STUDENT housing developer 138 Student Living Jamaica Limited (138 SL) posted a 72 per cent surge in full-year profit to $245.8 million for the year ended September 2025, even as unresolved billing disputes with The University of the West Indies (The UWI) continued to weigh on quarterly revenue, forcing the company to restate three years of financial results.

138 SL said revenue for the year climbed six per cent to $1.39 billion, supported by consistently high occupancy levels across its portfolio, with average occupancy holding firm at 82 per cent and peaking at 99 per cent at year end.

The headline performance, however, masks the ongoing financial drag from negotiations with The UWI over the Irvine Hall restoration concession — talks that have been underway for more than four years and have affected how income, receivables and utilities are recognised in the company’s accounts.

For the September quarter, revenue fell 14 per cent to $318.5 million, a decline the company attributed mainly to reduced income recognition linked to Irvine Hall claims under the concession agreement. Quarterly net profit also slipped to $38.3 million from $50.2 million a year earlier, reflecting the same pressure points.

Despite the softer quarter, full-year operating profit rose 14 per cent to $561.7 million, while finance costs declined by 11 per cent as debt levels continued to trend lower. Long-term loans also fell to $2.6 billion from just over $3 billion a year earlier.

Management said the prolonged discussions with The UWI have now reached an advanced stage and are expected to conclude by the end of the first quarter of the 2025/26 financial year. Once finalised, the reset is expected to bring clearer alignment on operational responsibilities and long-term economics for both parties.

“Our focus remains on operational efficiency, cost discipline, and sustained profitability. With the continued strong demand for safe, high-quality student accommodation, we are confident that 138SL will continue to maintain positive operational momentum in the foreseeable future,” Chairman Ian Parsard said in the preamble to the company’s report.

“Negotiations with The UWI regarding the Irvine Hall Concession Agreement are at an advanced stage and are expected to conclude by the end of first quarter of financial year 2025/ 2026,” he continued.

The dispute centres on the Irvine Hall restoration concession, a long-term public-private partnership under which 138 Student Living, through its subsidiary 138SL Restoration Limited, is responsible for the rehabilitation, operation and maintenance of the historic residence hall at The UWI, Mona under a 35-year agreement.

Under the arrangement, the company invested heavily to restore the facility and operates it as student accommodation, while billing The UWI for agreed services and utilities tied to the concession. Over time, disagreements emerged over the treatment of certain claims, utility charges and income recognition — issues that became more pronounced as costs rose and occupancy rates fell during the COVID-19 period.

The drawn-out negotiations have already reshaped the company’s financial history. During the year, 138 Student Living restated its 2022, 2023 and 2024 results to reflect adjustments for claims against The UWI and retrospective utility charges, cutting previously reported profits but sharpening the accuracy of its earnings base.

— Karena Bennett