by
IFRS and are therefore unlikely to be comparable to similar
measures presented by other issuers. Management uses EBITDA metrics
to measure the profit trends of the business units and segments in
the consolidated group since it eliminates the effects of financing
decisions and Adjusted EBITDA as a measure of net income without
the impact of gain (loss) on the change in fair value. Certain
investors, analysts and others utilize these non-IFRS financial
metrics in assessing the Company's financial performance. These
non-IFRS financial measurements have not been presented as an
alternative to net loss or any other financial measure of
performance prescribed by IFRS. Reconciliation of the non-IFRS
measure has been provided throughout the Company's MD&A filed
as part of the Q2 Filing under the Company's profile on
www.sedar.com.
SOURCE CIBT Education Group Inc.