Educomp Solutions, once the country’s top public-listed education company by market cap, registered a net loss of Rs 23.9 crore for the quarter ended June 30, 2013, compared to a profit of Rs 4.8 crore in the year-ago period.
This was due to a decline in revenues, not matched by similar decline in operational costs, in addition to high finance cost. Revenues declined 29 per cent to Rs 230.31 crore for the first quarter.
Revenues from the school learning segment, the biggest business earlier, halved during the quarter, pulling down overall revenues for the quarter even as higher learning solutions and K-12 school business saw decline in income. The only saving grace was online supplemental and global business, which saw growth and recorded revenues of Rs 99.96 crore, thus becoming the biggest segment for the firm.
However, segment losses from the online supplemental and global business more than doubled to Rs 4 crore and school learning business saw segment profit also vapourise from Rs 62 crore in Q1 of FY13 to just Rs 1.28 crore last quarter. Higher learning segment saw losses decline and segment profit from K-12 business rose but not enough to neutralise loss or decline in earnings from other segments.
Last month, Educomp Solutions initiated discussions with its lenders and approached the Corporate Debt Restructuring (CDR) forum to restructure its rupee debt to correct the asset-liability mismatch on its balance sheet. The company also approached the CDR forum for restructuring of debt in its K-12 business. The K-12 business is operated through its subsidiary, Educomp Infrastructure and School Management Ltd.
The company counts among its investors names such as Mount Kellet Capital, Proparco and IFC, among others.
(Edited by Sanghamitra Mandal)