3 weeks ago
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Student accommodation company 138 Student Living Jamaica Limited is still hunting for a solution for its debt load of $3.2 billion year ending September.
The company spent $331.78 million over the financial year to service the debt, down from $360.86 million in 2023.
CEO Cranston Ewan said the 138SL board was still looking for opportunities to further bring down the finance costs and to drive value to the bottom line for shareholders, having fallen short on the equity it expected to raise in an APO or additional public offering of shares last November. The company was hunting more than $2 billion but only got take-up for some $500 million.
Ewan said that by next June investors should have a clearer picture on how the company will proceed, while noting that discussions were under way.
“That clear picture is looking for opportunities to optimise our balance sheet and align our debt portfolio. That’s really what we’re looking at,” he said.
“We’re anticipating something. I can’t speak to it as yet, but there are some discussions taking place. (It’s) not about an APO, not about an equity raise, but there are discussions taking place where we are looking to extricate ourselves from some of that debt and to drive better value to the bottom line,” Ewan added.
The company, a provider and operator of housing for students at the University of the West Indies, has been boasting good revenue growth, but its profit gains have generally remained at single-digit levels.
Total revenue for the year ending September 2024 crossed the $1.5 billion mark for the first time in 138 Student Living’s nine years of existence. The company made a profit of $350 million, which was only two per cent better than the previous year, its preliminary report shows.
Amid fluctuating occupancy rates, 138 Student Living close its financial year at 98 per cent, but the average occupancy was 82 per cent over the year, a tick above the 81 per cent average rate in 2023.
“We’d love to have 100 per cent all year, which is not possible. But if you’re running a facility like ours, and your average occupancy is 80 odd per cent, then that’s significantly high. That’s good, because remember, three months out of the year, the students have gone home,” Ewan said.
During the holiday break, Student Living generally offers the rooms for short-term rentals to maximise revenue.
“Sporting groups, church groups and others are among those accommodated in a drive to utilise rooms for short-term rental,” Ewan said.
Ewan says the milestone of the highest-ever revenue is significant.
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