TA Enterprise and TA Global sink deeper into the red with bleeding hotel division

KUALA LUMPUR (Nov 18): Bleeding hotel operations continued to drag the third quarter ended Sept 30, 2020 (3QFY20) of TA Enterprise Bhd (TAE) and its 60% subsidiary TA Global Bhd deeper into the red.

In a bourse filing, TAE said quarterly loss increased to RM65.76 million in 3QFY20 from RM14.94 million in net loss seen in 3QFY19.

Quarterly loss per share (LPS) rose to 3.84 sen from 0.87 sen seen in the corresponding quarter last year. This brought cumulative LPS for the nine months ended Sept 30, 2020 (9MFY20) to 14.98 sen, compared with earnings per share (EPS) of 7.57 sen in the corresponding period in the last financial year.

Meanwhile, revenue for the quarter was down by 14.56% at RM189.72 million from RM222.06 million in 3QFY19.

Breaking down its results, TAE said loss from its hotel operations division dragged down its results despite registering profits in its other business divisions.

TAE's hotel operations registered a net operating loss (excluding forex loss) of RM185.2 million, from a net operating profit (excluding forex gains) of RM17.4 million in 3QFY19.

The group also saw loss widen on a quarterly basis from the RM42.03 million net loss posted in 2QFY20. With that being said, revenue did increase by 82.02% quarter-on-quarter (q-o-q) from RM104.23 million in the immediate preceding quarter.

Loss in its hotel segment continued to weigh on its results, as well as impairment losses from its hotel properties in China, Canada and Thailand.

Meanwhile, forex loss between the Thai baht and US dollar and lower forex gains seen from the translation of Australian dollar and Canadian dollar balanced against the ringgit.

TAE posted a net loss of RM256.43 million in 9MFY20 from the net profit of RM129.63 million achieved in the corresponding nine months last year. Revenue for the period was down by 21.77% at RM501.48 million, from RM641.07 million in 9MFY19.

Meanwhile, TA Global Bhd posted a net loss of RM162.39 million in 3QFY20, versus a net profit of RM6.39 million in 3QFY19. The quarterly loss was attributed to impairment loss amounting to RM179.6 million being applied against its hotel division.

LPS stood at 3.05 sen, from EPS of 0.12 sen in the corresponding financial quarter last year, whereas cumulative LPS in 9MFY20 stood at 6.64 sen, from EPS of 2.58 sen in 9MFY19.

Meanwhile, revenue was down by 54.51% at RM87.42 million, from RM192.16 million.

On a quarterly basis, TA Global's loss ballooned more than 10 times from the RM5.25 million registered in 2QFY20, despite revenue increasing by 70.85% from RM51.17 million in 2QFY20.

Like its parent, TA Global attributed the higher q-o-q loss to impairment loss and hotel operating loss, on top of forex loss suffered from the conversion of Thai baht balances against the US dollar.

For 9MFY20, TA Global recorded a net loss of RM353.59 million, versus a net profit of RM137.13 million in 9MFY19. Revenue also declined by 45.52% at RM295.05 million, from RM543.11 million.

"As the group's revenue is mainly derived from property and hospitality sectors spanning across six countries, Malaysia, Australia, Singapore, China, Thailand and Canada, the general economic outlook of these countries, the global economic trend and the impact of Covid-19 on various business industries will charter the future prospects, sustainability and viability of the group's property development, property investment and hospitality business," TAE and TA Global said on their prospects.

Shares in TAE finished 0.85% or half a sen higher at 59.5 sen, valuing it at RM1.02 billion. On the other hand, TA Global shares were down by 1.89% or half a sen at 26 sen, yielding a market capitalisation of RM1.38 billion.

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