Photo by Low Yen Yeing/The Edge

KUALA LUMPUR (Feb 28): Berjaya Corp Bhd's net loss more than quadrupled in October-December last year, compared with the same quarter in 2022, as its food retail business was badly hit by the boycott of Starbucks cafes amid the ongoing Israel-Palestine 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, though revenue only dipped 4.4% to RM2.23 billion from RM2.34 billion, its bourse filing showed.

Aside from its boycott-hit food retail segment, its non-food retail business recorded higher pre-tax loss as its HR Owen luxury car retail business in the UK registered 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 Centre contributed to the loss," the group said, referring to its new centre that hosts five showrooms and fully fitted service centres.

"Furthermore, HR Owen’s results were negatively impacted by higher finance costs arising from interest rate hike and higher stocking loans in the current quarter under review," it said.

At the same time, its property segment recorded lower pre-tax profit due to lower sale of overseas residential units, while its services business also recorded a drop in profit due to lower sales achieved by its number forecast operator STM Lottery Sdn Bhd, coupled with higher prize payouts and higher expenses.

Only its hospitality business saw improved earnings due to higher overall room rates and contribution from its new Iceland Parliament Hotel that commenced operations in December 2022.

For the first six months of FY2023, the group recorded a net loss of RM100.55 million, over two times the RM41.22 million it incurred in the same six months in FY2022, though revenue rose to RM4.8 billion from RM4.58 billion.

No dividend was recommended for the quarter under review.

Going forward, the group expects the performance of its businesses to improve on the back of moderate consumer spending, rebound in tourism activities and better-than-expected labour conditions.

"Barring any unforeseen circumstances, the directors are cautiously optimistic that the performance of the business operations of the group for the remaining quarters of the financial year ending June 30, 2024 to be satisfactory," it added.

Berjaya Corp's shares slipped half a sen or 1.69% to close at 29 sen on Wednesday, valuing the group at RM1.7 billion.