BERJAYA ASSETS BERHAD (BAASB) Q3 FY2025: A Deep Dive into Performance and Prospects
Greetings, fellow investors and market enthusiasts! Today, we’re dissecting the latest financial pulse of BERJAYA ASSETS BERHAD (BAASB), as revealed in their unaudited Q3 interim financial report for the period ended 31 March 2025. This report offers a mixed bag of results, showcasing both areas of resilience and segments facing notable headwinds. While the company has demonstrated growth in its 9-month revenue, the latest quarter presents a more challenging picture, alongside ongoing legal matters that warrant attention. Let’s peel back the layers to understand what’s truly shaping BAASB’s journey.
Key Financial Highlights: A Mixed Performance
BAASB’s Q3 FY2025 results show a fascinating contrast between the current quarter’s performance and the cumulative nine-month period. While the nine-month revenue saw a healthy increase, the latest quarter experienced a dip in both top-line and pre-tax profit.
Current Quarter (Q3 FY2025 vs. Q3 FY2024)
The third quarter saw a notable contraction in key financial metrics compared to the same period last year:
Revenue: RM61.368 million
Previous Year Corresponding Quarter: RM63.286 million
This represents a 3% decrease in revenue, primarily attributed to lower vehicle assembly charges, reduced average revenue per draw in the gaming segment, and softer sales from themepark tickets and food and beverage in the hotel and recreation business. These were partially offset by higher sales from the Times Square 2 project and increased jetty operations.
Profit Before Tax: RM1.088 million
Previous Year Corresponding Quarter: RM3.182 million
A significant 65.81% decline in pre-tax profit was recorded, mainly due to lower contributions from the gaming business (lower revenue and higher prize payout) and increased operating expenses in the hotel and recreation segment. The positive contribution from property investment helped to mitigate some of this impact.
Loss Net of Tax: (RM1.334 million)
Previous Year Corresponding Quarter: (RM0.088 million)
Earnings Per Share: 0.01 sen
Previous Year Corresponding Quarter: 0.04 sen
Nine-Month Period (FY2025 vs. FY2024)
Looking at the cumulative nine-month performance, the revenue story is more positive, though pre-tax profit remains a concern:
Revenue: RM192.534 million
Previous Year Corresponding Period: RM178.213 million
This marks an 8% increase in revenue, driven by higher occupancy rates in the hotel and recreation business, improved revenue from jetty operations, stronger property investment performance (due to improved occupancy and sales from Times Square 2), and higher vehicle assembly charges. This growth managed to offset the impact of fewer draws and lower average revenue per draw in the gaming segment.
Loss Before Tax: (RM11.315 million)
Previous Year Corresponding Period: (RM0.181 million)
Despite the revenue growth, the pre-tax loss significantly widened. This was primarily due to a RM15.5 million loss on disposal of investment properties, higher operating expenses in the hotel and recreation segment, lower gaming contributions (revenue and higher prize payout), and reduced share of profits from associated and joint venture companies.
Loss Net of Tax: (RM19.523 million)
Previous Year Corresponding Period: (RM6.273 million)
Loss Per Share: (0.63 sen)
Previous Year Corresponding Period: (0.13 sen)
Segmental Performance: A Closer Look
BAASB’s diverse business segments present varying levels of contribution and challenges:
| Segment | 9-Month Revenue (RM’000) | 9-Month Result (RM’000) | Key Observations |
|---|---|---|---|
| Property Development & Investment | 111,125 | 52,446 | Strongest performer, driven by higher sales from Times Square 2 and improved occupancy rates. |
| Gaming and Related Activities | 49,755 | 325 | Facing headwinds with lower average revenue per draw and higher prize payouts impacting profitability. |
| Hotel, Recreation and Others | 32,601 | (8,789) | Increased occupancy for the 9-month period, but lower Q3 sales from theme park tickets and F&B, coupled with higher operating expenses, led to a loss. |
| Assembly Business & Jetty Operations | (Included in others) | (Included in others) | Assembly business saw higher charges for 9M but lower for Q3. Jetty operations showed consistent growth due to increased ferry slots and higher diesel demand. |
Financial Health: Balance Sheet and Cash Flow
Assessing BAASB’s financial position provides further insights into its stability and liquidity:
Balance Sheet (As at 31 March 2025 vs. 30 June 2024)
Total Assets: RM3.020 billion
As at 30 June 2024: RM3.097 billion
A slight decrease in total assets, mainly driven by a reduction in investment properties. Net assets per share also saw a minor dip from 74 sen to 73 sen.
