PETALING JAYA: Berjaya Sports Toto Bhd (BToto) posted a net profit of RM30.47 million its fourth quarter ended June 30, 2021, compared with a net loss of RM43.27 million a year ago mainly contributed by better results reported by Sports Toto Malaysia Sdn Bhd and HR Owen Plc.
BToto’s revenue doubled to RM1.12 billion from RM475.06 million reported in the corresponding quarter of the previous year.
The group’s principal subsidiary Sports Toto reported a pre-tax profit as opposed to the pre-tax loss in the previous year’s corresponding quarter in line with the higher revenue arising from the higher number of draws in the current quarter. There were 28 draws conducted in the current quarter as compared to only six draws conducted in the previous year’s corresponding quarter.
The implementation of the various movement control orders (MCO) by the Malaysian government had imposed a nationwide lockdown where non-essential services, including Sports Toto’s operations, were ordered to close temporarily. Consequently, Sports Toto’s operations were negatively impacted with a loss of 15 draws in the current quarter under review with the implementation of MCO 3.0 that commenced
on June 1, 2021, whilst 34 draws were cancelled in the previous year’s corresponding quarter when MCO 1.0 was enforced.
HR Owen reported a pre-tax profit of RM25.2 million in the current quarter as compared to a pre-tax loss of RM13.2 million in the previous year’s corresponding quarter. The pre-tax loss in the previous year was mainly due to its operations being temporarily shut down for more than two months, from March 23, 2020 to May 31, 2020, in compliance with the UK’s lockdown to control and curtail the outbreak of the Covid-19 pandemic. HR Owen generated revenue of RM661.4 million, an increase of 72.4% from the RM383.6 million reported in the previous year’s corresponding quarter.
For the cumulative 12 months period, BToto posted a net profit of RM182.06 million against a net loss of RM132.70 million a year ago primarily contributed by improved results from Sports Toto and HR Owen.
BToto’s revenue stood at RM4.83 billion, a 4.17% increased in revenue compared to RM4.64 billion reported in the same period of the previous year mainly attributed to higher sales generated by HR Owen.
Sports Toto’s pre-tax profit increased by 5.0% mainly due to marginally lower prize payout and lower operating expenses incurred in the current year under review. It registered a drop in revenue of 8.2% mainly due to the prolonged impact of the Covid-19 pandemic and the implementation of MCO 2.0 from Jan 13, 2021 to Feb 18, 2021 and subsequently MCO 3.0 from June 1, 2021 and still on-going, which resulted in partial and full business closures respectively in all states in Malaysia. During MCO 2.0, only outlets in the state of Sarawak were allowed to operate. Notwithstanding that there was a total of 157 draws conducted in the current year under review as compared to only 126 draws conducted in the previous year, the prolonged lockdown and irregular business disruptions had dampened consumer sentiments and excitement from the draws as well as caused a change in the punters’ spending behaviour.
HR Owen’s pre-tax profit increased to RM76.8 million from RM2.7 million (excluding the RM8.6 million exceptional gain from the disposal of investment property as reported in the previous year). The improved result was in line with the increase in revenue as well as lower operating expenses incurred because of certain austerity
measures undertaken by HR Owen coupled with support fee income received from franchises as well as certain governmental grants and business reliefs obtained arising from the lockdown order imposed by the UK government. It registered an increase of 21.1% in revenue to RM2.50 billion from RM2.07 billion in the previous year, mainly attributed to higher sales generated from the new and used car sectors, and primarily due to the sale of new model cars during the current year coupled with the backlog order fulfilment from the earlier Covid-19 pandemic lockdown in the UK.
On future prospects, BToto said it faces challenges and is affected by the re-imposition of different stages of MCO / lockdown by the respective governments where the group’s subsidiary companies operate. Sports Toto’s operations had been disrupted with the different phases of MCO implemented by the Malaysian government to combat the Covid-19 pandemic.
The business environment in countries where the group’s subsidiary companies operate is expected to recover at a slower pace and customer sentiment remains weak with many countries facing a surge in infection due to the new and more contagious Covid-19 variants. Thus, it is extremely challenging to ascertain the full extent and
duration of the impact to the group’s operations and financial performance.
With the recent efforts by the government in speeding up the vaccination rate and the launch of the National Recovery Plan to help Malaysia emerge from the economic downturn, Btoto is cautiously optimistic that the group’s number forecast operation (NFO) businesses will gradually recover, with the resilient nature of the NFO business as noted in the past economic crises and turbulent periods, when the sales outlets are allowed to resume operation under the Malaysia National Recovery Plan. The group is also confident that it will continue to maintain its market share in the NFO business for the financial year ending June 30, 2022 when businesses are allowed to operate under the new normal of living with the Covid-19 virus.