KUALA LUMPUR (Nov 27): Magnum Bhd posted its first quarterly loss since Multi-Purpose Holdings Bhd (MPHB) undertook a corporate exercise in 2013 to demerge its financial services and other investments from its core gaming business. MPHB was then renamed Magnum Bhd to focus on gaming.

The number forecast operator posted a net loss of RM70.51 million in the third quarter ended Sept 30, 2018 (3QFY18) compared to a net profit of RM63.28 million a year ago, dragged down by a tax penalty incurred in the current quarter under review.

Nevertheless, this was mitigated by the goods and services tax holiday between June and August.

In a filing with Bursa Malaysia today, Magnum said the investment holding and others division recorded a loss of RM39.3 million in the current quarter under review compared to a profit of RM2.1 million in 3QFY17 as a result of a tax penalty incurred of RM44.2 million. This arose from a tax dispute with the Director General of Inland Revenue (DGIR).

As a result, the group recorded a loss per share of 4.96 sen for 3QFY18 compared to earnings per share of 4.45 sen for 3QFY17.

Quarterly revenue, however, rose 1.6% to RM667.11 million from RM656.45 million a year ago.

Magnum also declared a third interim dividend of 4 sen per share for the financial year ending Dec 31, 2018 (FY18), payable on Dec 28.

The tax penalty also dragged the group's net profit for the cumulative nine months (9MFY18) down by 78.9% to RM32.48 million from RM153.81 million. Revenue, however, was slightly higher at RM1.98 billion in 9MFY18 from RM1.97 billion in 9MFY17, mainly due to higher gaming revenue.

On prospects, Magnum said the amicable settlement of the legal dispute with DGIR afforded certainty to the financial impact of this matter on the group.

With the launch of a new game called Magnum Life in April and the ongoing implementation of the rebranding and reimaging exercise, Magnum said it is optimistic that the performance of FY18 at operational level, excluding the settlement with DGIR, will at least match that of FY17.

In FY17, the group posted an 8.9% increase in net profit to RM206.62 million from RM189.66 million in FY16, while revenue fell by a marginal 0.4% to RM2.65 billion from RM2.66 billion in the previous year.

Magnum shares closed up 2 sen or 1% at RM2.02 today, with 1.21 million shares done, bringing a market capitalisation of RM2.87 billion.