Berjaya Corporation Bhd Reports Q4 2024 Losses Despite Strong Segment Performance

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Berjaya Corporation Bhd (BCorp) posted a revenue of RM2.46 billion for the fourth quarter ending June 30, 2024 (Q4’24), compared to RM2.56 billion in the same quarter last year. The company also recorded a pre-tax loss of RM91.64 million, a significant increase from the RM8.70 million pre-tax loss reported in Q4’23.

Performance by Business Segments

BCorp’s results for the quarter were driven by several key business segments, which performed as follows:

• Services reported higher revenue, primarily due to strong performance in the telecommunications network services, Cloud, and Internet of Things (IoT) sectors. The company’s gaming business, operated by STM Lottery Sdn Bhd, also showed growth, driven by higher sales per draw and an additional draw (41 draws versus 40 draws in Q4’23). The stockbroking and fund management businesses further boosted segment revenue, benefitting from higher brokerage income and fund management fees. As a result, the services segment reported a higher pre-tax profit, supported by the lower prize payouts in STM Lottery.
• Hospitality recorded an increase in revenue thanks to higher occupancy rates and a boost in tourist arrivals following visa exemptions for certain countries. However, despite this revenue growth, pre-tax profit declined due to rising operating costs.
• Retail reported a decline in both revenue and pre-tax profit. The food retail business faced challenges due to market sentiment impacted by the Middle East conflict. Meanwhile, the non-food retail business, especially HR Owen Plc, saw lower revenue from reduced car sales as certain models neared the end of their product life cycles. However, the impact was cushioned by favorable foreign exchange rates, which minimized losses when converted to ringgit.
• Property registered lower revenue and profits due to the near-completion of a local project and the fact that nearly all residence units from an overseas project had already been sold in the previous quarter.

Full-Year Financial Performance

For the full financial year ending June 30, 2024, BCorp posted a revenue of RM10.04 billion, up from RM9.61 billion in the previous year. This growth was attributed to multiple segments:

• The non-food retail segment, led by HR Owen, saw higher revenue in ringgit, despite challenging economic conditions in the UK and reduced sales volumes in pound sterling.
• The property segment benefited from the higher sales of overseas residence units.
• Hospitality experienced a strong year due to higher average room rates and contributions from the Iceland Parliament Hotel, which began operations in December 2022.
• The services segment, specifically MTNS, Cloud, and IoT businesses, drove significant revenue growth, alongside STM Lottery, which reported higher sales per draw, despite conducting fewer draws compared to the previous year.
• The stockbroking and asset management sectors also posted increased revenue from higher brokerage and performance fees.

BCorp’s pre-tax profit for FY2024 reached RM673.82 million, significantly up from RM260.84 million the prior year. This was largely driven by a RM498.33 million gain from the disposal of subsidiary companies and a RM154.05 million gain from the remeasurement of retained equity in a former subsidiary. However, the company’s operational profit was impacted by the weaker performance of the retail segment, which faced higher operating costs and inflationary pressures, especially in the UK.

Outlook for FY2025

Looking ahead, BCorp is cautiously optimistic about its prospects for FY2025. Malaysia’s economic growth is expected to be driven by strong domestic demand, improved tourism activity, and a moderation in inflation. However, geopolitical uncertainties and local political developments, such as the closure of legal Number Forecast Operator outlets in Kedah and Perlis, remain concerns that could affect the group’s performance.

The board remains hopeful that, barring any unforeseen circumstances, the group’s financial performance for the year ending June 30, 2025, will be satisfactory, supported by strong consumer spending and continued growth across its business segments.