On November 28th, Boshile announced its performance for the fourth quarter of the 2023 fiscal year as of August 31, 2023. During the reporting period, the company achieved a revenue of 560 million yuan, a year-on-year increase of 38.9%, and a net loss of 340 million yuan, which was 47.1% narrower than the loss of 644 million yuan in the same period last year.
Net loss significantly narrowed year-on-year
In the fourth quarter, Boshile achieved a revenue of 560 million yuan, a year-on-year increase of 38.9%. Among them, the revenue of overseas school business was 185 million yuan, a year-on-year increase of 51.9%; The revenue from auxiliary education services was 273 million yuan, a year-on-year increase of 52%; The revenue of domestic kindergartens and K12 operation services was 102 million yuan, which was basically the same as the same period last year.
For the growth in revenue, the company mentioned the recovery of overseas school operations, camp travel, international competitions, and other businesses, as well as the short-term rebound in various service revenue.
In terms of profit, in the fourth quarter, Boshi Le's gross profit was 109 million yuan, a year-on-year increase of 32.5%, with a gross profit margin of 19.5%, a decrease of 0.9 percentage points from 20.4% in the same period last year. The net loss for the period was 340 million yuan, compared to 644 million yuan in the same period last year. The adjusted net loss was 112 million yuan, and the net loss for the same period last year was 91.8 million yuan.
In terms of expenses, sales, general and administrative expenses in the fourth quarter were 177 million yuan, a year-on-year increase of 28%.
In the fourth quarter, Boshile generated a net cash inflow of 6.923 million yuan from operating activities, a net cash outflow of 20 million yuan from investment activities, and a net cash outflow of 208 million yuan from financing activities. As of August 31, 2023, Boshile's total cash, cash equivalents, and restricted cash amounted to RMB 567 million.
Overseas schools may become the main force of performance
In the fiscal year 2023, Boshile achieved a revenue of 2.124 billion yuan, a year-on-year increase of 23.9%. Among them, the revenue of overseas school business was 810 million yuan, a year-on-year increase of 24%. In the fiscal year 2019, the revenue from international schools was 741 million yuan. In addition, the revenue from auxiliary education services was 846 million yuan, a year-on-year increase of 32.9%; The revenue of domestic kindergartens and K12 operation services was 468 million yuan, compared to 425 million yuan in the same period last year.
Regarding the changes in annual performance, Hongru Zhou, Chairman and CEO of Boshile, mentioned that the overseas school business played an important role in the strong business performance during the reporting period. With the optimization of operating leverage, this business will become the main force for performance growth. In addition, there has been strong growth in auxiliary services. However, domestic kindergartens and K12 operation services are facing challenges, with revenue basically unchanged from the same period last year. The company expects that this segment will continue to face headwinds, and its revenue will continue to decline in the 2024 fiscal year.
In terms of expenses, in the fiscal year 2023, the company's sales, general and administrative expenses were 615 million yuan, a decrease of 14% compared to the same period last year.
In terms of profit, in the fiscal year 2023, Boshile's gross profit was 597 million yuan, a year-on-year increase of 25.3%, with a gross profit margin of 28.1%, an increase of 0.3 percentage points compared to the same period last year's 27.8%. The net loss for the whole year was 387 million yuan, a 45% decrease from 704 million yuan in the same period last year. After adjustment, the net loss was 149 million yuan, compared to 142 million yuan in the same period last year.
Zhou Hongru stated in his financial report that the company will promote transformation by strengthening business restructuring. "Firstly, we will prioritize the most promising businesses and leverage huge market opportunities, especially in the overseas school sector. Secondly, we will divest non core education businesses from auxiliary education, domestic kindergartens, and K12 operational services to improve portfolio performance. Thirdly, we will continue to streamline global operations and continuously adjust cost structures."
As of November 29, 2023, Boshile Education closed at $1.22 per share, an increase of 8.3%, with a total market value of $36.27 million.
The financial report indicates that due to the uncertainty of the scope, timing, and impact of portfolio actions, management is currently unable to estimate the company's future financial performance. Therefore, the company has decided not to provide performance guidance for the 2024 fiscal year.