BLand’s Financial Rollercoaster: From Robust Start to Setback with RM76.48M Loss

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“Berjaya Land (BLand) faces setbacks with a RM76.48M loss in Q2 2024 after an impressive start. Explore the challenges, causes, and their cautious optimism for future growth.”

KUALA LUMPUR, 27th Feb 2024 – After a strong first financial quarter, Berjaya Land Bhd (BLand) experienced a setback, reporting a net loss of RM76.48 million for the second financial quarter ending Dec 31, 2024 (2QFY2024). This contrasts with a net profit of RM84.39 million in the same period a year ago. The group faced challenges from increased finance costs and incurred losses from its associated companies and joint ventures.

BLand, engaged in activities such as number forecast operations (NFOs), auto retailing, after-sales services, property development and investment, and hotel and resort operations, cited its net loss in the quarter to be primarily linked to the subsidiary HR Owen plc. The subsidiary reported a loss, attributed to reduced revenue and increased operating expenses due to inflationary pressures. Additionally, higher depreciation was incurred following the completion and full operation of Hatfield Center.

In addition, BLand experienced reduced profit contribution from STM Lottery Sdn Bhd, resulting from lower revenue, increased prize payouts, higher operating expenses, and a decreased profit contribution from its property development and investment business segment.

Despite a slight decrease in quarterly revenue by 0.28%, amounting to RM1.687 billion compared to RM1.692 billion in 2QFY2023, as indicated in BLand’s filing on Monday, the main contributing factor was the reduced revenue reported by STM Lottery. This decrease was primarily attributed to a lower number of draws conducted (42 draws as opposed to 48 draws in the corresponding quarter of the previous year), according to the group.

Despite the recent financial challenges, Berjaya Land Bhd (BLand) expresses cautious optimism about the future, anticipating a positive trajectory for its Number Forecast Operations (NFO) business segment in Malaysia. The company expects this growth to be propelled by increased per-draw sales, driven by favorable consumer spending during festive periods and sustained interest in jackpot games among consumers.

Additionally, the group anticipates enhancements in the performance of its domestic business segments, attributing this positive outlook to robust consumer spending and a recovery in tourism activities. In a separate statement, BLand expressed cautious optimism, stating that, barring unforeseen circumstances, the directors expect the business operations’ performance to be satisfactory for the remaining quarters of the financial year ending June 30, 2024.

In the initial half of FY2024, BLand registered a net loss of RM39.62 million, a shift from the net profit of RM92.84 million in the corresponding July-December period, despite witnessing an 8.7% increase in revenue to RM3.70 billion from RM3.40 billion.

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