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138 Student Living posts JM$347-M profit for FY2020

For the twelve-month period ending 30 September 2020, 138 Student Living Jamaica Limited (138 SL) recorded profit before taxation of JM$441 million  and an after-tax profit of JM$347 million . 

Revenue for the year reached JM$1.22 billion compared to JM$1.01 billion in 2019.

Living quarters for in a 138 Student Living building on the campus of The University of the West Indies, Mona. (File photo)

In comments attached to the year’s results, company directors stated that the positive outcome is the result of “effective management of operating costs (primarily utilities) and variation claims relating to Irvine Hall”.

The latter item includes a variation claim for the full year 2019 as well as the claim for the year 2020. Adjusting for the variation claims, the group recorded year-to-date profit amounting to JM$78 million. 

During the period under review, 138SL continued to operate 1,464 rooms at its four locations on the UWI Mona Campus consisting of 1,692 beds.

The directors stated that while the COVID-19 pandemic has negatively impacted business operations, “we continue to see the positive impact of sustained measures that were previously implemented.”

Chairman Ian Persaud speaking during the annual general meeting of 138 Student Living on February 27, 2020, while directors of the company look on (Photo: 138SL)

As listed, these are the effective execution of the concession agreements with partner, The UWI; efficient operations; and receivables and credit management.

The directors also noted that the increase in receivables for the period under review is primarily due to the Irvine Hall variation claims mentioned previously. The company continues to see reductions in accommodation receivables.

Adjusting to current realities

Overall, revenue increased 28 per cent while expenses reduced by three per cent when compared to the prior year. 

Chairman of 138SL Ian Parsard commented, “The Covid-19 pandemic has had a negative impact on our long-term occupancy revenues, which saw
occupancy before March 2020 of 99 per cent falling to levels below 20 per cent. This translates into a reduction in long-term rental revenue for the fourth quarter of approximately [JM]$101M.”

Entrance to The University of the West Indies, Mona campus, in St Andrew, Jamaica (File photo)

“The Management of 138SL took the necessary steps to align the business within the current realities. These actions include but are not limited to: consolidation of accommodation to house the students who remained on campus, after the UWI issued a notice for local students to return to their homes, on one building of each of the halls of residence, thus reducing utilities and staff costs (primarily security and housekeeping which forms the largest staff classifications),” he added. 

The company has also deferred capital expenditure plans for the remainder of the financial year and minimised maintenance activities to only essential services.

COVID-19 measures

Persaud said the company has also been seeking opportunities for new sources of revenue during the COVID-19 period by engaging the Government of Jamaica for housing during their COVID-19 quarantine period.

Since September 7, 2020, The UWI has moved classes online for the first semester and, as a result, students who had previously applied for on-campus accommodation have decided to defer their accommodation requirement to the next semester. (File photo)

138SL, he indicated, has also held discussions held with our bankers and financiers to negotiate financing options to mitigate the impact of the COVID-19 pandemic on the business operation. 

Since September 7, 2020, The UWI has moved classes online for the first semester and, as a result, students who had previously applied for on-campus accommodation have decided to defer their accommodation requirement to the next semester. 

During the period, management implemented additional safety measures including but not limited to sanitisation of common area spaces, the mandatory wearing of masks, and minimising the number of individuals allowed to congregate at any one place including in common areas and elevators.

New and returning residents must undergo quarantine for 14 days and there are temperature checks on each person at the gate and before entry to the halls, Persaud outlined.