Berjaya Food Bhd (BFood) posted a revenue of RM180.44 million and pre-tax profit of RM8.57 million in the current quarter ended 30 September 2019.
The pre-tax for the current quarter under review was adversely impacted by the adoption of MFRS 16: Leases. MFRS 16 requires depreciation be charged on the right-of-use assets and interest expenses be incurred on lease liability instead of lease rental expenses, which was required by the previous accounting standard for leases, MFRS 117, to be charged out in profit and loss.
In the current quarter under review and on the aggregate, the depreciation of right-of-use assets and the lease liability interest expense are higher than the lease rental expenses. Thus, this resulted in a lower pre-tax profit upon the adoption of MFRS 16.
The pre-tax profit would have been RM10.78 million, if the lease rentals of all the leased outlets were accounted for under the previous accounting standard for leases.
BFood expects the overall results for the remaining quarters of the financial year ending 30 June 2020 will be adversely impacted by the adoption of MFRS 16 as almost all the group's operating outlets are on lease.
Nevertheless, the group expects to mitigate this adverse impact with Berjaya Starbucks maintaining its revenue growth momentum, and the group expanding both its income streams from new franchise business and its existing business.
With these, it is anticipated that the operating results of the group will remain satisfactory in the remaining quarters, it said.
WATCH THE VIDEO
The pre-tax for the current quarter under review was adversely impacted by the adoption of MFRS 16: Leases. MFRS 16 requires depreciation be charged on the right-of-use assets and interest expenses be incurred on lease liability instead of lease rental expenses, which was required by the previous accounting standard for leases, MFRS 117, to be charged out in profit and loss.
In the current quarter under review and on the aggregate, the depreciation of right-of-use assets and the lease liability interest expense are higher than the lease rental expenses. Thus, this resulted in a lower pre-tax profit upon the adoption of MFRS 16.
The pre-tax profit would have been RM10.78 million, if the lease rentals of all the leased outlets were accounted for under the previous accounting standard for leases.
BFood expects the overall results for the remaining quarters of the financial year ending 30 June 2020 will be adversely impacted by the adoption of MFRS 16 as almost all the group's operating outlets are on lease.
Nevertheless, the group expects to mitigate this adverse impact with Berjaya Starbucks maintaining its revenue growth momentum, and the group expanding both its income streams from new franchise business and its existing business.
With these, it is anticipated that the operating results of the group will remain satisfactory in the remaining quarters, it said.
WATCH THE VIDEO
No comments:
Post a Comment