Berjaya Food undertakes austerity measures


  • Corporate News
  • Tuesday, 02 Jun 2020

“The drop in sales caused a significant reduction in gross profit contributions, which was insufficient to offset the fixed costs (such as depreciation and rental expenses) in some outlets, ” Berjaya Food said in a statement yesterday.

PETALING JAYA: Berjaya Food Bhd (Bfood) is undertaking various austerity measures and initiating marketing initiatives via various delivery channels to mitigate the impact of the coronavirus (Covid-19) on its sales.

This is to cushion the impact of the movement control order (MCO) in Malaysia and the circuit breaker in Singapore which has caused its operations on both countries to be below capacity.

It said that even with the gradual relaxation of the conditional MCO, the new standard operating procedures such as social distancing measures that need to be implemented, will also restrict operations to be at full capacity.

As such, this will have a significant impact on the results of the group for the remaining quarter of the financial year ending June 30,2020. On May 2 last year, BFood changed its financial year end from April to June.

BFood reported a net loss of RM1.39mil for the third quarter ended March 31, on the back of a revenue of RM158.6mil.

It said the quarterly results were affected by the pandemic and although the movement control order (MCO) was imposed in Malaysian from March 18, consumers had already taken precautions by staying away from places with crowds such as shopping malls, restaurants, and other public spaces.

“Since January, the pandemic has severely affected the tourism industry, resulting in the influx of tourists to Malaysia and Singapore to reduce drastically.

“As a result, the group experienced a reduction in sales and recorded negative same-store-sales growth for the current quarter.

“The drop in sales caused a significant reduction in gross profit contributions, which was insufficient to offset the fixed costs (such as depreciation and rental expenses) in some outlets, ” Berjaya Food said in a statement yesterday.

The group’s results were also adversely impacted by the adoption of MFRS 16. BFood would have recorded a pre-tax profit of RM1.34mil if the total lease rentals of all the leased outlets were accounted for under the previous accounting standard for leases

For the 9-month period ended March 31, BFood posted a net profit of RM11.24mil and a revenue of RM523.15mil.

Its pre-tax profit was RM20.95mil. If its total lease rentals were accounted for under previous standards, the figure would have been RM27.13mil.

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