Berjaya Corporation Bhd registered a lower revenue of RM1.99 billion as compared to the revenue of RM2.19 billion reported in the corresponding quarter of the previous year mainly due to lower revenue contribution from the consumer products and services segment and the property segment.
The consumer products and services segment are operating in an intensely competitive trading environment, pervaded with numerous online marketing portals as well as
other direct selling competitors. Revenue from the property segment has decreased following a slowdown in the sales of the Group's high-end projects.
The retail distribution business, which is a part of the consumer products and services segment, was affected by the intense competition, the absence of any major product launches as well as the reduced number of outlets.
The reduced number of outlets resulted from the Group's ongoing efforts to rationalise the cost structure of the retail distribution business by scaling down the number of outlets via the progressive closing of the non-performing outlets.
The motor distribution business reported a lower revenue from H.R.Owen Plc ("HR Owen") due to the unfavourable effect of the foreign exchange translation although it recorded higher sales from the new car sector. The disposal of DSG Holdings Limited ("DSG") in the previous quarter also contributed to the lower revenue for this quarter.
The property segment registered lower revenue in the current quarter as there were lower progress billings as well as lower sales from the high-end projects of the Group. The hotels and resorts segment reported a lower revenue mainly due to lower overall occupancy rates.
The gaming operations registered lower revenue for the current quarter as the previous financial year's quarter registered strong sales from the Grand Toto 6/63 game, which accumulated a high jackpot then.
The Group registered a pre-tax profit of RM34.13 million in the current quarter as compared to the pre-tax loss of RM153.46 million reported in the previous year's corresponding quarter.
The pretax loss in the previous year was mainly due to the provision for impairment of a portion of the balance sales proceeds from the sale of the GMOC Project in China which amounted to RM155.08 million and the loss on partial disposal of an associated company.
The operating profit for the current quarter was higher mainly due to higher contribution from the consumer products and services segment and gain from foreign exchange translations.
The consumer products and services segment reported a pre-tax profit for the current quarter, mainly due to the lower operating expenses recorded by the retail distribution business following its implementation of a rationalisation exercise in the previous year to close non-performing stores and reduce operating expenses.
The motor distribution business also reported a higher pre-tax profit in the current quarter mainly from the HR Owen operations.
The property segment reported a lower pre-tax profit mainly due to lower revenue and higher finance costs as compared to the previous year's corresponding quarter. The higher prize payout in the current quarter under review lowered the pre-tax profits of the gaming operations.
For the 6-month period, the Group registered a revenue of RM4.13 billion as compared to the revenue of RM4.38 billion in the corresponding period of the previous year, mainly due to lower contribution from the consumer products and services segment and the property segment.
The Group reported a pre-tax profit of RM193.45 million for the financial period under review as compared to the pre-tax loss of RM91.21 million reported in the previous year's corresponding period.
The pre-tax loss in the previous financial period was mainly due to the provision for
impairment of a portion of the balance sales proceeds from the sale of the GMOC Project in China and the loss on partial disposal of an associated company. The higher operating profit for the current financial period together with the gain on disposal of DSG, led to the Group recording a pre-tax profit of RM193.45 million.
The improved operating profit was due to higher profit contributions from the consumer products and services segment.
Given the prevailing economic conditions and global financial outlook, the Directors are of the view that the Group's operating environment will be challenging for the remaining quarters of the financial year.