(Corrects to say 40 percent, not 45 percent of Ser's total students are financed through Fies in 10th paragraph.)
By Ana Mano
SAO PAULO, Aug 5 (Reuters) - Ser Educacional SA, Brazil's third largest listed for-profit education company, reported second-quarter net income rose 30 percent to 63.8 million reais ($19.90 million), helped by an increase in higher value courses and declining dropout rates, according to a securities filing.
The earnings beat a consensus estimate of 56.7 million reais compiled by Thomson Reuters
Net revenues rose 6 percent to 289.6 million reais in the period, mainly due to the rolling out of higher-value graduate courses approved by Brazil's Ministry of Education, according to the filing.
Ser, which offers on-site graduate programs and distance learning courses, reiterated it would continue seeking growth opportunities through acquisitions even after a failed bid to buy rival Estacio Participacoes SA in the second quarter.
Ser Chief Executive Jânyo Diniz told Reuters that the company "is in a better position" than peers to pursue acquisitions after Brazil's two largest players merged. Another potential buyer, Laureate Inc of the United States, is busy preparing an initial public offering, making it unlikely that it would pursue any targets in the near term, he said.
Among other opportunities, Ser is evaluating the acquisition of a 40 percent stake in Unicsul, a privately owned college operator with 160,000 students and a strong presence in Brazil's richest state, Sao Paulo. Ser is being advised by Credit Suisse AG while Unicsul is being advised by Morgan Stanley and Itau Unibanco Holding SA's investment banking unit, Diniz said.
"We are still understanding the Unicsul project. Whether or not they will sell the entire company," Diniz said, adding that Ser prefers to buy majority stakes.
In June, Ser offered Estacio a share swap along with 1 billion reais in cash, but Estacio's board rejected the offer, choosing to merge with market leader Kroton instead.
The Estacio and Kroton tie-up, which still needs regulatory approval, will create Brazil's No. 1 for-profit education player with about 1.6 million students, more than 10 times Ser's size.
Ser's business model relies heavily on government-funded student loans and tax incentives. About 40 percent of the company's student base of 152,000 is financed through such student loans, known as Fies.
Changes to the rules of the Fies program last year caused a surge in dropout rates to 15 percent in the first half of 2015, Alves said. That figure shrank to about 11 percent in the second quarter and is not expected to surpass 12 percent this year, Alves added. ($1 = 3.2058 Brazilian reais) (Reporting by Ana Mano; Editing by Leslie Adler)