The consolidated 2019 net operating result for the University of Western Australia and its subsidiaries was $121.0 million, representing an operating margin1 of 11 per cent. This result was predominately driven by favourable investment returns of $128.5m.

Sector overview

The Australian higher education sector has faced increasing funding challenges, with continued government reforms and increased competition from within both the sector and industry amongst key challenges. More recently, geopolitical, environmental, regulatory and disease factors have also influenced revenue streams, most particularly COVID-19.

The University’s Strategic Plan recognises these challenges and embeds sustainable operations as a key pillar to success. This includes diversifying revenue streams, managing efficient and effective cost bases and prioritisation of investment into world-leading teaching and research, building capacity for investment in current and future generations of staff, student and alumni.

The year ended 31 December 2019, was the first year of planning our enabling strategies and considerable strategic investment was made in “Be-inspired” academic positions, capital investment into EZONE and fundamental information technology.

Ensuring careful financial management and a commitment to reinvest funds for the benefit of our sustainable education, research and engagement is critical to our success.

Consolidated Net result

The reported net surplus of $121.0 million and EBITDA^2 of 16.3% incorporates a significant return from our investment portfolio, grant income of a restrictive and/or capital nature and funds from philanthropic resources. These funds are predominately tied to specific purpose and therefore not generally available to support the underlying operations of the University.

A summary of key movements in the consolidated net result between 2018 and 2019 is shown in the below chart.

Global equity markets performed strongly during 2019, with major stock indexes reaching all-time highs from declining trade tensions and easing geopolitical headwinds. Strong investment returns result in large operating surpluses for the sector, however most of the return is earned by restricted funds that are not available for core teaching and research operations.

The 2019 net result has also been favourably impacted by the application of new accounting standards to the recognition of donation income for capital projects. The full impact of the new standards are disclosed in note 1.4 of the financial statements.

Changes in net result

2019 net result 29.1
Investment returns 100.2
Donation income 20.9
Employee costs (15.2)
Student income (6.3)
IT investments (6.3)
Capital depreciation (3.9)
Other 2.5
2019 net result 121.0
Income up $149.3m on FY18
Net result up $91.9m on FY18
Underlying result down $13.8m on FY18

Underlying result

The University monitors its financial performance using a financial measure referred to as the ‘underlying result’, which is widely used by the Australian Group of Eight universities as a measure of a university’s capacity to operate sustainably. The underlying result adjusts the University’s net result for items that are one off or restricted in nature. The table below shows a reconciliation from net result to underlying result.

Balance sheet

The University’s consolidated financial balance sheet has net assets of $2.10 billion.

This includes a significant University investment portfolio invested across cash and other financial assets (2019: $922 million, 2018: $872 million) of which 90 per cent is tied to specific purpose. Investment in modernising our campus and digital infrastructure has also increased capital expenditure and intangible assets by $19.5 million during the year.


The University borrows funds to support its long-term capital program activity. The University’s debt to equity ratio is 6.4 per cent (2018: 7.3 per cent), with borrowings established through debt facilities with the Western Australian Treasury Corporation (WATC). Total debt facilities established between the University and WATC are $189.3 million, with $133.1 million drawn as at 31 December 2019. On 15 January 2020, the University drew down a further $36 million in support of the construction of EZONE, amongst other capital activities.

Future financial performance

The emergence of the COVID-19 (Novel Coronavirus) and its impact on the global economy and associated restrictions on international travels will have a significant impact on the University’s sustainable operations in 2020. The impacts of COVID-19 has caused global disruption with international enrolments at universities compromised, along with shocks to returns on investment portfolios and impacts on supply chains to operate core activities. The University is working actively to mitigate these risks.

In comparing performance across the sector, it is also important to note that the University did not early adopt the application of the new revenue standards to Research Grants, as disclosed in note 7.8 of the financial statements. This will influence revenue recognition from research grants in future periods.

Reconciliation from net result to underlying result

2019 $m 2018 $m 2017 $m 2016 $m 2015 $m 2014 $m 2013 $m 2012 $m
Consolidated operating result 121.0 29.1 81.8 25.9 33.1 91.7 124.8 102.2
Less subsidiaries (9.3) (0.5) (0.4) (0.1) (0.7) (0.5) (0.0) (0.4)
University operating result 111.7 28.6 81.4 25.8 32.4 91.2 124.8 101.8
Adjusted for:
Gifted funds and capital grants (103.3) (9.5) (88.5) (44.3) (54.4) (60.1) (95.1) (81.2)
Investment funds and reserves 20.0 4.0 1.1 (3.2) (1.5) (12.7) (20.5) (21.4)
Research and other specific grants (32.4) (12.3) 14.3 (4.4) 2.5 (2.5) (8.0) (7.7)
Extraordinary items* 6.0 - 9.8 24.3 17.0 - - -
Underlying result 3.0 10.8 18.0 (1.8) (4.0) 15.9 1.2 (8.5)

*Extraordinary items from time to time consist of significant impairment charges, losses from discontinued operations and/or costs of organisational change. The 2019 extraordinary items include $3.5m for discontinued operations relating to the accounting treatment of the Perth Festival becoming a wholly owned subsidiary and $2.5m from organisational change costs.