Berjaya Land 1Q profit falls 63.26%

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KUALA LUMPUR (Sept 22): Berjaya Land Bhd’s net profit for its first quarter ended Jul 31, 2015 (1QFY15) was RM37.66 million, which represented a 63.26% drop from the previous corresponding quarter’s RM102.52 million. Revenue however jumped 37.27% year-on-year to RM1.41 billion from RM1.03 billion.

The lottery operator and property investor said in its Bursa Malaysia filing that the substantial drop was mainly due to higher prize payouts, lower profit contribution from its hotels and resorts due to lower revenue, higher share of losses from Berjaya Land’s joint ventures, and higher finance costs.

Berjaya Land also noted that in the previous corresponding quarter (1QFY14), it made a gain of RM94.7 million from the disposal of Berjaya Singapore Hotel.

“The [factors that squeezed the bottom line were] partly mitigated by the higher profit contribution reported by the property development and investment business from higher revenue,” said Berjaya Land.

Berjaya Land attributed its double-digit top line growth in the quarter to the consolidation of automobile dealer HR Owen by BToto Group and the higher progress billings reported by its property development and investment business in the current quarter.

Nonetheless, these contributions were offset by lower revenue from the group’s hotels and resorts businesses, mainly due to lower occupancy rates.

“In particular, Berjaya Tioman Beach Resort reported lower revenue with the cessation of scheduled flights to Tioman Island, Johor,” Berjaya Land added.

The group also said its gaming business operated by BToto's principal subsidiary, Sports Toto Malaysia Sdn Bhd, also reported a drop in revenue in 1QFY15 as compared to 1QFY14 due to lesser number of draws.

Going forward, Berjaya Land said it believes its gaming, hotels and resorts businesses should perform satisfactorily, whilst its property development business will focus on overseas development projects.

“Given the current economic outlook, the directors are of the view that the group's performance will continue to remain challenging in the remaining quarters of the financial year ending Apr 30, 2015,” Berjaya Land said.

Berjaya Land’s shares inched up one sen or 1.19% to close at 85 sen today, bringing its market capitalisation to RM4.23 billion.