Tanco-led STI Education Services Group Inc. (STI ESG) has retained the Issue Credit Rating of PRS A plus from Philippine Rating Services Corporation (PhilRatings) for its outstanding bond issuance of P820 million.
PhilRatings said this is based on its on-going and initial review of the account adding that, “after careful consideration, it has decided to assign a Positive Outlook given developments in relation to STI ESG.”
Obligations rated PRS A have favorable investment attributes and are considered as upper-medium grade obligations.
Although these obligations are somewhat more susceptible to the adverse effects of changes in economic conditions, the obligor’s capacity to meet its financial commitments on the obligation is still strong. The “plus” further qualifies the assigned rating.
A Positive Outlook, on the other hand, means there is a potential for the present credit rating to be upgraded in the next 12 months.
Factors considered by PhilRatings for the assignment of its latest outlook include STI ESG’s improved profitability supported by the increasing number of enrollees and its satisfactory capitalization with additional room for debt.
Also factored in is the firm’s effective cost management strategies across its network of schools and the timely servicing of its seven-year P2.18 billion bonds through the pandemic and the eventual settlement in March 2024.
STI ESG’s revenues consistently increased from P2.1 billion in fiscal year (FY) ending June 30, 2022 to P3.7 billion in fiscal year 2024, translating to a compound annual growth rate (CAGR) of 33.3 percent.
The company’s net income likewise significantly grew from P253.3 million in 2022 to P1.3 billion in 2024, representing a CAGR of 124.4 percent.
PhilRatings noted the pronounced improvement in STI ESG’s performance in the past three fiscal years, as opposed to its volatile profitability from 2011 to 2021. In 2024, STI ESG also posted its highest net income since 2011.