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Higher expenses push Berjaya Assets into losses in 2Q

KUALA LUMPUR (Feb 28): Berjaya Assets Bhd slipped into the red in its second quarter ended Dec 31, 2017 (2QFY18), mainly due to higher operating expenses incurred by the property development and property investment business segment.

It posted a net loss of RM14.5 million in 2QFY18, against a net profit of RM4.46 million in 2QFY17, even though revenue climbed 18% year-on-year to RM107.7 million from RM91.5 million following the disposal of several land parcels held for development.

The lower profit contribution from the gaming segment operated by Natural Avenue Sdn Bhd, in line with lower revenue, also weighed on its profitability.

“The revenue in the gaming business segment was impacted by rampant illegal gambling activities that resulted in a 28% drop in revenue. The revenue of property development and investment business segment remained comparable to that reported in the previous year’s corresponding quarter,” it said.

It added that the hotel and recreation business segment also recorded higher revenue arising mainly from higher occupancy rates of the hotel division and higher theme park ticket sales.

In the first six months ended Dec 31, 2017 (1HFY18), Berjaya Assets's net loss narrowed to RM19.4 million from RM154.3 million in 1HFY17, while revenue edged up to RM187.6 million from RM183.4 million.

Moving forward, its directors expect the property investment, hotel and related businesses as well as the gaming business to maintain its occupancy rates and market shares, respectively.

“The directors envisage that the operating performance of the group for the remaining quarters in financial year ending June 30, 2018, will be challenging,” it said.

As of closing, Berjaya Assets’ share price slid 0.5 sen or 1.04% to close at 47.5 sen yesterday, giving it a market capitalisation of RM1.22 billion. — theedgemarkets.com

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