It said the lower revenue for the quarter under review was due mainly to the lower contribution from the property investment and development business segment, as remaining units of a property project in China had been disposed of in the third quarter.
KUALA LUMPUR: Diversified group Berjaya Corporation Bhd
returned to the black in the financial year ended April 30, 2017 with earnings of RM139.95mil due to the property investment and development segment but cautioned of headwinds ahead.
It said on Thursday that due to the prevailing economic conditions and global financial outlook, it anticipated the group's operating environment would be very challenging.
The earnings in FY17 were in stark contrast with the net losses of RM177.22mil a year ago when there was an impairment in value of goodwill in FY16.
Revenue was higher by 1.3% at RM9.138bil compared with RM9.016bil. Pre-tax profit was more than double at RM626.17mil compared with RM293.74mil a year ago.
Berjaya Corp explained the higher revenue for FY17 was mainly due to higher contribution from the hotels and resorts segment. This was mainly due to revenue contribution from a new hotel which started in October 2016.
Also boosting the topline was the property investment and development segment due to encouraging sales of apartments and higher progress billings from a property project in China and sale of several units of residences in Japan.
It said the restaurants and cafes business reported higher revenue mainly due to additional cafes operating in FY17.
The group's motor distribution business under HR Owen recorded higher revenue from better sales volume of new cars, certain new models and contribution from additional outlets during the financial year.
However, other business segments reported reduced revenue. For instance, the marketing of consumer products and services segment reported a lower revenue caused by weak consumer spending sentiment in China, Malaysia and Hong Kong.
“The intense competition in mainland China also contributed to the decrease in revenue in the current financial year,” it said.
As for the gaming operations, revenue fell mainly due to the additional Goods and Services Tax (GST) adjustment of RM15.6mil that Sports Toto Malaysia had made against its revenue. This followed a notification from the Customs Department due to different interpretation on the value of gaming supply (GST Adjustment).
Berjaya Corp's pre-tax profit was given a boost by the property investment and development segment due to higher sales mainly from property projects in China and Japan. However, the increase was dampened by lower pre-tax profits reported by the restaurants and cafes business segment and the gaming operations business segment.
The restaurants and cafes business reported lower profit mainly due to the slowdown in the economy, which in turn adversely impacted the expansion plans of the Kenny Rogers Roasters operations in Malaysia and Indonesia.
“The gaming business also contributed lower pre-tax profit mainly due to the aforesaid GST adjustment, higher prize payout as well as higher operating expenses,” it said.
Berjaya Corp said for the fourth quarter, it posted earnings of RM3.24mil in contrast with net losses of RM368.91mil a year ago. Its recorded a pre-tax profit of RM62.22mil compared with pre-tax loss of RM466.10mil.
Its revenue was lower at RM2.234bil compared with RM2.483bil a year ago. Earnings per share were 0.1 sen compared with loss per share of 7.13 sen.
It said the turnaround in profitability was mainly because there were non-cash losses such as impairment in value of goodwill of RM473.20mil and assets held for sale relating to Berjaya (China) Great Mall Co Ltd of RM131.81mil a year ago.
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