Sports Toto registers RM1.66b revenue for Q3, declares 2 sen dividend

PETALING JAYA: Sports Toto Bhd (SPToto) reported RM1.66 billion revenue in the current quarter under review, registering a drop of 4.2% over the revenue of RM1.73 billion in the previous year’s corresponding quarter. The group also registered RM40 million pre-tax profit, which is a decline of 67.4% from the pre-tax profit of RM122.4 million in the corresponding quarter of the previous year.

The drop in results for the current quarter ended March 31, 2023 was mainly due to the performance of STM Lottery Sdn Bhd (STM Lottery) and H.R. Owen Plc (H.R. Owen) which reported drop in revenue and pre-tax profit as compared to the previous year corresponding quarter.

STM Lottery’s current quarter revenue was lower by 11% as it had fewer draws (i.e. 41 draws versus 43 draws in the corresponding quarter) conducted in the current quarter under review.

In addition, the higher revenue reported in the previous year corresponding quarter was attributable to the Toto Supreme 6/58 lotto game reaching a record accumulated jackpot prize. The drop in pre-tax profit of 69.4% was in line with the lower revenue attained and the higher prize payout in the current quarter under review.

H.R. Owen’s revenue was on par with the previous year corresponding quarter. However, the revenue dropped by 3.5% when converted into ringgit, being the reporting currency of the group, due to the unfavourable foreign exchange effect. Its pre-tax profit was lower by 86.3% to RM4.9 million from RM35.8 million recorded in the previous year corresponding quarter.

Used car sector profit margin softened in the current quarter from the exceptional profit level reported in the previous year corresponding quarter due to the new car supply constraints then. In addition, the company also faced challenges on the impact of continued inflationary costs pressures and higher finance costs arising from interest rate hike in the UK.

In the current 9-month period ended March 31, 2023, SPToto reported a revenue of RM4.5 billion, representing an increase of 18.9% over the revenue of RM3.8 billion reported in the previous year’s corresponding period. The group’s pre-tax profit has also increased by 27.6% to RM242.1 million over the pre-tax profit of RM189.8 million reported in the previous year’s corresponding period.

The higher revenue was mainly attributed to better performance attained by STM Lottery but partially set off by H.R. Owen’s results in the current period under review.

STM Lottery registered revenue and pre-tax profit growth of 47.7% and 57.6% respectively as compared to the previous year corresponding period. The improved results was primarily attributed to the full resumption of business operation in the current period ended March 31, 2023 whilst the previous year corresponding period business operations were adversely affected following the cancellation of thirty seven (37) draws with the imposition of nationwide lockdown from June 1, 2021 to September 13, 2021.

H.R. Owen’s revenue rose 2.9% in the current period ended March 31, 2023 as compared to the previous year corresponding period. However, when converted into ringgit, its revenue dropped by 2.8% due to unfavourable foreign exchange effect. In spite of the increase in revenue, H.R. Owen’s pre-tax profit declined by 79.2% to RM15.8 million in the current period from RM76 million in the previous year corresponding period which had benefited from the exceptionally strong demand in used car as a result of new car supply constraints.

The board has declared a third interim dividend of 2 sen per share in respect of the financial year ending June 30, 2023 and payable on July 21, 2023. The entitlement date has been fixed on June 30, 2023.

The third interim dividend distribution for the financial year ending June 30, 2023 will amount to RM27 million. With this, the total dividend distribution for the financial period ended March 31, 2023 is approximately RM87.7 million.

Malaysia’s gross domestic product growth is expected to moderate in year 2023. The Number Forecast Operation (NFO) business industry in Malaysia continues to be vigilant and to navigate carefully through changes in the local government policies. Nevertheless, the management is cautiously optimistic that the NFO business will continue to improve the per draw sales growth supported by stronger consumer spending, rebound of tourism activities and better-than-expected labour market conditions.

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