Magnum 3Q profit drops 30% to RM45.4m, declares dividend 5 sen per share

-A +A

KUALA LUMPUR (Nov 27): Magnum Bhd's net profit has dropped 30% to RM45.4 million in the third quarter ended Sept 30, 2014 (3QFY14), from RM64.8 million in the previous corresponding quarter. But the number forecast operator still managed to declare a third interim single tier dividend of five sen per share.
 
It told Bursa Malaysia today that the profit decline was due to losses incurred by its investment holdings segment, which suffered fair value loses of quoted investments.
 
It also garnered lower gaming sales as a result of weaker consumer spending and competition from illegal operators. Consequently, 3QFY14's revenue shrunk 4.6% to RM669.99 million from RM702.39 million a year earlier.
 
For the nine-month period (9MFY14), net profit fell 8.8% to RM195.95 million from RM214.87 million in the same period last year, while revenue slipped 4% to RM2.16 billion from RM2.25 billion.
 
Magnum said the lower 9MFY14 profit was mainly due to lower profit from its gaming division, though that was mitigated by better results from its investment holdings and others division, which recorded a higher pre-tax profit due to fair gain value and lower operating expenses post-demerger of MPHB Capital Bhd.
 
Gaming pre-tax profit also came in lower due to lower sales due to more cautious consumer spending.
 
On prospects, the firm said cautious consumer spending has moderated its sales due to the government's ongoing subsidies rationalisation programme.
 
It said the aggressive discount and higher prize payout structure offered by illegal operators also remain a challenge to the industry.
 
But Magnum is committed to address the decline in revenue via its marketing and product branding strategies for the remainder of the financial year.
 
Its shares ended the day 3 sen or 1% higher at RM2.91, translating to a market capitalisation of RM4.15 billion.