Oriental posts loss in 4Q on higher finance costs, tax expenses

KUALA LUMPUR (Feb 28): Oriental Holdings Bhd sank into the red with a net loss of RM6.16 million for the fourth quarter ended Dec 31, 2022 (4QFY2022), against a net profit of RM95.32 million a year earlier, due to higher finance costs and tax expenses.

It was also due to lower earnings from operating activities and lower share of profit of equity accounted associates, as well as foreign currency losses and fair value losses on equity instruments, the group said in a Bursa Malaysia filing.

This is the group's first quarterly loss since 1QFY2020, when it posted a net loss of RM81.77 million.

Oriental posted a revenue of RM986.45 million in 4QFY2022, up 9.05% from RM904.58 million a year earlier.

The group’s finance costs during the quarter rose 74.4% to RM31.16 million from RM17.87 million a year earlier, while tax expenses increased 16.1% to RM36.67 million from RM31.57 million.

Operating activities saw a loss of RM31.94 million versus a profit of RM163.65 million in 4QFY2021, while share of profit of equity accounted associates shrank 54.2% to RM11.55 million from RM25.22 million.

There was a foreign currency loss of RM40.94 million compared with a foreign currency gain of RM9.43 million in 4QFY2021.

The fair value of equity instrument loss stood at RM64.78 million versus fair value gain of RM25.33 million.

For the full financial year, Oriental's net profit rose 56.05% to RM500.84 million, from RM320.95 million in FY2021, lifted by gain on disposal from the hotels and resorts segment.

Full-year revenue grew 17.14% to RM3.83 million from RM3.27 million, due to higher contribution from all segments.

Going forward, Oriental said the shortage of vital components such as semiconductor chips continue to be a concern for certain car models line-up as the war in Ukraine continues to put a strain on supplies of important parts needed.

The group said its plantation segment will take necessary steps to ensure that all estates and mills remain efficient, cost effective and competitive. It added that the forex exposure of the Japanese yen and Singapore dollar denominated borrowings will be closely monitored and managed.

The group said the hotels and resorts segment has been making a comeback after countries lifted their international travel restrictions

As for the healthcare segment, it will continue to focus on strengthening brand awareness and positioning the hospital for sustainable growth.

“In the pipeline is the construction of a new hospital in Segamat, which is part of group’s expansionary plans in the north Johor region, slated to open in 2026,” said Oriental.

The group's share price settled four sen or 0.59% higher at RM6.85 on Tuesday (Feb 28), giving the group a market capitalisation of RM4.25 billion.