Taaleem Holding Company’s profits (after tax) increased by 16% to reach 138.8 million dirhams by the end of the first half ending on February 29, 2024, compared to profits of 119.5 million dirhams achieved during the same period in 2023.
The company set aside 27.6 million dirhams to pay the income tax, which began to be applied from the beginning of the current academic year for the company, and the company is scheduled to begin paying it in the year 2025.
The reason for the increase in profits during the current period is the increase in revenues by 15%, reaching 548.6 million dirhams compared to the same period in 2023, which amounted to 477.2 million dirhams.
The company announced a record increase in registrations, bringing the number of students to 37,961 students, a growth rate of 33% on an annual basis.
During the first half, the asset utilization rate in Taaleem’s “distinguished category” schools witnessed a significant increase, reaching 83%, compared to 75.2% in the same period of the previous year. This period witnessed the registration of an additional 1,311 students, bringing the total to 13,983 students compared to 12,672 students in the previous year. The increase in the student base in Taaleem Distinguished Schools contributed to driving revenue growth of 12.3% YoY and EBITDA growth of 24.6% YoY through increased asset utilization and economies of scale.
As a result of the addition of six new schools within the framework of government partnership schools during the first half of 2023/2024, the number of students enrolled in this sector increased by 8,147 students to reach 23,978 students, compared to 15,831 students in the same period last year. The Government Partnership Schools program allows Taaleem to diversify its revenue sources through a continuous flow of administrative fees while contributing to the implementation of the national agenda.
Consolidated operating revenues for the first half ending February 29, 2024 increased by 15% year-on-year to reach AED 548.7 million. In the second quarter of the fiscal year, revenues witnessed a significant increase of 20.3% year-on-year, reaching AED 289.9 million compared to AED 240.9 million in the same period of the previous year. This growth was driven by an increase in student registration operations by 33.2% on an annual basis, bringing the number of students to 37,961 students in the 2023/24 academic year, compared to 28,503 students in the same quarter of the previous year. The revenues for this period were also supported by an increase in current school revenues and the addition of six New schools to the government partnership school portfolio. At the same time, Taaleem’s distinguished schools witnessed an improvement in the use of assets, which contributed to reducing the school enrollment gap by 31.3% on an annual basis at the end of the period.
Net profit (before tax) increased by 53% year-on-year to reach AED 182.8 million, with margins rising to 33.3% compared to 25% in the same period of the previous year. In the second quarter of the financial year 2023/24, net profit rose before The tax increased by 47.4%, reaching 101.2 million dirhams, compared to 68.7 million dirhams in the same period of the previous year. This growth was affected by net financing income derived from the proceeds of the IPO, which has not yet been fully exploited, in addition to the decrease in the company’s net debt.
The corporate tax was applied to the company as of September 1, 2023, which is the beginning date of its fiscal year. The first payment to the Federal Tax Authority is scheduled to be made by May 2025. The current effective tax rate is 8.9%, but it reflects the timing of expenditures and estimated revenues at this point in the year. The company recorded a one-time deferred tax liability provision of AED 27.7 million in the first quarter of 2023/24 on intangible assets arising from goodwill and other assets resulting from business mergers and acquisitions carried out in the UAE before the enactment of the corporate tax law.
These accounting provisions are new for companies operating throughout the UAE, and are considered an application of International Accounting Standard No. 12 Income Taxes (12) (IAS), which requires companies to measure deferred tax assets and liabilities on the basis of tax rates and in accordance with the laws. This is considered an allowance and not a tax liability. Effectively payable to the Federal Tax Authority, it will be released to profit and loss when the Group amortizes certain intangible assets annually and will be fully reversed over the useful life of certain intangible assets (excluding goodwill).