Masterskill CEO's Annual Report Statement - like it for his bluntness

I was reading the statement from the CEO of Masterskill, Edmund Santhara. I for once liked it for his candid remark. Read below:

"2011 was an active albeit challenging year for MEGB. We have had to face many uncertainties and unprecedented setbacks in the face of changing regulatory requirements, government decisions that are consistently inconsistent and the global economic slowdown."

It is easy to offer support when times are good, but our resilience and fortitude are definitely put to the test during these challenging times. However, thanks to the continued support and tenacity of our employees, management and shareholders who are true believers in our mission and vision, the professionalism of our practice in healthcare education is upheld. Despite the unprecedented setbacks, I am pleased to report  sustainable profits, strong cash flow, increased assets and undisrupted expansion plans.

Our focus to be the global leader in nursing and allied health education remains unwavering. I sincerely believe that as long as we stay true to our path, the bumps in the road of success only serve to remind us of the need to stay vigilant, adaptable, focused and driven to emerge stronger after the storm.

A CHALLENGING ENVIRONMENT
Unexpected. Challenging. Adapting. These are a few of the words that come to mind when I review the year that was. Unexpected were the reduction in the PTPTN’s loan scheme, the increase in the minimum entry requirement from 3 credits to 5 credits at the Sijil Pelajaran Malaysia (SPM) level by the Malaysian Nursing Board, and the increase in the ratio for teaching staff to student from the previous 1:30 to 1:20 for science programmes, in line with the Malaysian Qualification Agency (MQA) requirement. The PTPTN factor and the higher entry requirement caused the student enrolment at Masterskill to drop which affected the revenue, whereas the new teacher to student ratio increased the staff cost considerably.

Challenging was when the maximum value of PTPTN loans made available to each eligible diploma student was reduced from RM60,000 to RM45,000. Masterskill’s reaction was to reduce the tuition fees for its  diploma programmes to an average of RM50,000 per eligible student.

Adapting being one of the company’s core values, is what we had to do for the journey ahead of us as we broadened our scope of business and expanded ahead of time. Within the year, Masterskill widened its educational offerings through active collaborations.

Some upsides to 2011: The most notable development was the MoU inked with RMIT University, Australia to form a joint educational entity in Malaysia especially to set up a RMIT branch campus in Malaysia. The MoU holds good prospects, as the establishment of an Australian branch campus in Malaysia will cater for the growing demand, locally and abroad, of prospective students who wish to obtain a prestigious degree from a reputable Australian university. This collaboration is under the business diversification strategy in which Masterskill is the local partner for the foreign universitiy to establish a platform in Malaysia. Through this collaborative effort, a Technical Education and Vocational Training programme will also be explored. The components may include programme offerings, curriculum design & development and training of trainers.

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Here are my comments.

1. If it is using the PTPTN to fund the education loan for 95% of its students and make profit from there, this day will come, sooner or later - just that it happened sooner. He cannot blame the government as through Masterskill and MAHSA, they are causing oversupply of nursing students. What should the government do as it has done? Take a step back and evaluate the situation.
2. If the minimum qualification for intake is being improved from 3 credits to 5 credits are to be blamed and cause of its deterioration, this means that the students they have been taking are of low qualifications? How many students does not have 5 credits nowadays? We do not want nurses who have poor basic qualifications, do we?
3. With those type of students they are taking in, are they expecting the RM60,000 loan to be repaid. It is obvious PTPTN is facing these issues from students who are paying too high fees and not affording the repayment when they finished their courses.
4. Will Masterskill then to be able to get good students with the RMIT JV? They better look for higher quality students (and those that can pay back) if this is the case. Only then it will be a palatable education centre.

My worry is that it is currently blaming the poorer financial performance onto the "hand that feeds" it so far - openly. Bad move.