Overseas property projects lift BCorp’s 2Q earnings

KUALA LUMPUR (Dec 30): Berjaya Corp Bhd (BCorp) reported a 44% year-on-year rise in net profit in the second quarter of financial year 2017 (2QFY17), largely due to improved contribution from its property investment and development business segment.

Its net profit came in at RM176.5 million or 3.27 sen per share for the quarter ended Oct 31, 2016 (2QFY17), compared with RM122.25 million or 2.47 sen previously, its bourse filing yesterday showed.

The better performance of its property investment and development business segment was largely due to the sale of residences at its recently opened Four Seasons Hotel Kyoto in Japan, besides higher profit recognition from a project in China, which is nearing completion.

The group’s quarterly revenue was 9% higher at RM2.46 billion versus RM2.26 billion achieved in the same quarter last year, due to higher revenue from its property investment and development business, as well as its motor distribution business, which saw higher sales of new cars.

Notably, its restaurant and cafe business also recorded higher profit due to higher contribution from Starbucks operations in Malaysia, and reduced losses from the closure of certain non-performing franchised food outlets.

While its hotel and resort business saw a better quarter with higher profit as revenue climbed, its gaming business reported weaker profit due to higher prize payout and operating expenses.

For the cumulative nine months, BCorp’s net profit came in 36% lower at RM113.82 million, versus RM178.39 million a year ago, though revenue climbed 7% to RM4.68 billion from RM4.39 billion.

According to its income statement, the period saw lower share of associated companies’ results after the disposal of Berjaya Auto Bhd and higher share of losses from associated companies, besides higher income tax expenses, compared to a year ago.

On prospects, the company said given the prevailing economic conditions and global financial outlook, it expects the group’s operating environment to be very challenging going forward.

Berjaya shares closed down 0.5 sen or 7.14% lower at 33.5 sen, which valued it at RM1.63 billion.

This article first appeared in The Edge Financial Daily, on Dec 30, 2016. Subscribe to The Edge Financial Daily here.