Abu Dhabi’s Alef Education Holding has announced its second set of financial results since its successful IPO in June 2024.
For the period ending 30 September 2024, the company reported an 8 per cent increase in adjusted profit before tax to AED 379 million ($103.2 million), on the back of revenues rising revenues 2.5 per cent to AED 551 million ($150 million).
This excludes income from an investment over the first nine months of 2023 that has now been discontinued.
Alef Education drives growth
Alef Education’s strong performance was driven by a solid revenue foundation from long-term contracts and a focus on achieving significant cost efficiencies throughout its operations.
A key factor to its revenues is the long-term investment-grade contract with the Abu Dhabi Department of Education and Knowledge (ADEK). The contract, which provisions for a minimum of 80,000 students with a fixed fee per student, will continue to provide reliable revenue over the next seven years (the number of years remaining on the contract).
A focus on cost-cutting and operational efficiency led to significant savings, resulting in Adjusted EBITDA rising to AED 395 million (Adjusted EBITDA margin of 72 per cent). Adjusted net profit margin reached 69 per cent.
Costs declined by 4.5 per cent to AED 182 million ($49.5 million), down from AED 191 million ($52 million) last year.
Geoffrey Alphonso, Chief Executive Officer of Alef Education, commented: “Our performance during the first nine months of 2024 underscores the resilience and strength of our business model.
“The consistent revenue growth, driven by long-term strategic contracts such as our agreement with ADEK, provides a solid foundation for continued stability and confidence in our operations. Strong operational efficiency and disciplined cost management have been key to our exceptional EBITDA and net profit growth, reinforcing our competitive position.
“Looking ahead, we are excited about the opportunities to expand both organically and through strategic partnerships.”
The company issued a promising outlook because of new opportunities. Revenue is expected to see a significant boost from a new government contract in the UAE, with the total value exceeding AED 30 million ($8.17 million). The contract focuses on developing and delivering tailored educational content.
In 9M 2024, Alef Education converted approximately 13 per cent of its 1.2 million users to paid subscriptions, resulting in more than 150,000 paid users across the Alef Education platform. This achievement was fuelled by significant contract wins and a twofold increase in B2B product sales. The number of unique paid schools in the UAE doubled from 82 to 164 this year.
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