July 26, 2019
International ratings agency affirms UOW’s AA credit rating
Stable outlook reflects University’s robust financial profile
The University of Wollongong’s (UOW) financial position remains robust according to the latest S&P Global Ratings announcement.
On Wednesday 24 July, the international ratings agency affirmed UOW’s AA rating, highlighting its solid market position, consistently sound operating margins, high level of financial resources, and relatively low annual debt service.
The agency pointed out that the stable outlook “reflects our expectation that UOW’s enterprise and financial profiles will remain strong during the next two years”.
S&P cautioned that downward pressure on the rating could occur if there is a substantial decline in student demand, if UOW’s international operations weaken its credit profile or if there is a major downturn in cash and financial investments.
S&P also said that the outlook reflected its view that UOW's important role and strong link to the Australian government was likely to remain unchanged.
Commenting on the ratings announcement UOW’s Chief Finance Officer, Damien Israel, said it was a welcomed reaffirmation of UOW’s financial standing.
Mr Israel emphasised that S&P referenced the University was one of only a handful in Australia to offer an accommodation guarantee for new commencing undergraduates.
He said the agency’s report reflected on the University’s strength in applied research, noting in comparison to other universities, UOW earns a higher proportion of research income from the private sector.
“The global rankings agency also noted, unlike most of its Australian peers, UOW is also a multinational university with substantial offshore operations,” Mr Israel said.
UOW is a member of the University Global Partnership Network and, in 2017, joined with two other universities in NSW to form the NUW Alliance.
In 2018, UOW announced its intention to acquire a majority equity interest in three university colleges in Malaysia, which cater to around 6,000 students. UOW intends to rebrand the colleges as University of Wollongong Malaysia, and to introduce new undergraduate and postgraduate programs. S&P understands the deal has been approved by the Malaysian ministry of education and should settle in 2019.
UOW is in the midst of a relatively large infrastructure program. Its 2016-2020 Strategic Plan outlines a capital expenditure budget of $300 million over five years. In 2019, construction started on a new building for social sciences, law, humanities, and the arts and in 2018, the first sod was turned on the new Molecular Horizons life sciences building.
In addition to its Wollongong and Innovation campuses, located in Wollongong, UOW operates campuses in Sydney’s CBD, South Western Sydney, the Sutherland Shire and the regional NSW localities of Bega, Batemans Bay, the Shoalhaven and the Southern Highlands.
UOW recently celebrated 25 years of its campus in Dubai, UAE, having been the first Australian university to establish a presence in the Middle East. It currently has some 3,900 students.
In 2015, UOW assumed stewardship and governance of the Community College of City University in Hong Kong, which has been rebranded as UOW College Hong Kong and currently enrols about 6,000 students.