PETALING JAYA: Berjaya Land Bhd (BLand) posted a huge year-on-year dip in net profit to RM1.88mil for its first quarter ended July 31 from RM44.5mil in the corresponding quarter last year.
This was attributable to lesser profit contribution from its hotel and recreation business due to lower occupancy rates, and reduced sales from the meeting, incentive, convention and exhibition sector (MICE).
“The lower profit was also due to the impairment of available-for-sale quoted equity investments as well as unfavourable changes in fair values of quoted equity investments,” BLand told Bursa Malaysia.
It should be noted that the results of the preceding year's corresponding quarter included an exceptional gain on the disposal of an associated company amounting to RM53.2mil.
In terms of pre-tax profit, the quarter under review recorded RM94.8mil against RM112.4mil a year ago.
BLand achieved RM1bil revenue in the quarter compared with RM978.9mil in the period a year ago. The higher revenue was mainly contributed by its gaming business via Berjaya Sports Toto Bhd's principal subsidiary, Sports Toto Malaysia Sdn Bhd, and the improved sales registered by its property development division.
CIMB Research said BLand's property EBIT (earnings before interest and taxes) plunged 82% year-on-year to RM1.6mil due to poorer margins while the hotel EBIT fell 6.4% year-on-year to RM9.9mil.
The brokerage said the potential downside catalysts for BLand's share price performance were the poor first-quarter results, execution risks for its overseas projects and continuous losses for its club division.
CIMB Research maintained its “sell” call on BLand shares with a target price reduced to 93 sen from RM1.11. The counter closed 2 sen higher to 95 sen yesterday.
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