GGRAsia – Quarterly profit down for Malaysia’s Magnum

Quarterly profit down for Malaysia’s Magnum

Dec 08, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck

Malaysian lottery operator Magnum Bhd reported a 4.6-percent drop in revenue for the third quarter of 2014, to MYR670 million (US$193million), down from MYR702 million a year earlier.

Profit attributable to equity holders of the parent fell by 29.9 percent year-on-year to MYR45.4 million, the company said in a statement.

The group, formerly known as Multi-Purpose Holdings Bhd, undertook a demerger of its core businesses into gaming and non-gaming businesses in June this year.

The move resulted in the creation of two separate and independent listed entities – Magnum Bhd, which holds the gaming business, and MPHB Capital Bhd, which holds the financial services, hospitality and property investment businesses.

Magnum recorded a lower pre-tax profit for the three months ended September 30 of MYR74.7 million when compared to MYR77.1 million achieved in the previous year corresponding quarter.

“The decline, due to losses incurred by Investment Holdings segment, was mainly attributed to fair value losses of quoted investments,” the firm said.

Pre-tax profit from gaming dropped by MYR0.2 million from a year earlier to MYR76.8 million in the third quarter of 2014, “due to lower gaming sales as a result of the weaker consumer spending and competition from illegal operators but mitigated by lower prizes payout ratio,” it added.

Profit in the first nine months of 2014 dropped by 8.8 percent year-on-year to MYR196 million. Revenue for the period was MYR2.2 billion, down 4 percent from a year ago.

“The government’s ongoing subsidies rationalisation programme has led to cautious consumer spending which has a moderating effect on our sales,” warned the firm’s board of directors, adding, “The aggressive discount and higher prize payout structure offered by illegal operators remains a challenge to the industry.”

It added: “With the launch of the new 4D Jackpot Gold game on November 8, 2014, the company is committed to continue its marketing and product branding strategies for the remainder of the current financial year to address the decline in its revenue.”