Quarterly profit up for Malaysia’s Magnum
Malaysian lottery operator Magnum Bhd reported a sharp profit increase in the second quarter of 2014, to MYR68 million (US$21.5 million), compared with MYR0.6 million in the same period one year earlier.
Magnum’s results in the second quarter of 2013 were negatively impacted by the demerger exercise it completed in June that year.
The group, formerly known as Multi-Purpose Holdings Bhd, undertook a demerger of its core businesses into gaming and non-gaming businesses. 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’s pre-tax profit from continuing operations in the second quarter increased by 9.5 percent in year-on-year terms to MYR94.6 million.
“The increase in pre-tax profit is mainly due to fair value gain of quoted investments, lower operating expenses and lower finance cost, net of a slightly lower pre-tax profit registered by the gaming division as a result of lower revenue,” the firm said in a filing on Thursday to the Bursa Malaysia.
Magnum’s gaming pre-tax profit decreased by MYR0.4 million to MYR86.2 million due to “marginally lower gaming sales as a result of the weaker consumer spending and competition from illegal operators”.
Profit in the first half of 2014 remained flat at MYR150.5 million.
“Prospects for the remainder of the current financial year will continue to be challenging,” warned the firm’s board of directors. It said rising living costs in Malaysia “are expected to have a dampening effect on consumer spending and sales, and this is further compounded by aggressive discount and higher prize payout structure by illegal operators”.
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