Berjaya Food posts RM8.01m net profit in Q2, declares 1 sen dividend

PETALING JAYA: Berjaya Food Bhd (BFood) posted a net profit of RM8.01 million in the second quarter ended Dec 31, 2019, against RM184.12 million in revenue.

Its profit before tax of of RM13.14 million for the current quarter under review was adversely impacted by the adoption of MFRS 16: Leases, which 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.

BFood told Bursa Malaysia that the depreciation charge of right-of-use assets and the lease liability interest expense are higher than the total lease rental expenses.

“This resulted in a lower profit before tax upon the adoption of MFRS 16. The profit before tax would have been RM15.01 million, if the total lease rentals of all the leased outlets were accounted for under the previous accounting standard for leases.”

Nonetheless, the board has recommended a second interim dividend of 1 sen dividend per share for the quarter under review, payable on March 26.

For the six-month period, BFood posted a net profit of RM12.62 million with RM364.56 million in revenue.

Its financial year end has been changed from April 30 to June 30 to be coterminous with the new financial year end of the company’s ultimate holding company.

BFood said the overall results for the remaining quarters of the financial year ending June 30, 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 Coffee Company Sdn Bhd maintaining its revenue growth momentum, and the group expanding both its income streams from new franchise business and its existing business. Based on the foregoing, it is anticipated that the operating results of the group will remain satisfactory in the remaining quarters,” it added.