Total Liabilities: RM1.188 billion
As at 30 June 2024: RM1.236 billion
Total liabilities decreased, primarily due to a significant reduction in long-term bank borrowings (from RM392.1 million to RM176.8 million). However, short-term bank borrowings increased considerably (from RM164.9 million to RM293.5 million).
Cash Flow (9-Month Period)
Cash flow from operations saw a significant improvement:
Net Cash Generated from Operating Activities: RM62.584 million
Previous Year Corresponding Period: RM19.124 million
This substantial increase indicates stronger operational cash generation. Cash generated from investing activities also rose, largely due to sales of investment properties. However, a higher net cash outflow was observed from financing activities, mainly due to increased repayment of borrowings.
Risks and Future Prospects: Navigating the Headwinds
BAASB operates in a dynamic environment, facing both opportunities and challenges. The company acknowledges the prevailing geopolitical tensions, trade wars, inflationary pressures, and rising energy costs impacting global economic growth. Despite these external factors, the domestic economy is anticipated to recover at a moderate pace.
The Directors are cautiously optimistic about the Group’s operating results for the remaining quarter of the financial year ending 30 June 2025, expecting them to be satisfactory.
Key factors influencing BAASB’s main operating businesses include:
- Gaming: Dependent on disposable income, luck factor, illegal gaming, and the number of draws.
- Property: Influenced by demographics, property location, building material costs, lending guidelines, interest rates, rental rates, and quality of property management.
- Hotel & Recreation: Affected by room rates, seasonal festive periods and school holidays, tourism trends, and energy/raw material costs.
- External Risks: Potential imposition of restrictive measures due to any future pandemic could impact operating businesses.
Furthermore, the company is involved in ongoing material litigations, specifically the BTSSB Tax Litigation and VCSB Litigation. The BTSSB Tax Litigation has seen the Federal Court allowing the Inland Revenue Board’s (IRB) Notice of Motion, with IRB set to file its Notice to Appeal. The VCSB Litigation also has trial dates fixed for June and July 2025. These legal uncertainties could continue to pose risks and demand management attention.
Summary and Investment Considerations
BERJAYA ASSETS BERHAD’s Q3 FY2025 report paints a picture of a company navigating a complex economic landscape. While the cumulative nine-month revenue shows growth, signaling strength in segments like property and jetty operations, the latest quarter’s performance and the widening pre-tax loss for the nine-month period highlight significant challenges, particularly in the gaming and hotel/recreation segments, alongside the impact of asset disposals and higher operating expenses.
Key points to consider from this report:
- Mixed Financial Trajectory: Positive 9-month revenue growth juxtaposed with a substantial increase in pre-tax loss for the same period and a decline in Q3 revenue and profit.
- Segmental Performance Disparity: Property development and investment continue to be a strong contributor, while gaming and hotel/recreation face profitability pressures.
- Improved Operational Cash Flow: A healthy increase in cash generated from operating activities is a positive sign for the company’s core business efficiency.
- Balance Sheet Adjustments: A strategic reduction in long-term debt is positive, though offset by an increase in short-term borrowings.
- Ongoing Legal Uncertainties: The unresolved tax and other litigations introduce an element of risk that investors should monitor closely.
- Cautious Outlook: The management’s cautious optimism for a satisfactory Q4 performance, despite global headwinds, suggests a realistic but hopeful stance.
For Malaysian retail investors, understanding these nuances is crucial. BAASB’s diversified portfolio offers some insulation, but the performance of its key segments and the outcomes of its legal battles will be critical determinants of its future trajectory. It’s a company with established assets and ongoing developments, but one that also faces the test of adapting to market shifts and resolving significant legal challenges.
What are your thoughts on BAASB’s latest performance? Do you think their property and jetty operations can continue to cushion the challenges faced by their other segments? Share your insights in the comments below!
