PETALING JAYA: Berjaya Corporation Bhd (BCorp) registered revenue of RM2.78 billion and pre-tax profit of RM778.31 million in the third quarter ended March 31, 2024 (Q3’24).
This marked a significant increase from revenue of RM2.50 billion and pre-tax profit of RM82.20 million reported in the corresponding quarter of the previous year.
The group’s financial results in the quarter under review was contributed by the following segments:
Retail (Non-Food) posted higher revenue, mainly contributed by H.R. Owen Plc although the luxury car retailer reported lower revenue in its reporting currency, the pound sterling. The lower revenue was due to reduced sales of used cars, but this was partially mitigated by higher aftersales revenue. However, due to the favourable foreign exchange effect, HR Owen reported higher revenue when converted into ringgit. The segment also reported a higher pre-tax profit mainly due to HR Owen’s increased pre-tax profit which was attributed to the better profit margin earned from new car sales as well as profit improvement resulting from full resumption of its aftersales operations following the completion of its aftersales outlets relocation.
Retail (Food) reported a pre-tax loss due to the current sentiment in relation to the conflict in the Middle East, in line with the lower revenue reported in the current quarter under review.
Property reported a notable increase in revenue and pre-tax profit in the current quarter, mainly due to higher sales of overseas residence units compared to the previous year’s corresponding quarter.
Hospitality posted a higher revenue mainly due to the higher overall average room rates and higher overall occupancy rates during the current quarter under review with the surge in tourist arrivals, boosted by visa exemption for certain countries. However, despite the revenue growth, the segment reported lower results attributed to the higher operating expenses incurred.
Services experienced higher revenue in the current quarter, mainly due to higher earnings recorded from the managed telecommunications network services, and cloud and Internet-of-Things business.
Additionally, the gaming business, operated by STM Lottery Sdn Bhd reported higher revenue in the current quarter mainly due to higher sales per draw coupled with an additional draw conducted (42 draws versus 41 draws in last year’s corresponding quarter).
The segment reported a higher pre-tax profit, which was mainly due to the higher sales achieved and coupled with the lower prize payout by STM Lottery in the current quarter.
Additionally, the gain on disposal of a subsidiary company amounted to RM497.91 million and gain on remeasurement of retained equity interest in a former subsidiary company of about RM154.05 million also contributed to the higher pre-tax profit reported in the current quarter under review.
For the nine-month period ended March 31, 2024, the group registered revenue of RM7.58 billion and pre-tax profit of RM765.46 million compared to revenue of RM7.08 billion and pre-tax profit of RM281.87 million in the corresponding period of the previous year.
The group’s financial results in the nine-month period under review was contributef by the following business segments:
Retail’s primary contributor to the increased revenue for non-food retail business was HR Owen. Despite HR Owen’s revenue being lower in the current period compared to the previous year corresponding period, a favourable foreign exchange effect led to an increase in revenue when converted to ringgit. The lower pre-tax profit reported for this segment was also mainly due to HR Owen reporting a pre-tax loss, as opposed to a pre-tax profit in the previous year corresponding financial period. The decline was primarily attributed to higher operating costs resulting from inflationary pressures coupled with higher depreciation following the completion and full operation of the Hatfield Centre, as well as the impact of the interest rate hike in the United Kingdom during the period under review.
The food retail business posted a lower revenue and incurred a pre-tax loss were primarily due to the reason mentioned earlier.
Property reported a higher revenue and pre-tax profit in the current period, primarily attributed to higher sales of overseas residence units.
Hospitality posted a higher revenue due to the higher overall average room rates and the full-period revenue contribution from the Iceland Parliament Hotel, which commenced its operations in December 2022. The better performance was in tandem with the higher revenue achieved in the current financial period.
The primary contributor to higher revenue for Services was the MTNS and cloud & IoT business. Additionally, STM Lottery reported higher revenue despite conducting fewer draws during the current period under review (126 draws compared with 135 draws in the previous year corresponding period). This growth was attributed to higher sales per draw, driven by increased sales from higher accumulated jackpot prizes. Its higher pre-tax profit in the current period under review was attributed to the higher sales achieved combined with lower prize payout by STM Lottery.
In addition, the total exceptional gain of about RM651.96 million as mentioned above also contributed to the higher pre-tax profit reported in the current period under review.
On prospects, BCorp said Malaysia’s economic growth is expected to be driven by strong domestic demand and the moderation of average inflation rate despite the uncertainties arising from geopolitical tensions. It said the group will monitor prevailing global and local political developments in the countries where it has business operations.
The performance of the domestic business segments of the group is expected to improve on the back of strong consumer spending and improvement in tourism activities. As for the gaming business, the closure of legal Number Forecast Operation outlets in Kedah and Perlis will result in the proliferation of illegal operators in these underserved areas.
BCorp directors are cautiously optimistic that the group’s performance for the remaining quarter of the financial year ending June 30 2024 would be satisfactory.
