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Thursday, 15 June 2017

(The Edge Financial Daily) Berjaya Food incurred maiden quarterly loss in 4QFY17

BY CHESTER TAY

KUALA LUMPUR: Berjaya Food Bhd (BFood) fell into the red for the first time in its fourth financial quarter ended April 30, 2017 (4QFY17), with a net loss of RM3.37 million or 90 sen a share, as it undertook impairments in the face of a slowing economy.

It netted a profi t of RM3.17 million or RM1.05 sen a share in the same quarter a year ago. BFood, commonly known for being the operator of brands like Starbucks Coffee and Kenny Rogers Roasters (KRR), blamed the loss on the economic slowdown, which compelled the management to undertake measures to curtail further losses in the future, such as the closure of non-performing restaurants and outlets.

In a filing with Bursa Malaysia, BFood said these measures led to impairments of fixed assets and intangible assets. It recorded an impairment in property, plant and equipment of RM4.43 million for the quarter.

In spite of the poorer performance, the group recommended a fourth interim dividend of one sen per share, payable on July 28 this year.

Quarterly revenue, meanwhile, grew 9% to RM151.42 million in 4QFY17, from RM139.05 million last year.

For the full financial year ended April 30, 2017 (FY17), BFood’s net profit almost halved to RM11.35 million, from RM21.29 million in FY16, despite a 9% revenue growth to RM605.44 million from RM554.36 million. Earnings per share dropped to 3.02 sen in FY17, from 5.66 sen previously.

With the weak consumer sentiment and other economic factors moving forward, BFood expects it will be operating in a challenging environment in FY18.

“Nevertheless, the group expects Starbucks to maintain its revenue growth momentum, and the price adjustment in the previous quarter is expected to mitigate the negative impact from
the fluctuating ringgit and poor results of KRR operations in Malaysia,” it said.

BFood’s share price closed unchanged at RM1.53 yesterday, giving it a market capitalisation of RM572.72 million. Year to date, the stock has slipped 2.6%.