Update Magnum’s 2Q net profit rose to RM68m, declares 5 sen dividend

by **Cals** Fri 22 Aug 2014, 01:29

Update Magnum’s 2Q net profit rose to RM68m, declares 5 sen dividend

Business & Markets 2014

Written by Wei Lynn Tang of theedgemalaysia.com

Thursday, 21 August 2014 21:24

KUALA LUMPUR: Magnum Bhd’s net profit for the second quarter ended June 30, 2014 (2Q14) jumped to RM68 million from RM649,000 in the previous corresponding quarter as it no longer reported a loss from discontinued operations resulting from the disposal of shares in MPHB Capital Bhd.

In the previous corresponding quarter, the group had recorded a loss from discontinued operations of RM70.74 million which had arose from the disposal of shares in MPHB Capital, pursuant to the demerger and listing of MPHB Capital, which was completed on June 28 2013, net of 3 months' profit from Q2 operations of the disposed companies.

The group has declared a second interim single tier dividend of 5% or 5 sen per share for 2Q14, bringing total year-to-date dividend payout to 10 sen per share.

Revenue for the quarter dropped marginally by 0.6% year-on-year to RM696.6 million, though pre-tax profit came in higher at RM94.6 million compared with RM86.3 million in 2Q13.

“The increase in pre-tax profit [for 2Q14] is mainly due to fair value gain of quoted investments, lower operating expenses and lower finance cost, net of a slightly lower pre-tax profit registered by the gaming division as a result of lower revenue,” Magnum said in a filing to Bursa Malaysia.

For the six months ended June 30, 2014 (1H14), net profit came in flat at RM150.5 million, with only a 0.3% increase from the previous corresponding half of RM150.1 million.

Revenue for 1H14 fell 3.8% to RM1.49 billion, with lower pre-tax profit of RM213.4 million compared with RM244.3 million in 1H13, which Magnum attributed to lower profits from the gaming division.

Moving forward, Magnum expects the recent increase in the overnight policy rate by 25 basis points and the rising living costs to have a dampening effect on consumer spending and sales, noting that “this is further compounded by aggressive discount and higher prize payout structure by illegal operators”.

While it views the remainder of the current financial year to continue to be challenging, Magnum said it will continue its marketing and product branding strategies to sustain its revenue.

Magnum closed unchanged at RM3.05, giving it a market capitalisation of RM4.35 billion.