KUALA LUMPUR: Magnum Bhd
posted earnings of RM30.57mil in the first quarter (Q1) ended March 31, down 55.6% from a year ago, due to lower gaming sales and higher prize payout ratio.
This marked the first quarter in four years that the directors did not propose any dividend.
In a filing with Bursa Malaysia, the company said lower gaming sales pulled down its revenue to RM697.08mil from RM752.56mil in the previous year’s corresponding quarter.
Gaming sales for the quarter under review, at RM697.1mil, was lower by 7.4% or RM55.5mil than what it recorded a year ago.
Magnum attributed the decline to intense competition from illegal operators, weak consumer spending and one less draw in Q1.
In line with the lower sales and compounded by higher prizes payout ratio, the gaming pre-tax profit fell from RM99.7mil previously to RM44.9mil in Q1 2017.
Magnum said its “investment holding and others” division recorded a favourable variance in the quarter just ended mainly due to fair value gain on investments in the quarter compared to fair value loss on investments a year earlier.
On its prospects, the company said the directors expected that gaming revenue would moderate as the illegal gaming activities continued to flourish and affect its market share. This problem is compounded by rising costs, leading to lower disposable income.
“Notwithstanding the above, the group will continue with its various marketing strategies and product innovation to mitigate the sales decline,” it said.
The directors did not propose a quarterly dividend for the current financial period (Q1 2016: 4 sen).