Abu Dhabi-based Alef Education Holding Plc has announced its financial results for the period ending December 31, 2024, marking the third set of results since its debut on Abu Dhabi Securities Exchange (ADX) in June 2024. The company reported a 6 percent increase in profit before tax to AED491.7 million ($133.9 million), driven by a solid revenue foundation from long-term contracts and a focus on achieving significant cost efficiencies throughout its operations. A key driver of the Company’s revenues, which rose to AED759 million ($206.6 million), is the long-term investment-grade contract with the Abu Dhabi Department of Education and Knowledge (ADEK). This contract—extended by three years in November 2024—will now provide reliable revenue until 2033.
The strategic contract provisions for a minimum of 80,000 students with a fixed fee per student. In addition, it allows Alef Education to charge for actual student numbers above the minimum threshold, providing a clear path for potential increment in revenues.
Reinforcing its leading position as a trusted partner for governments and private schools in the UAE and beyond, Alef Education’s suite of innovative bespoke education solutions continues to garner strong demand.
Cost efficiency and profitability metrics
Alef Education’s strategic focus on cost-cutting and operational efficiency resulted in significant savings, pushing EBITDA to AED512.2 million, a 5 percent year-on-year increase. The Company’s targeted cost-control initiatives, which include streamlining processes and optimizing resource allocation, have been pivotal in achieving this growth. The EBITDA margin stood at an impressive 68 percent, well above industry benchmarks, while its net profit margin reached 65 percent, underscoring the success of its disciplined approach to cost management and strategic focus on profitability.
Geoffrey Alphonso, chief executive officer of Alef Education, commented, “Our strong performance in 2024 underscores the resilience of our business model and the sustained demand for our innovative learning solutions. Revenue growth continues to be driven by strategic, long-term partnerships, including our extended agreement with ADEK, our newly secured contracts with two UAE government clients, and expanding collaborations across both government and private sectors in key markets. These alliances, coupled with our innovative solutions, position us for continued market expansion and creating significant value for our stakeholders. This success is further reinforced by our unwavering focus on operational efficiency and disciplined cost management, resulting in strong EBITDA and net profit growth.”
“Looking ahead, we are committed to seizing new opportunities for expansion, both organically and through strategic partnerships. Alef Education is also dedicated to delivering value to its shareholders through a strong dividend program, ensuring attractive returns while continuing to make a meaningful impact on students globally,” Alphonso further noted.
Read more: Abu Dhabi’s Alef Education’s ADX IPO draws $20 billion in orders, 39x oversubscription
Strong profitability performance boosted by stable revenue base, new government contracts
On a like-for-like basis, excluding 2023 financial investment income related to an investment portfolio, which was discontinued at the end of 2023, the Company recorded a 6 percent increase in profit before tax amounting to AED491.7 million in 2024 compared to AED463.6 million in the previous year. This translates to a profit before tax margin of 65 percent, up by three percent compared to 2023, and remains substantially above industry benchmarks. Robust top-line performance and continuous cost management led to a 5 percent increase in EBITDA to AED512.2 million in 2024. In comparison, costs declined by 5 percent to AED280 million, down from AED294.6 million last year.
The Company is dedicated to driving revenue growth, and its strong outlook is supported by new opportunities. Revenue is expected to witness a substantial boost from three newly secured government contracts in the UAE, with a total value of around AED40 million. These contracts, focused on developing and delivering personalized educational content, further strengthen Alef Education’s strategic relationships with government clients. These recent wins underscore the Company’s commitment to enhancing its value proposition and deepening collaboration with key strategic partners within the B2G segment.
Operational performance and market expansion
The Company demonstrated strong operational performance in 2024 fueled by significant contract wins and a remarkable two-fold increase in B2B product sales. Notably, the number of paid schools in the UAE doubled from 82 to 167 this year. This expansion translates to increased market penetration, with private sector revenues expected to contribute an even larger share in the coming period.
Upholding the commitment made during its IPO, Alef Education guarantees its 20 percent free-float investors a minimum dividend payout of AED135 million for each financial year FY2024 and FY2025—to be distributed on a semi-annual basis. In Q3 2024, AED67.5 million was distributed to free-float investors, bringing the total interim dividends for all shareholders paid to AED203.6 million. With a dividend yield for free-float shareholders reaching approximately 8.7 percent based on recent share price levels, Alef Education continues to offer one of the most attractive returns in the market, reinforcing its focus on maximizing shareholder value.
