BEIJING, June 3 /Xinhua-PRNewswire/ -- New Oriental Education & Technology Group Inc. (NYSE: EDU), the largest provider of private educational services in China, today released a statement on the impact of the May 12, 2008 earthquake in Sichuan province and the 2008 Beijing Olympic Games.
China is currently dealing with its largest natural disaster in a generation, and the entire nation is mobilized in response to the earthquake in Sichuan and in preparation for the Beijing Olympics in August. New Oriental has received an unusually large number of inquiries from investors and analysts regarding the impact of these two events on the Company’s business. These events have created a number of short-term challenges, but the Company remains confident in the long-term success of the business.
Sichuan Earthquake
The Sichuan earthquake is dominating the attention and priorities of the entire nation, and has created an urgent sense of national responsibility, which has driven millions of young people to raise millions of dollars for quake relief and, in many cases, travel themselves to Sichuan to assist in the relief efforts. New Oriental, its employees and staff have contributed RMB15 million to earthquake relief and the Company has also sent volunteer teachers and staff to the quake area to help set up “Hope Schools” and other services for quake victims.
New Oriental has twelve schools and learning centers in Sichuan province - six in Chengdu and six in Chongqing - which account for slightly less than three percent of the Company’s revenues. The schools suffered minor damage and are expected to reopen next month.
With the nation’s attention focused on the disaster in Sichuan, quake relief has taken priority over personal endeavors such as test preparation and studying. New Oriental, in the two weeks after the earthquake, has seen a noticeable nationwide decrease in the number of students enrolling in new classes compared to the Company’s own internal estimates, a trend which was especially pronounced during the three days of official mourning from May 19 to 21, 2008. New Oriental is hopeful that the trend will reverse itself, and expects enrollments to recover in June as preliminary relief efforts are completed and the nation returns to a more normal state.
The Company noted that there would be no material adverse financial impact from the Sichuan earthquake for the fourth quarter ended May 31, 2008. While the earthquake may affect enrollments in the coming months, the Company does not expect any long-term negative impact on its business as a result of the earthquake.
Beijing Olympics
The Beijing Olympic Games are scheduled to take place for two weeks from August 8 to 22, 2008. In an effort to reduce traffic congestion and pollution, the Beijing government will institute certain transportation restrictions starting in early July. During the Olympic Games, many roads in and around Olympic venues will have restricted access or will be closed to the public, making it less convenient for New Oriental students to attend classes.
Additionally, college and university students in Beijing must vacate their dorms from July 9, 2008 until the end of summer as a security measure. Normally, students from both Beijing and outside of Beijing attend New Oriental summer programs during this period. The Company has begun marketing to students located outside of Beijing to encourage them to attend New Oriental programs in other Chinese cities such as Shanghai, Tianjin and Zhengzhou. The Company plans to increase capacities in those cities during the summer months. Beijing accounts for approximately 35 percent of New Oriental’s revenue, and the summer quarter accounts for approximately 40 percent of annual revenues.
New Oriental schools and learning centers in Beijing will remain open during the summer. Prior to the Sichuan earthquake, New Oriental was seeing strong demand in the vast majority of its schools for the summer quarter, with enrollments in Beijing showing slower growth as expected due to the Beijing Olympics. As previously mentioned, this demand has slowed noticeably in the two weeks following the earthquake, but the Company expects the slowdown to be temporary and for enrollments to recover in the summer. New Oriental does not expect any long-term, material, adverse impact to its business as a result of the Beijing Olympic Games.
About New Oriental
New Oriental is the largest provider of private educational services in China based on the number of program offerings, total student enrollments and geographic presence. New Oriental offers a wide range of educational programs, services and products consisting primarily of English and other foreign language training, test preparation courses for major admissions and assessment tests in the United States, the PRC and Commonwealth countries, primary and secondary school education, development and distribution of educational content, software and other technology, and online education. New Oriental’s ADSs, each of which represents four common shares, currently trade on the New York Stock Exchange under the symbol "EDU." For more information about New Oriental, please visit http://english.neworiental.org .
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Statements that are not historical facts, including statements about New Oriental’s beliefs and expectations, are forward-looking statements. Forward- looking statements involve inherent risks and uncertainties. Information regarding these risks and uncertainties is included in our registration statement on Form F-1 and other documents filed with the Securities and Exchange Commission. New Oriental does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of June 3, 2008, and New Oriental undertakes no duty to update such information, except as required under applicable law.
For more information, please contact:
In China:
Ms. Sisi Zhao
New Oriental Education and Technology Group Inc.
Tel: +86-10-6260-5566 x8203
Email: zhaosisi@staff.neworiental.org
Mr. Derek Mitchell
Ogilvy Public Relations Worldwide
Tel: +86-10-8520-6284
Email: derek.mitchell@ogilvy.com
In the United States:
Mr. Thomas Smith
Ogilvy Public Relations Worldwide
Tel: +1-212-880-5269
Email: thomas.smith@ogilvypr.com
