BFood posts RM111.57m revenue in Q4

PETALING JAYA: Berjaya Food Bhd (BFood) registered a revenue of RM111.57 million and pre-tax loss of RM28.54 million in the fourth quarter ended June 30, 2020, adversely affected by the outbreak of the Covid-19 pandemic.

There were no quarterly comparative figures for the quarter following the change of the financial year end last year.

The movement control order (MCO), which came into effect on March 18, 2020, followed by the conditional MCO from May 12, 2020 until June 9, 2020 substantially covered the current reporting period. The group experienced a significant reduction in sales and recorded negative same-store-sales growth during this period, as the group was restricted from operating at its full capacity.

Even though the group’s sales recovered at a fast pace when Malaysia entered the recovery MCO phase which started on June 10, 2020, the group still recorded much lower sales in the current quarter under review. The significant drop in sales caused a significant reduction in gross profit contribution, which was insufficient to offset the fixed costs (such as depreciation and rental expenses) in some outlets. Consequently, the group incurred a pre-tax loss in the current quarter under review.

In addition, the group recognised an impairment loss on goodwill and property, plant and equipment of about RM2.35 million and RM1.15 million, respectively as the recoverable amounts are lower than their carrying amounts.

For the 12-month period, the group registered a revenue and pre-tax loss of RM634.72 million and RM7.60 million respectively.

For the 14-month period ended June 30, 2019, the group reported a revenue of RM788.98 and pre-tax profit of RM46.56 million respectively. The group’s revenue and results for the current financial year were adversely impacted by the outbreak of the Covid-19 pandemic and the imposition of the MCO.

In addition, the group’s results in the current financial year was also adversely impacted by the adoption of MFRS 16: Leases. Typically, under the MFRS 16 standard, the sum of the depreciation of ROU assets

and the lease interest expense is higher than the lease rental expense specified under the previous standard MFRS 117 at the initial stage of the lease period. After the half way mark of the lease period, the sum of the ROU depreciation and lease interest expense will be lower than the lease rental expense under MFRS 117. The group would have reported a pre-tax profit of RM1.77 million, if the total lease rental of all the leased outlets were accounted for under the previous accounting standard for leases.

On future prospects, BFood said the Covid-19 pandemic has resulted in unprecedented preventive lockdown measures of varying degrees, and these have adversely impacted the group’s operating results.

“The group is cautiously optimistic that its operating results in the ensuing financial year ending June 30, 2021 will be satisfactory with the gradual relaxation of the lockdown measures and recovery of the economy. Nevertheless, the group has taken various austerity measures and initiated marketing initiatives via various delivery channels to mitigate the impact on its sales,“ BFood said.

source https://www.thesundaily.my/business/bfood-posts-rm11157m-revenue-in-q4-EM3592237