CIBT Reports 2023 Second Quarter Financial Results
Vancouver, B.C., April 14, 2023 – CIBT Education Group Inc. (“CIBT” or the “Company”) (TSX: MBA, OTCQX International: MBAIF) is pleased to report that it has filed on SEDAR its consolidated financial statements (“Q2 2023 Financial Statements”) and related management’s discussion and analysis (“MD&A”) for its second quarter of fiscal 2023 ended February 28, 2023 (collectively, the “Q2 Filing“). The following is selected financial information for the six months ended February 28, 2023 (“YTD 2023“) and comparative results (“YTD 2022”). Please refer to the Q2 Filing in its entirety, which is available under CIBT’s profile at www.sedar.com.
The following table presents selected financial data from the Q2 Filing with comparisons. All figures are in thousands of Canadian dollars, except share and per share data, unless otherwise noted.
(i)Non-IFRS specified financial measures. See section “Non-GAAP Financial Measures” for more information on each non-IFRS specified financial measure. Gross margins reflected in the table above and referenced in the MD&A below as “Margins,” are defined in the section “Non-IFRS Financial Measures” on page 15 of the MD&A.
(ii)Percentage change amounts reflect the relative change in the individual balance with the impact (negative or positive) on net income.
The following tables reconcile EBITDA and Adjusted EBITDA, non-IFRS financial measures, to the most directly comparable IFRS measure disclosed in the Q2 Filing, which is net income (loss).
(1) As defined below under “About CIBT Education Group Inc.”
(2) Interest income not associated with operations is a component of interest and other income, which is disclosed in Note 13 to the Q2 2023 Financial Statements
(3) Includes amortization of agency fees which is a component of direct educational costs
(4) Included in finance costs within Note 12 to the Q2 2023 Financial Statements
“We are pleased to report that our total YTD 2023 revenue as of February 28, 2023 has increased by 5% to $35.459 million compared to the same time last year,” said Toby Chu, Chairman, President and Chief Executive Officer of CIBT. “Our education services division, specifically the international segment, saw a substantial increase of 40% in revenue during YTD 2023 compared to YTD 2022. Correspondingly, our student-housing revenue also saw substantial growth. Most GEC®-branded residential properties are fully booked and currently have a waitlist of tenants, while our rental rates per square foot reached the highest levels ever charged at GEC®-branded properties. As a result, CIBT’s student-housing rental revenue grew by 18% to $9.048 million compared to $7.646 million in the same period last year. Our YTD 2023 EBITDAas of February 28, 2023 reached $7.569 million. Our current liabilities decreased by $28.412 million (-14%), while our assets increased by $12.413 million (+3%).
“Between March 3, 2022 and January 26, 2023, the prime rate offered by major Canadian banks has increased 148% from 2.7% to 6.7%*1, causing significant challenges to the financial and credit markets and impacting the finance costs of our real estate services division,” continued Toby. “To address the additional financing costs, our student-housing division has adjusted its rental rates accordingly, which led to a $1.402 million increase in rental revenue with the same number of operating properties compared to the same period a year ago. The interest rate has stabilized since the last rate hike on January 26, 2023. The Bank of Canada announced on February 7, 2023, that it would pause its overnight rate hikes*2. Furthermore, according to an IRCC (Immigration Canada) report*3, the international student population in Canada reached a new record of 807,750 students as of December 2022, an increase of 30% from 617,000 students in the previous year.”
Toby added, “We successfully replaced a $45 million mortgage in March 2023 at a reduced interest rate. Additionally, during the past year, we have converted two short-term mortgages into long-term mortgages and reduced our finance costs. Our educational and rental revenues are expected to grow with the latest student enrollment trend and declining rental supply. On top of that, our latest project, GEC® King Edward, is ready for possession in May 2023, which will increase the revenue sources of our growing real estate portfolio and improve the balance between the cash-flowing properties against the under-development properties. ”
About CIBT Education Group:
CIBT Education Group Inc. is one of Canada’s largest education and student housing investment companies focused on the domestic and global education market since 1994. CIBT owns business and language colleges, student-centric rental apartments, recruitment centres and corporate offices at 41 locations in Canada and abroad. Its education subsidiaries include Sprott Shaw College Corp. (“SSCC”) (established in 1903), Sprott Shaw Language College (“SSLC”), Vancouver International College Career Campus (“VIC”) and CIBT School of Business & Technology Corp. (“CIBT China”). CIBT offers over 150 educational programs in healthcare, business management, e-commerce, cyber-security, hotel management, and language training through these schools. In 2022, CIBT serviced over 13,000 domestic and international students through its educational and rental housing subsidiaries.
CIBT owns Global Education City Holdings Inc. (“GECH”), an investment holding and development company focused on education-related real estate such as student-centric rental apartments, a hotel and education super-centres. Under the GEC® brand, GECH provides accommodation services to 92 schools in Metro Vancouver, serving 3,000 students from 71 countries. The total portfolio and development budget under the GEC® brand is nearly $1.3 billion.
CIBT also owns Global Education Alliance Inc. (“GEA”) and Irix Design Group Inc. (“IRIX”). GEA recruits international students for elite kindergartens, primary and secondary schools, 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.
For more information, contact:
Chairman, President & CEO
CIBT Education Group Inc.
Investor Relations Contact: 1-604-871-9909 extension 319 or | Email: email@example.com
Some statements in this news release contain forward-looking information (the “forward-looking statements“) about CIBT and its plans. Forward-looking statements are statements that are not historical facts. Forward-looking statements in this news release include, without limitation, that CIBT’s educational and rental revenues are expected to grow with the latest student enrollment trend and declining rental supply. The forward-looking statements are subject to various risks, uncertainties and other factors (collectively, the “Risks”) that could cause CIBT’s actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. The Risks include, without limitation, national and global economic factors, customary risks of the construction industry, unexpected delays or requirements of the applicable municipalities, and the other risk factors identified in the MD&A forming part of the Q2 Filing. 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 MEASURES
The Company has included certain non-IFRS financial measures throughout this document including: (a) Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”); (b) Adjusted EBITDA which is EBITDA adjusted for the gain (loss) on change in fair value of the Company’s investment properties and the gain (loss) on change in fair value of derivative instruments; and (c) Gross Profit (“Gross Profit”) which is the difference between revenue and direct costs of sales. These 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. Accordingly, these performance measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management uses EBITDA and Adjusted 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. Management uses Gross Profit to assess how efficiently the Company generates profit from the sale of goods or services. 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 income (loss) or any other financial measure of performance prescribed by IFRS. Reconciliation of the non-IFRS measures have been provided throughout the Company’s MD&A, as applicable, filed under the Company’s profile on www.SEDAR.com.