BLand Q3 revenue boosted by property biz

PETALING JAYA: Berjaya Land Bhd’s (BLand) revenue for the third quarter ended Jan 31, 2016 rose marginally to RM1.48 billion from RM1.47 billion a year ago due to higher progress billings reported by the property development and investment business.
In a filing with Bursa Malaysia yesterday, it said that the higher progress billings offset the lower revenue contribution from both the gaming business operated by Berjaya Sports Toto Bhd’s (BToto) principal subsidiary, Sports Toto Malaysia Sdn Bhd (STMSB) and the hotels and resorts business.
“STMSB’s revenue was lower due to the effect of the Goods and Services Tax (GST) as toto betting revenue is currently presented net of GST on gaming supply. If the effect of GST is excluded, STMSB’s revenue would have been comparable to the previous year corresponding quarter,” it said.
The hotels and resorts business registered lower revenue due to lower average room rates.
H.R. Owen Plc (HRO) reported lower revenue in its functional currency mainly due to the drop in new car sales volume resulting from soft market and lower supply of new car models. However, upon translation to ringgit, HRO’s revenue rose slightly.
Pre-tax profit for the quarter fell 60.27% to RM32.32 million from RM81.35 million a year ago due to higher prize payout and the impact of GST reported by STMSB.
“The other businesses also reported lower profit contribution mainly due to lower revenue, higher operating expenses and foreign exchange loss,” it said.
For the nine months ended Jan 31, 2016, revenue rose 6.83% to RM4.58 billion from RM4.29 billion a year ago while pre-tax profit rose 32.25% to RM444.53 million from RM336.14 million a year ago.
The group attributed the higher revenue to higher progress billings reported by the property development and investment business and by HRO from higher revenue from additional outlets.
It said that the favourable foreign exchange effect during the nine-month period has enhanced the sales performance of HRO, which helped to offset the lower revenue reported by STMSB and the hotels and resorts business.
Meanwhile, the higher pre-tax profit was due to the gain arising from deemed partial disposal of Berjaya Kyoto Development (S) Pte Ltd (BKD) and the gain on re-measurement of the group’s remaining stake in BKD amounting to RM193.86 million.
The group expects STMSB to maintain its market share in the numbers forecast operator industry despite the challenging outlook for the gaming business, on the back of dampened domestic consumer spending caused by prevailing economic conditions and impact of GST.
“The performance of the hotels and resorts business is expected to remain satisfactory whilst the property market outlook is expected to remain lukewarm. As such, the directors are of the view that the operating performance of the group will continue to remain challenging,” it said.
In a separate filing, BLand said its 72.6% subsidiary, Berjaya Jeju Resort Limited (BJR) terminated the land sale and purchase agreement in respect of the remaining land under Phase 1 of the Jeju Project in Korea.
Pursuant to the financing arrangement for Phase 1 of the Jeju Project and following the suspension of the development works thereon, Jeju Free International City Development Center (JDC) had repurchased part of the lands (under Phases 2 to 9) for Korean Won 107 billion (about RM374.5 million).
The cash proceeds were used to fully settle the loan outstanding with the financiers and to partially settle the Phase 1 construction cost due and owing to the main contractor. On completion of the land repurchased by JDC, BJR terminated the land sale and purchase agreement.
On Nov 6, 2015, BJR had instituted legal proceedings against JDC for breach of contract and for losses and damages incurred as a result of the lawsuit. The first court hearing was held on March 7, 2016 and the next court hearing has been fixed on April 4, 2016.