KUCHING: Borneo Oil Bhd group is back in the black after posting a profit of RM33.13 million in financial year to June 30, 2024 (FY2024) from loss of RM13.22 million in FY2023, contributed mainly by the fair value gain of a quoted securities in the US.
A fair value gain of RM228.35 million on Verde Resources, Inc listed on the US OTC Markets closed at US$0.45 at the end of 4Q2024 was recorded, according to Borneo Oil, which owns home-grown fast food restaurant chain SugarBun.
In FY2024, Borneo Oil posted lower group revenue of RM78.56 million as compared to RM84.99 million in FY2023. Earnings per share stood at 0.28 sen against losses per share of 0.14 sen.
In 4Q2024, Borneo Oil made a turnaround with a group net profit of RM128.32 million from loss of RM12.99 in 4Q2023 as revenue rose to RM22.17 million from RM14.07 million. This boosted earnings per share to 1.07 sen (-0.13 sen).
In the current quarter under review, the food & franchise operations (FFO) segment generated higher revenue of RM19.55 million (4Q2023: RM15.45 million) as a result of higher consumer spending and a return to normal consumption patterns.
“Despite this revenue growth, the segment reported a loss
before tax of RM3.94 million compared to a profit of RM0.85 million in the same quarter last year. This loss was largely due to a RM4.72 million depreciation expense on plantation assets, which were reclassified from investment property to property, plant and equipment,” said the company.
The property investment & management (PIM) segment recorded sharply lower revenue of RM1.07 million (RM3.01 million) due to reduced on-site activities after the completion of project management work. The segment pre-tax loss rose to a whopping RM45.88 million (-RM1.76 million) due to a RM41.37 million impairment on trade receivables.
The resources & sustainable energy (RSE) segment improved its performance with its revenue increased to RM1.54 million (RM0.29 million), boosted mainly by the supply of raw materials for the integrated limestone processing plant. However, impairment of RM8.63 million for trade and other receivables and RM11.07 million for properties, plant and equipment dragged the segment pre-tax loss to RM25.19 million from pre-tax profit of RM293,000 in 2Q2023.
Borneo Oil’s associate company reported lower pre-tax loss of RM20.83 million (-RM51.81 million) and this reduction was mainly due to an impairment up to the full carrying amount of the company’s investment in the associate company.
The group’s 4Q2024 financial results were much improved compared to the immediate preceding quarter (3Q2024) when Borneo Oil suffered a pre-tax loss of RM29.61 million (4Q2024: +RM128.34 million) and lower revenue of RM17.36 million (RM22.17 million).
“The increase in revenue was primarily driven by the season holidays during the quarter, which led to higher reported FFO sales of RM19.55 million, representing an increase of RM3.55 million from the preceding quarter.
“Notably, the profit before tax of RM128.34 million at the end of the current quarter was largely attributed to a fair value gain of RM228.35 million on quoted securities,” explained the company.
