KUCHING: Masterskill Education Group Bhd’s (Masterskill) second quarter of the financial year 2013 (2QFY13) core loss and first half of FY13 (1HFY13) fell below RHB Research Institute Sdn Bhd’s (RHB Research) projected full-year net loss.
RHB Research attributed the 2QFY13 core loss of RM17.9 million – Masterskill’s seventh straight quarterly loss – to its inability to replenish its student base as well as the rise in operating expenses.
Correspondingly, its 2HFY13 revenue dived 57 per cent year on year (y-o-y) to RM35.9 million, throwing the company deeper into the red with a core loss of RM30.5 million.
“ Following another disappointing quarter, we slash our FY13 and FY14 forecasts further by more than 100 per cent and 73.84 per cent respectively,” the research firm projected.
“We now expect a core loss of RM57.8 million for FY13 and RM29.6 million for FY14.”
Despite this, RHB Research expected to see a bumper dividend from Masterskill disposal of its fixed assets. In May, Masterskill had announced that it accepted an offer to dispose of 10 pieces of land worth RM58.9 million.
After the disposal, which is slated for completion by 3QFY13, the company will still own 37 properties with a net book value of RM174.3 million.
“We believe it would still look to unlock the value from some of these assets.
“Assuming it disposes of all assets at their book values, this would translate into a cash proceeds of 2.5 sen after settling outstanding debts, which the company could distribute back to shareholders,” the research arm opined.
Overall, RHB Research is concerned over the near term prospects of the company, pending further updates from management on its operational strategy.
This reinforced its ‘neutral’ call and fair value of RM0.50 per share from RM0.55 per share previously, based on unchanged 0.7-fold FY14 price-over-net tangible asset per share.