Lower FY17 earnings for Berjaya Sports Toto

The toto betting operations operated by Sports Toto Malaysia Sdn Bhd, the principal subsidiary of Berjaya Sports Toto Bhd, reported lower revenue, as revenue is currently presented net of GST on gaming supply compared to the previous year

KUALA LUMPUR: Berjaya Sports Toto Bhd (BToto) reported a 21.8% decline in its earnings for the financial year ended April 30, 2017 after its unit Sports Toto Malaysia Sdn Bhd incured higher prize payout and higher operating expenses.

The number forecast operator (NFO) said on Tuesday its earnings fell 3% to RM241.31mil from RM308.64mil. Its pre-tax profit dropped by 14.7% to RM380.20mil from RM445.66mil. Its revenue however increased to RM5.73bil from RM5.56bil.

BToto said the higher revenue was due to itds UK-based H.R. Owen Plc. However, the drop in pre-tax profit was mainly due to the results of Sports Toto and was partly mitigated by improved results reported by H.R. Owen and the improved results from International Lottery & Totalizator Systems Inc. arising from higher project contract sales.

Sports Toto's revenue dipped 1.7% in FY17 as it made an additional Goods and Service Tax (GST) adjustment of RM15.6mil against its revenue due to different interpretation on the Value of Gaming Supply. This was subject to a review by the Customs Department. 

“Excluding the GST adjustment, the drop in revenue would have been 1.2%,” it explained. 

BToto said hence, pre-tax profit was lower by 19.9% mainly due to the GST adjustment, higher prize payout and higher operating expenses incurred.

Philippine Gaming Management Corporation (PGMC) saw its revenue rise 1.3% due to higher lease rental income earned resulted from higher sales reported by Philippine Charity Sweepstakes Office (PCSO). However, its pre-tax profit fell 7.3% mainly due to higher operating expenses.

H.R. Owen posted higher revenue and pre-tax profit mainly due to higher revenue boosted by higher sales volume of new cars, certain new models available for sale as well as contribution from additional outlets.

“The improved performance of H.R. Owen was partly offset by the unfavourable foreign exchange effect in the conversion into Ringgit in the current year. Its revenue rose to RM2.35bil from RM2.17bil and pre-tax profit increased to RM15.9mil from RM10mil,” it said.

For the fourth quarter ended April 30, 2017, its earnings fell 30.7% to RM72.48mil from RM104.71mil due to results of Sports Toto and PGMC .

Its revenue dipped nearly 0.5% to RM1.47bil from RM1.48bil. Earnings per share were 5.38 sen compared with 7.77 sen. It announced a dividend of three sen a share compared with five sen a year ago.

BToto said the lower revenue was due to the results of Sports Toto but mitigated by higher revenue reported by PGMC and H.R. Owen.

Sports Toto reported a drop in revenue and pre-tax profit of 4.1% and 43.0% as the current quarter had lower number of draws quarter. The decline in pre-tax profit was mainly due to exceptionally lower prize payout a year ago.

PGMC reported a 19.4% rise in revenue mainly due to higher lease rental income earned as a result of higher sales reported by PCSO However, it recorded a drop in pre-tax profit of 8.5% mainly due to higher operating expenses.

As for H.R. Owen, it reported an increase in revenue and pre-tax profit mainly due to improved revenue contributed by higher new car sales volume coupled with revenue contribution from additional outlet in the current quarter under review. 

However, the improved performance of H.R. Owen was partly offset by the unfavourable foreign exchange effect in the conversion into Ringgit. Revenue rose to RM640.6mil from RM623.6mil whilst pre-tax profit increased to RM5.5mil from RM3.9mil.