BCorp moving forward, cautiously

By Sharen Kaur
Published in NST Property, June 16, 2020

Berjaya Corp Bhd (BCorp) said almost all business operations of the group in Malaysia, including hotels and malls have resume partially or fully but going forward their performance will be affected mainly due to the expected liquidity squeeze arising from the contraction of the economy.

The group's property development business segment is expected to be impacted by slower property sales, it said.

Berjaya Corp Bhd founder Tan Sri Vincent Tan. File Photo

BCorp, which is founded by Tan Sri Vincent Tan said the lockdown measure will also affect the construction progress of the group's ongoing projects.

As for shopping malls, BCorp expects that the footfall will continue to remain low due to the general public still being wary of the Covid-19 infection despite the implementation of preventive standard operating procedures.

"The low footfall may create downward pressure on rental collections and revenue," it said in a filing with Bursa Malaysia today.

The group's shopping mall and complexes had granted rental relief (of which a 14-day relief period fell in the third quarter and the balance 14-day relief falls in the fourth quarter) to eligible tenants during this challenging time.

As for the hotels and resorts business segment, BCorp also expects that the occupancy rates and the revenue from events will remain low arising from low tourist arrivals coupled with new social distancing rules during the recovery movement control order period.

BCorp expects that the recent incentives announced under the Short-term Economic Recovery Plan, particularly for the hotels and resorts, motor industry, and property development business segments, may partly mitigate the adverse impact of the Covid-19 pandemic.

The group registered revenue of RM6.13 billion and pre-tax profit of RM522.04 million for the cumulative nine-month period ended March 31, 2020, largely contributed by the group's gaming and motor distribution businesses.

The property development segment reported higher revenue in the third quarter ending March 31, mainly due to the completion of Kensington Gardens in Penang and sales of units from previously completed local projects.

The hotels and resorts business segment had registered lower occupancy rates mainly due to the lower demand from the leisure and corporate markets and lower revenue from events arising from the low influx of tourists as the tourism industry was severely affected by the Covid-19 pandemic since January 2020.

Prior to the imposition of the global lockdown, the segment was already affected by lower sales, cancellation of events, and room sales primarily due to the growing concerns and uncertainties created by the Covid-19 pandemic.

The segment had also written off about RM7.06 million in respect of certain property, plant, and equipment which were destroyed in a fire at Berjaya Tioman Beach Resort, Pahang.

The adverse results in the segment, however, were overshadowed by the exceptional gain from the disposal of a property in Japan.

BCorp recently concluded the sale of the trust beneficial interest on the hotel component of the Four Seasons Hotel and Hotel Residences Kyoto, and recorded a significant gain of about RM662.11 million.