Asia Strategic Holdings Reports Positive Adjusted EBITDA for First Time in Interim Results

Asia Strategic interim results: first positive adjusted EBITDA, but currency translation muddies the picture

Asia Strategic Holdings has delivered a genuinely important milestone in these interim results – positive adjusted EBITDA of $1.3 million for the first time, compared with a $0.3 million loss a year earlier. Adjusted EBITDA is a profit measure that strips out interest, tax, depreciation and amortisation, and in this case management also highlights it as a marker of underlying trading progress.

That is the good news, and it does matter. The less flattering headline is that reported revenue fell 18% to $13.1 million and the group still made a net loss of $2.2 million. So this is not a clean, simple turnaround story yet – but it is a much more interesting set of numbers than the top line alone suggests.

Key figure	6M26	6M25
Revenue	$13.1 million	$16.0 million
Gross profit	$7.8 million	$9.4 million
Gross margin	59%	59%
Net loss	$2.2 million	$3.7 million loss
Adjusted EBITDA	$1.3 million	$0.3 million loss
Operating cash flow	$2.9 million	$2.1 million
Cash at period end	$1.2 million	$1.2 million at 1 October 2025, as restated

IAS 21 Myanmar exchange rate change: why Asia Strategic revenue looks worse than the underlying business

The biggest accounting issue here is the adoption of the amended IAS 21 rules on lack of exchangeability. In plain English, Asia Strategic now translates its Myanmar operations using a more market-based Myanmar Kyat rate of roughly MMK 3,600 to MMK 3,650 per USD, instead of the official MMK 2,100 reference rate used before.

That matters a lot because it makes Myanmar revenue, assets and liabilities look smaller in US dollar terms. Management says group revenue would have increased by 3% if the old reference exchange rate had been applied. So the reported decline is real in accounting terms, but it does not tell the full operational story.

My take: investors should not ignore the revenue drop, but they also should not treat it as a collapse in demand. This is mainly an exchange-rate translation reset, not a business falling apart.

Asia Strategic education division results: strong student growth, better margins, and a split between winners and laggards

The Education division remains the engine room, contributing 77% of group revenue and 93% of gross profit. Revenue here fell 20% to $10.1 million, but gross margin improved to 72% from 70%, which is a healthy sign that the schools are maturing and costs are being managed better.

Student numbers also moved in the right direction. The group ended March with 37 schools and 10,970 students, up from 32 schools and 9,910 students a year earlier. That is the sort of operational progress you want to see backing up the profit improvement.

Vietnam education: Wall Street English still heavy, Kids&Us and Logiscool doing the running

Vietnam Education revenue fell 10% to $3.6 million. The weak point is clearly Wall Street English Vietnam, where revenue dropped 16% to $3.0 million as students continue shifting towards lower-priced online delivery.

The company is responding sensibly with centre relocation, staff restructuring and a commercial reset. That sounds pragmatic rather than panicked, but it also tells you this turnaround is still a job in progress.

The brighter part of Vietnam is the newer brands. Kids&Us Vietnam grew revenue 32% to $0.6 million, while Logiscool Vietnam grew 70% to $77,000, albeit from a small base. That gives Asia Strategic a more balanced education portfolio over time, which is a positive.

Myanmar education: local growth is strong even if the US dollar numbers look rough

Myanmar Education revenue fell 24% to $6.5 million in reported dollars, but the underlying picture was better. The Myanmar education brands, excluding Yangon American, grew 22% in local currency terms.

There were some standout performers. Logiscool Myanmar actually managed to grow 39% in USD terms to $0.5 million, while Yangon American rose 27% to $1.1 million. Yangon American also opened its Bahan campus and secured IB Middle Years Programme authorisation, which strengthens its premium positioning.

Not everything was rosy. Wall Street English Myanmar fell 34% in USD terms to $2.7 million, and Auston fell 37% to $1.8 million, even though both grew in local currency. That is where the exchange-rate hit really bites.

Asia Strategic services division results: stable enough, but not the growth story

The Services division remains the weaker sibling. Revenue declined 13% to $3.0 million, and gross margin slipped to 17% from 18%.

EXERA Myanmar lost some larger USD-denominated contracts and benefited less from risk reporting as security conditions improved. Even so, it employed about 2,280 service personnel across about 280 sites at the period end, up from about 1,930 personnel across about 250 sites at 30 September 2025.

That tells me the business is still active and relevant, but pricing pressure is real. This division looks more like a steady support act than the main value driver.

Asia Strategic cash flow and balance sheet: better cash conversion, but still not bulletproof

One of the strongest lines in this RNS is cash generation. Operating cash flow was positive at $2.9 million, up from $2.1 million, helped by advance payments in education. Deferred revenue – cash received before lessons or services are delivered – stood at $14.5 million, including $10.7 million current and $3.8 million non-current.

That is useful because it shows customers are paying up front. In a business like education, that gives working capital support and can make the model more resilient than the profit line alone suggests.

Still, I would not call the balance sheet comfortable. Cash and cash equivalents were just $1.2 million, and the group still relies on a $4.5 million loan facility from its largest shareholder, MACAN, with $818,000 still available. No extra drawdowns were made in the period, which is encouraging, but the reliance is there.

There is also a wrinkle in the numbers: a $0.9 million loss allowance on trade and other receivables linked to an affiliated entity. Strip that out, and adjusted net loss was $1.3 million. Leave it in, and it is a reminder that this is still a complicated group with some financial baggage.

What Asia Strategic investors should watch next after these interim results

My overall view is cautiously positive. The first positive adjusted EBITDA is a real milestone, student growth is solid, margins in Education are improving, and cash flow is moving the right way.

But there are two important caveats. First, adjusted EBITDA after impact of right-of-use assets was still negative $0.6 million, so lease-heavy economics are still dragging on true profitability. Second, the company remains exposed to Myanmar political, economic and currency risk in a big way.

If Asia Strategic can keep growing deferred revenue, push newer education brands harder, and continue fixing Wall Street English Vietnam, this could become a much stronger story. For now, I would describe these interim results as encouraging progress rather than mission accomplished.

No dividend has been declared, which is sensible. At this stage, cash needs to stay inside the business.