By Durrant Pate/ Contributor

The University of the West Indies’ accommodations provider 138 Student Living (138 SL) Jamaica is seeing a consistent growth in its year-to-date net profits due to higher rates, strong occupancy levels and better utilisation of laundry operations.

138 SL generated net profit of $107.8 million for the third quarter ended in June 2024 and $299.6 million for the nine-month period. Net profit has consistently grown for the nine-month period for the last three years.

Occupancy at the start of the June quarter was 92 per cent and trended downwards as some students at Irvine Hall vacated their rooms at the end of the 38-week contract, which governs the residents. As for the Leslie Robinson and George Alleyne Halls, the residents are governed by a 51-week contract with occupancy level in the 90 per cent.

For the quarter ended June 30, 2024, revenue closed on $376.5 million, an increase of 8 per cent, when compared to the $347.4 million recorded in the prior year.

Factors for the rise in revenues

The movement is derived from increases in rates across all halls and other income, as the company continue to experience year on year increase in revenue. For the current quarter, other income contributed J$46.2 million and $110.7 million for the nine months compared to $23.5 and $54.08 million for the corresponding periods, respectively.

This increase is primarily driven by better utilisation of laundry operations and a one-off sale of surplus equipment during the current quarter. Group activities resulted in an operating profit of $193 million for the three months ended June 2024, an increase of 8 per cent when compared to $182.8 million in the corresponding prior period. 

However, the results were negatively impacted by increases in administrative expenses for general insurance, salaries, and internet services; the latter being required to enable enhanced WI-FI services for our residents. Pre-tax profit amounted to J$119.2 million for the June quarter, up 26%  when compared to J$94.4 million for June 2023.

APO lowers earnings

138SL recorded an efficiency ratio of 47 per cent at the end of the quarter, the same as in the previous year’s corresponding quarter. Earnings per stock unit (EPS) for the third quarter went down to $0.20 compared to $0.21 in 2023. The marginal decline in the EPS is related to the increase in the number of shares in issue arising from the recent additional public offering (APO). 

Total assets stood at $10.2 billion, an increase from the prior year’s balance of $9.9 billion, primarily due to an increase in cash and cash equivalent. Approximately 85 per cent of the total assets or $8.7 billion represents non-current assets, while the remaining 15 per cent represents current assets. For the prior year, non-current and current assets represent 88 per cent and 12 per cent of total assets, respectively. 

Current liabilities stood at $1.3 billion as at the June 2024, a $90.9 million or 6.5 per cent decrease from the $1.4 billion recorded at the end of the 2023 financial year. This was primarily driven by repayment of short-term loan notes. Shareholders’ equity increased by $764.9 million to end the third quarter of 2024 at $5.6 billion.

This increase was primarily driven by the increase in retained earnings and increase in share capital resulting from the recently concluded APO. Cash flow from operations totalled $359.2 million, compared to $391.9 million in June 2023, which is an 8% or J$32.7 million decrease.