Magnum 4Q revenue down and expects weak sales for 2015

Malaysian lottery operator Magnum reported a decrease in revenue for the fourth quarter last year and expects this year’s sales to be affected by weaker consumer spending.
For the last three months of 2014, the company reported revenue falling to MYR727.4 million ($195.8 million) from MYR741.2 million during the same period the year before, while profit rose from MYR52.7 million to MYR62 million.
“The Group recorded a marginally higher pre-tax profit for the current quarter of RM85.7 million when compared to RM83.8 million achieved in previous year corresponding quarter. The increase was mainly due to lower prizes payout in the gaming segment net of losses incurred by the Investment Holdings segment.”
The company said the implementation of a new tax in April is expected to dampen consumer spending and sales.
“With the implementation of the Goods and Services Tax (“GST”) on April 1, 2015 and the higher costs of living from the government’s ongoing subsidies rationalisation programme, consumer spending is expected to continue to be weak. This is likely to have a moderating effect on our sales.”
“In addition, the GST expense based on net gaming supplies that will be absorbed by the Company will have an impact on our profitability for the coming financial year. To mitigate the above, the Company will endeavour to innovate its marketing, product and distribution strategies for all its games.”