Worst should be over for Berjaya Sports as operations resume

KUCHING: Berjaya Sports Toto Bhd’s ( Berjaya Sports) performance is expected to recover as its operations have resumed and its tickets sales are starting to show signs of returning to its preMovement Control Order ( MCO) numbers.

In a report, the research team at Kenanga Investment Bank Bhd ( Kenanga Research) said Berjaya Sports’ fourth quarter of the financial year 2020 ( 4QFY20) results came below expectations as it turned into the red amidst lockdowns which disrupted business operations.

“However, we believe the worst should be over as the local number forecast operator ( NFO) core business has already reopened with ticket sales currently at 80 per cent of the pre-MCO level,” it highlighted.

Since reopening business on June 17, it noted that Berjaya Sports’ ticket sales have slowly picked up.

“We learnt that currently ticket sales have recovered to 80 per cdent of pre-MCO period while HRO is opened by appointment but Philippine Gaming Management Corporation ( PGMC) is still closed as the Coronavirus Disease 2019 (Covid-19) outbreak situation in the Philippine is not abating.

“Going forward, the local ticket sales should pick up further but the non-Malaysia units’ situation remained tough,” the research team said.

Despite the expected recovery, Kenanga Research cut its FY21 core net profit (CNP) forecast with

ticket sales by at RM19.1 million per draw and make downward adjustments to HRO and PGMC.

“We also introduced new FY22 forecasts where we expect earnings to grow seven per cent as we assumed ticket sales to improve five per cent to RM20 million per draw,” it added.

Kenanga Research maintained its ‘ outperform’ rating on the stock.