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Unaudited Condensed Interim Financial Statements For The Six Months Ended: 30-06-2025

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Condensed interim consolidated statement of comprehensive income For the six-month financial period ended 30 June 2025

Condensed interim balance sheets As at 30 June 2025

Review of performance

Review of Income statement

The Group recorded total revenue of $43.15 million for the first half year ended 30 June 2025 (H1 2025) compared to $45.55 million for the corresponding period ended 30 June 2024 (H1 2024).

Details of revenue lines are as follows:

Revenue from tuition fees was lower at $41.59 million in H1 2025 compared to $43.78 million in H1 2024 due to lower than expected new student enrolment for the current financial period reported on.

Revenue from registration fees was $0.55 million in H1 2025 compared to $0. 61 million in H1 2024.

School shop revenue at $0.15 million in H1 2025 was comparable to H1 2024.

Enrichment programme revenue was $0.56 million in H1 2025 compared to $0.58 million in H1 2024.

Interest income decreased to $0.29 million in H1 2025 compared to $0. 41 million in H1 2024 due to lower prevailing interest rates in H1 2025.

Operating expenses before depreciation and amortisation was higher at $33.66 million in H1 2025 compared to $32.75 million in H1 2024.

Details of expenses are as follows:

Personnel expenses were $25.68 million in H1 2025 compared to $24.80 million in H1 2024. The increase was mainly due to adjustments to faculty staff headcount and related expenses.

School shop costs were $0.10 million in H1 2025 compared to $0.08 million in H1 2024.

Enrichment programme costs at $0.39 million in H1 2025 were comparable to H1 2024.

Utilities expenses were lower at $0.64 million in H1 2025 compared to $0.70 million in H1 2024.

Upkeep and maintenance expenses were $1.09 million in H1 2025 compared to $0.82 million in H1 2024.

Finance costs were lower at $1.76 million in H1 2025 compared to $2.16 in H1 2024 due to lower prevailing interest rates on lower outstanding loan in H1 2025.

Other operating expenses were higher at $4.00 million in H1 2025 compared to $3.79 million in H1 2024 due mainly to costs inflation.

Depreciation and amortisation expenses were marginally higher at $6.29 million in H1 2025 compared to $6.20 million in H1 2024.

The Group recorded a fair value loss of $1.07 million in H1 2025 compared to a gain of $0.29 million in H1 2024. The fair value reversal and movement arose from fair value changes of the interest-rate-swap contracts that the Group entered to hedge against rising interest rates on bank borrowings. More information is provided in Note 10 of the Condensed Interim Consolidated Financial Statements.

Profit before taxation was $2.14 million in H1 2025 compared to $6.88 million in H1 2024.

Income tax expense was $0.96 million in H1 2025 compared to $1.63 million in H1 2024. The H1 2025 income tax expense comprised the provision for current tax of $1.32 million and reversal of net deferred tax of $0.36 million. The income tax expense in H1 2024 comprised the current tax of $1.88 million and reversal of net deferred tax of $0.25 million.

Net profit after taxation was $1.18 million in H1 2025 compared to $5.25 million in H1 2024.

Review of Balance Sheet as at 30 June 2025

Total property, plant and equipment and right-of-use assets at 30 June 2025 amounted to $206.48 million compared to $212.12 million at 31 December 2024. The decrease of $5.64 million was due mainly to the depreciation charge for the reporting period, offset by the additional right-of-use assets of $1.89 million during the reporting period.

Derivatives liabilities (current and non-current) at 30 June 2025 amounted to $0.23 million compared to derivatives assets of $0.83 million at 31 December 2024. The fair value reversal and movement arose from fair value changes of the interest-rate-swap contracts that the Group entered to hedge against rising interest rates on bank borrowings. Please refer to Note 10 of the Condensed Interim Consolidated Financial Statements for further details.

Inventories for school uniforms, books and stationery supplies for sale at the school shop of $0.49 million at 30 June 2025 was comparable to 31 December 2024.

Trade receivables comprised amounts attributable to tuition fees, registration fees, school shop revenue and other revenue. Trade receivables at 30 June 2025 were higher at $2.62 million compared to $0.98 million at 31 December 2024 due mainly to the timing of collection of the receivables.

Other receivables and deposits were $0.36 million at 30 June 2025 compared to $0.57 million at 31 December 2024.

Prepayments were $1.27 million at 30 June 2025 compared to $1.74 million at 31 December 2024.

The Group's cash and cash equivalents amounted to $32.62 million at 30 June 2025 and $53.65 million at 31 December 2024. The decrease was due to cash used in operating, investing and financing activities as explained in the Review of Group cash flow section below.

Trade and other payables and liabilities were higher at $1.42 million at 30 June 2025 compared to $1.33 million at 31 December 2024 due mainly to timing of payments of operating expenses.

Total fees received in advance (current and non-current) was $14.85 million at 30 June 2025 and $32.55 million at 31 December 2024. Total fees received in advance at 30 June 2025 and 31 December 2024 comprised tuition fees collected before the commencement of the next semester in August and January 2025 respectively, and registration fees collected upon enrolment. As at 30 June 2025, the tuition fees for the new semester commencing in August 2025 were not due yet.

Lease liabilities (current and non-current) were $3.24 million at 30 June 2025 compared to $4.66 million at 31 December 2024. The variation in the lease liabilities was due to the expiration and renewal for teachers' apartments.

Borrowings - Bank Loan (current and non-current) was reduced to $81.00 million at 30 June 2025 compared to $84.23 million at 31 December 2024 due to the payments of quarterly instalments in January and April 2025. More information on the bank loan facility is disclosed in Note 15 of the Condensed Interim Consolidated Financial Statements.

Goods and Services Tax payable of $3.38 million and $3.45 million at 30 June 2025 and 31 December 2024 respectively arose mainly from the billing of next semester's tuition fees.

Deferred tax liabilities amounted to $5.04 million at 30 June 2025 compared to $5.41 million at 31 December 2024. The net deferred tax liabilities arose from the tax effect on temporary differences between the net book value and the tax-written-down-value of qualifying assets.

Review of Group cash flow for the first half year ended 30 June 2025

The net cash used in operating activities in H1 2024 was $8.13 million, which consisted of cash inflow from operating activities before working capital changes of $11.96 million, net working capital outflow of $18.89 million and interest received of $0.29 million, income tax paid of $1.38 million and lease interest paid of $0.11 million.

The above-mentioned net working capital outflow of $18.89 million arose mainly from the cash outflow relating to the decrease in trade payables, other payables and liabilities and fees received in advance (current and non-current) of $17.75 million. There were also the cash outflows from the increase in trade receivables of $1.64 million.

The net cash used in investing activities of $0.42 million was for the capital expenditure in the normal course of business.

The net cash used in financing activities of $12.48 million comprised lease payments of $2.72 million, payment of bank loan interest of $1.70 million, bank loan repayment of $3.08 million, and dividends payment of $4.98 million during the reporting period.

Commentary

A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the Group operates and any known factors or events that may affect the Group in the next reporting period and the next 12 months.

The Group noted the global economic environment has become more volatile and uncertain, and geopolitical tensions remained unabated.

Under the present circumstances, the Group expects the foreign system schools' landscape and the operating environment to remain challenging and competitive.