Berjaya Land 3Q net loss widens to RM19.7m

KUALA LUMPUR: Berjaya Land Bhd reported a net loss of RM19.72 million for its third quarter ended Jan 31 of financial year 2014 (3QFY14), a 14% increase from a net loss of RM17.29 million in the previous corresponding quarter despite higher revenue. Revenue was up 34.4% to RM1.39 billion.

Berjaya Land attributed the higher revenue to the consolidated revenue of HR Owen, Britain’s largest luxury car dealer, in which its 41.14%-owned subsidiary Berjaya Sports Toto Bhd (BToto) has an indirect stake.

The higher revenue was also contributed by improved overall occupancy and average room rates in its hotels and resorts business, as well as the higher progress billings of its local mixed-use developments from its property development and investment business.

Despite the higher revenue, corporate exercise expenses incurred by BToto pursuant to the cash offer for HR Owen and the higher prize payout recorded by Sports Toto Malaysia Sdn Bhd, as well as the lower profit contributed by its hotels and resorts business, resulted in a weaker pre-tax profit. The group’s pre-tax profit was down 8.9% year-on-year to RM75.4 million.

Berjaya Land’s operating expenses rose 37.7% to RM1.25 billion during the quarter, while finance costs increased 34.3% to RM52.2 million. “However, the above were partly mitigated by the correspondingly higher profit contribution reported by the property development and investment business arising from higher revenue,” it said.

For the nine months ended Jan 31, (9MFY14), Berjaya Land’s net profit rose 481% to RM95.4 million, on the back of an 11% increase in revenue to RM3.45 billion.

Revenue was mostly contributed by its number forecast operations and leasing of lottery equipment (76%), followed by clubs and others (12.6%), hotels and resorts (6.3%), and property investment and development (5.1%). The group also realised a gain of about RM94.7 million from the disposal of Berjaya Singapore Hotel.

Berjaya Land said the group’s performance in the final quarter of its current financial year ending April 30 is anticipated to remain challenging. “The gaming business in Malaysia is expected to remain resilient, and the directors expect BToto group to maintain its market share in the number forecast operation business,” it said.

The group also said it expected its hotels and resorts business to see an improvement in occupancy and average room rates, while the focus of the property development business will be on its overseas projects that are still in their gestation stage.

This article first appeared in The Edge Financial Daily, on March 26, 2014.


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