Berjaya Corp's net loss quadrupled due to the Starbucks boycott
February 29, 2024
Berjaya Corp's net loss quadrupled due to the Starbucks boycott
Only Berjaya's hospitality business saw earnings improve due to higher overall room rates and the contribution of the new Iceland Parliament Hotel which begins operations in December 2022.
Only Berjaya's hospitality business saw earnings improve due to higher overall room rates and the contribution of the new Iceland Parliament Hotel which begins operations in December 2022.
KUALA LUMPUR: Berjaya Corp Bhd's net loss more than quadrupled in September-December last year, compared to the same quarter in 2022, following its food retail business being severely affected by the boycott of Starbucks cafes amid the ongoing Israeli-Palestinian conflict.
The group's net loss for the second quarter ended Dec 31, 2023 (2QFY2023) jumped to RM116.32 million from the RM24.81 million it incurred in 2QFY2022, even as revenue only declined 4.4% to RM2.23 billion from RM2.34 billion, the bourse filing showed.
Apart from the boycott-hit food retail segment, its non-food retail business posted higher pre-tax losses as HR Owen's luxury car retail business in the UK posted higher losses due to lower revenue and higher operating expenses due to inflationary pressures.
"Additionally, higher depreciation charges following the completion and full operation of the Hatfield Center contributed to the loss," the group said, referring to its new center which houses five showrooms and a fully fitted service centre.
"Furthermore, Owen's HR results were negatively impacted by higher finance costs arising from higher interest rate increases and higher stock loans in the current quarter under review," he said.
At the same time, its real estate segment recorded lower pre-tax profit due to lower sales of overseas residential units.
Its services business also posted a drop in profits due to lower sales achieved by its number prediction operator STM Lottery Sdn Bhd, coupled with higher prize payouts and higher expenses.
Only its hospitality business saw earnings improve due to higher overall room rates and contributions from its new Iceland Parliament Hotel which begins operations in December 2022.
For the first six months of FY2023, the group recorded a net loss of RM100.55 million, more than double the RM41.22 million it incurred in the same six months in FY2022, even as revenue rose to RM4.8 billion from RM4.58 billion.
No dividend is recommended for the quarter in review.
Going forward, the group expects its business performance to improve following moderate consumer spending, recovery in tourism activity and better-than-expected labor conditions.
"Barring any unforeseen circumstances, the directors are cautiously confident that the performance of the group's business operations for the remaining financial quarter ending 30 June 2024 will be satisfactory," he added. -
