KUALA LUMPUR: Utusan Melayu (M) Bhd posted net losses of RM3.89mil in the second quarter ended June 30, 2019 compared with a net profit of RM18.85mil a year ago due to reduction in publishing, distribution and advertising by RM37.96mil.
It announced on Monday its operating loss was RM3.86mil compared with operating profit of RM18.84mil a year ago and it said the second half would be very challenging as it faced cashflow constraint.
Its revenue fell by 59.4% to RM25.91mil from RM63.87mil. Loss per share was 3.51 sen compared with earnings per share with 17.02 sen.
For the first half, it posted net losses of RM12.08mil compared with net profit of RM13mil in the previous corresponding period. Its revenue declined by 55.9% to RM52.65mil from RM119.38mil a year ago.
Utusan said in the first half, its revenue fell by 55.9% to RM52.65mil from RM119.38mil a year ago due to the distribution of Tutor Guru and e-paper.
“The group posted lower other in come by RM19.01mil but higher operating costs by RM60.91mil. Accordingly, the group registered a loss before tax of RM12.06mil as compared with profit before tax of RM12.77mil last year, ” it said.
When compared with Q1, its revenue fell by RM84, 000 from RM26.75mil to RM25.91mil in Q1. The total cost decreased by RM4.68mil due to higher employee benefits.
“Accordingy the group recorded lower loss before tax of RM3.87mil as compared with loss before tax of RM8.19mil in Q1, ” it said.
On the current year prospects, it said the second half continues to be very challenging for the group both in terms of profitability and liquidity as the group posted losses in Q2,
“Based on the current performance of our publishing, distribution and advertising segment, the board is unsure that the group will turn around by the end of financial year 2019.
“Due to the above declining results, the group is experiencing a cashflow constraint and has seriously addressed the issue by intensifying is efforts for the disposal of the properties.
“However, the disposal progress is much affected by the slow market sentiment, restriction and requirement by the relevant authorities and thus has not been able to resolve the cashflow issues immediately.
“It is also impossible for the group to convince potential investors to revive the business. A few potential identified parties had declined to participate due to the group's huge liabilities.
“Therefore, in view of the above and further to the its compliance under the Main Market Listing Requirements, the board is of the view that it is now unable to meet the requirement of the regularisation plans after being classified as PN17 on Aug 20, 2018.”