Higher finance costs, losses from associated companies drag Berjaya Land into the red in 2Q

• The net loss in the quarter was mainly due to its subsidiary HR Owen plc reporting a loss, which is attributed to lower revenue coupled with higher operating expenses incurred due to inflationary pressure and the higher depreciation following the completion and full operation of Hatfield Center.

KUALA LUMPUR (Feb 27): Coming off an impressive first financial quarter results, Berjaya Land Bhd (BLand) has gone into the red with a net loss of RM76.48 million for the second financial quarter ended Dec 31, 2024 (2QFY2024), against a net profit of RM84.39 million a year earlier, as the group was negatively impacted by higher finance costs and the share of losses from its associated companies and joint ventures.

BLand — which is involved in number forecast operations (NFOs), auto retailing and provision of after sales services, property development and investment, and the operations of hotels and resorts — said the net loss in the quarter was mainly due to its subsidiary HR Owen plc reporting a loss, which is attributed to lower revenue coupled with higher operating expenses incurred due to inflationary pressure and the higher depreciation following the completion and full operation of Hatfield Center.

Besides that, BLand also received lower profit contribution from STM Lottery Sdn Bhd due to lower revenue achieved, higher prize payout and higher operating expenses incurred, and lower profit contribution from its property development and investment business segment.

Quarterly revenue, however, was only marginally down by 0.28% at RM1.687 billion, compared with RM1.692 billion in 2QFY2023, BLand's exchange filing on Monday showed.

This was mainly due to the lower revenue reported by STM Lottery primarily due to fewer number of draws conducted (42 draws versus 48 draws in the previous year's corresponding quarter), the group said.

However, looking ahead, BLand is cautiously optimistic that its NFO business segment in Malaysia will continue its upward trajectory of per-draw sales growth driven by favourable consumer spending during the festive period and continued consumer interest in the jackpot games.

On top of that, the performance of the domestic business segments of the group is also expected to improve on the back of strong consumer spending and improvement in tourism activities.

"Barring any unforeseen circumstances, the directors are cautiously optimistic that the performance of the business operations of the group for the remaining quarters of the financial year ending June 30, 2024 to be satisfactory," BLand said in a separate statement.

For the first half of FY2024, BLand recorded a net loss of RM39.62 million, against a net profit of RM92.84 million in the previous July-December period, despite revenue rising 8.7% to RM3.70 billion from RM3.40 billion.

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