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Highlights
- IDP Education shares tumble 15% to a 52-week low following half-year results.
- Adjusted net profit after tax falls 46% to $58.3 million.
- Interim dividend slashed by 64% to 9 cents per share.
Shares of IDP Education Ltd (ASX:IEL) sank 15% on Thursday, hitting a 52-week low of $9.96 after the release of its half-year financial results. The sharp decline in share price reflects investor disappointment over the company’s steep profit drop and ongoing challenges in student placement and language testing markets.
The language testing and student placement provider reported an 18% fall in total revenue, bringing in $475.4 million for the six months ending 31 December. The company’s EBITDA declined by 28% to $124 million, while adjusted net profit after tax plunged 46% to $58.3 million. As a result, IDP’s board cut the interim dividend by 64% to 9 cents per share.
What Drove the Decline?
The revenue drop was largely driven by a 27% fall in student placement volumes, which dropped to 42,016 as government policy changes weighed heavily on demand and conversion rates. At the same time, English language testing volumes declined by 24% to 683,708, with weaker demand in India being a major factor.
However, not all areas of the business contracted — English language teaching volumes rose 1% to 52,946, providing a small bright spot amid the broader downturn.
IDP Education made efforts to rein in expenses, cutting direct costs by 9% and lowering overheads by 14% to $167.8 million. These cost-saving measures improved operating cash flow conversion by 18 percentage points, with 64% EBITDA-to-cash conversion. Yet, these savings weren’t enough to offset the steep decline in revenue and profits.
Outlook for FY 2025
Looking ahead, IDP Education refrained from providing formal earnings guidance for the full year. However, management warned that if current trends persist, international student volumes could fall by 20%–30% in FY 2025 compared to FY 2024.
