It may be good news for parents of school-age children, but Dubai’s education regulator’s decision to freeze tuition fees again in 2022 is bad credit for the biggest provider. of education, GEMS MENASA Caymen Ltd (GEMS), according to Moody’s.
The Knowledge and Human Development Authority (KHDA) announced last week that schools would not be allowed to raise tuition fees this year. The last authorized fee increase was for the 2019-20 academic year.
“This decision is negative for GEMS as it will limit its potential for organic growth for the 2022/23 academic year,” the agency said in an update.
“The announcement contrasts with the broader economic growth and inflationary environment in Dubai and the UAE.”
Moody’s said the latest Cost of Education Index “The latest Cost of Education Index (ECI), which measures annual increases in school costs and includes salaries, rent and utilities, has been set. at -1.01% by the regulator.
But data from the Federal Center for Competitiveness and Statistics showed a 2.5% increase in the Consumer Price Index (CPI) at the end of 2021 in the UAE.
“Failure to raise tuition fees in Dubai will hamper GEMS revenue and EBITDA growth in 2022/23, as the emirate has 26 of GEMS’ 60 schools and approximately two-thirds of its students” , the agency said.
Moody’s said yesterday that Abu Dhabi’s school regulator has not yet announced whether a tuition increase will be allowed for schools in the emirate for the coming school year.
GEMS, headquartered in Dubai, and has $900 million of senior secured notes listed on the Guernsey International Stock Exchange (TISE), has schools with a total of 119,000 students in the Middle East, Europe, India, Africa, Southeast Asia and North America, according to its website.
(Writing by Imogen Lillywhite; editing by Daniel Luiz)