Chinese private education and training company New Oriental on Tuesday night announced its financial report for the first half of fiscal year 2021-2022. During the reporting period, New Oriental achieved revenue of $1.967 billion, compared with $1.874 billion in the same period last year. The net loss was $876 million, compared with a net profit of $229 million in the same period last year. According to financial data, New Oriental’s current cash and cash equivalents total $1.027 billion.
In addition, the financial report shows that as of November 30, 2021, New Oriental’s half-year operating costs and administrative expenses were $2.7 billion, compared with $1.755 billion in the same period of last year. Among them, the company’s half-year general and administrative expenses reached $1.292 billion, compared with $587 million in the same period last year.
The “general and administrative expenses” refer to office rent, water and electricity, as well as equipment depreciation. In January 2022, founder of New Oriental Michael Yu revealed that last year, the firm’s market value dropped by 90%, the operating income decreased by 80%, 60,000 employees were laid off, and cash expenses such as tuition refund, employee termination costs and teaching site rent refund were nearly 20 billion yuan ($3.16 billion).
In fiscal year 2020 and 2021, the K12 education business revenue of New Oriental Online was 295 million yuan and 787 million yuan, respectively, and the total revenue of all branches of the company in the same period was 1.081 billion yuan and 1.419 billion yuan, respectively. According to the company, in the past two fiscal years, the K9 business accounted for 58%-73% of K12 division.
New Oriental reported that all training centers have now stopped providing K9 discipline-related services. This has had a significant adverse impact on the company’s total revenue for the six months ended November 30, 2021.
According to the official website of New Oriental, its main businesses are divided into three sections: college examination (including CET-4 and CET-6 and postgraduate entrance examination), international education and general English courses. New Oriental also provides many newly developed services such as international study tours, family education and books. At present, these new businesses have not been reflected in the financial report.
New Oriental Online, with a listed company in Hong Kong as the main body, established the “Dongfang Zhenxuan” live commerce platform, aiming to transform into an e-commerce company focusing on agricultural products. The platform also provides value-added services for farmers all over the country, serving as a platform linking farmers and consumers. According to data analytics platform NewRank Data, since its commencement on December 28, Dongfang Zhenxuan has launched a total of 335 goods, with a cumulative sales volume of only 4,547,600 yuan and 81,400 individual pieces.
Michael Yu wrote on February 22: “This week, we held eight business work meetings to review the past and think about the future development within the company for different business lines. All new businesses and transforming businesses began to advance step by step after the initial hectic period, and some of them have seen early results. New Oriental workers have the kind of courage not to admit defeat, not to buy it, and have the spirit of seizing every opportunity. With them, I believe New Oriental can develop continuously.”