SYDNEY (Reuters) - Australia's Navitas Ltd <NVT.AX>, a provider of courses for international students, said U.S. President Donald Trump's immigration policies have led to a 23 percent plunge in enrolments at its U.S. schools, with many students lured to Canada instead.
For the time being, it has seen Canadian enrolments offset losses at its U.S. schools but added that its two Canadian schools were nearly at the point where they could not accept any further increase in student numbers. By contrast, it has seven schools in the United States.
The uncertain outlook comes at a delicate time for Navitas, a provider of English proficiency and other pre-university courses, which booked full-year net profit below analysts forecasts and did not provide guidance for the current business year.
Navitas Chief Executive Rod Jones said while Trump's ban on visitors from six Muslim-majority countries, announced in January, "sent a bit of a shockwave through students", he saw the issue setting down as Trump appeared to be dialling back his rhetoric.
"There is a real uncertainly, particularly in the semesters that started in January and October - in October when it looked liked he'd get in and January when he got in, of: 'Is this the beginning of the end?'", he said in a phone interview with Reuters.
"Certainly the telltale sign will be the September intake, which is the major intake in the U.S," he added.
During the 2016 presidential race, Trump campaigned for "a total and complete shutdown" of Muslims entering the United States. His travel ban, although later blocked by federal courts, has since been partially reinstated by the Supreme Court.
Net profit for the year ended in June fell 10.8 percent to A$80.3 million ($64.4 million) below analysts estimates of A$84.6 million, hurt by a drop in Australian revenue due to the closure of two schools as well as unfavourable currency rates.
That and the lack of upbeat guidance helped send its shares sliding as much as 14 percent to a seven-week low. It later pared losses to end down 10 percent.
Suhas Nayak, an investment analyst at fund manager Allan Gray, which holds 5 percent of Navitas stock, said the long-term prospects for the company and the sector remained positive and he welcomed a review of the company's U.S. colleges after Jones said that a couple might close as they were not that profitable.
"I think that's a good thing from a shareholder's perspective. If they're losing money on particular colleges and they don't see a pathway to profitability, it's probably the right thing to do."
($1 = 1.2475 Australian dollars)
(Reporting by Tom Westbrook in SYDNEY; Additional reporting by Ambar Warrick in Bengaluru; Editing by Sherry Jacob-Phillips and Edwina Gibbs)
