Shares in NFOs take a beating
PETALING JAYA: Shares in numbers forecast operators (NFOs) fell after the government announced plans to reduce the number of special draws next year.
Berjaya Sports Toto Bhd (BToto) fell nine sen or 3.78% to RM2.29, while Magnum Bhd closed lower by nine sen or 4.11% to RM2.10. Finance Minister Lim Guan Eng said the new policy would be made during the tabling of Budget 2019 on Nov 2.
The previous government had approved 22 Tuesday special draws this year for operators such as Magnum, Sports Toto and Da Ma Cai.
Lim said the move to reduce the number of special draws was to cut down on the number of gambling days, so that gambling activities would not lead to social ills such as gambling addiction.
The special draw was initiated in 1999 to help raise funds during the Nipah virus outbreak.
Lim said RM80.4mil in sin taxes was collected from the draws in 1999.
Revenue collected from the draws had increased to RM238mil in 2017, or averaging RM200mil a year after 1999.
NFO stocks are typically seen as defensive in nature, given their predictable business nature and generous dividend payouts.
BToto in its last reported fourth quarter ended April 30 saw its net profit being halved to RM35.18mil.
The quarter also saw BToto’s revenue dropping 5.2% to RM1.40bil from RM1.48bil in the previous corresponding quarter, mainly due to lower contributions from units HR Owen plc and Philippine Gaming Corp Management.
The decline in its net profit was due to an impairment in value for certain available-for-sale investments and goodwill relating to the leasing of the lottery equipment business in the Philippines.
In its first quarter ended March 31, Magnum posted a rise in net profit to RM54.94mil from RM30.57mil in the same quarter a year ago.
Revenue also rose slightly to RM712.35mil from RM697.08mil previously.
Magnum attributed the improvement to higher revenue from the gaming division, together with a favourable payout ratio that had grown its net profit.
“The increase is mainly due to higher sales from the 4D Jackpot game arising from the higher 4D jackpot prize,” it had said when the quarterly results were announced.