Magnum returns to the black despite lower revenue

  • Corporate News
  • Wednesday, 20 Nov 2019

Magnum Bhd said on Tuesday its better performance was due to lower pre-tax loss recorded by the investment holdings division mainly due to tax penalty of RM44.20mil a year ago.

PETALING JAYA: Despite lower revenue, Magnum Bhd has returned to the black with a net profit of RM48mil in the third quarter ended Sept 30, driven by lower net loss of investment holding and other divisions.

In a filing with Bursa Malaysia, the company said its information technology subsidiary had incurred a tax penalty of RM44.2mil and a pre-tax profit of RM5.5mil, resulting in net losses in the corresponding period last year.

This was off-set by a higher fair value loss on investments of RM1.88mil in the quarter.

Revenue, meanwhile, fell 2.2% to RM652.10mil in the quarter from RM667.10mil a year ago dragged down by the gaming sector.

“Gaming sales for the current quarter at RM652.1mil is lower than the previous year’s corresponding quarter by 2.3% or RM15mil. The decrease is mainly due to five fewer draws in the current quarter and the effect of the 6% service tax in the current quarter as compared to the ‘zero’ goods and services tax effect from June 1,2018 to Aug 31,2018, ” Magnum said.

The company has declared a third interim dividend of four sen per share for the quarter.

Given that the number of special draws had reduced this year, Magnum is cautiously optimistic that the growth trend in the per draw revenue in the nine-month period would offset the downward pressure from the drop in the number of special draws.

“With the sustained momentum of enforcement by the authorities on illegal operators and our ongoing rebranding and re-imaging exercise, the board expects the financial performance for the financial year 2019 to be similar to that of 2018.”

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