The Local Media's Coverage Of BLand Earnings

On the Edge yesterday: Berjaya Land sinks into red with 4Q net loss

• KUALA LUMPUR: BERJAYA LAND BHD [] went into the red in the fourth quarter ended April 30, 2011 with net losses of RM4.68 million compared with net profit of RM72.07 million a year ago due various factors including impairments and loss on disposal of certain quoted investments.
  
  It said on Monday, June 27 that revenue fell 5.83% to RM1.062 billion from RM1.128 billion mainly due to the lower property sales from the property development business.
  
  Pre-tax profit was RM105.1 million compared with RM161.2 million a year ago. Loss per share was 0.09 sen compared with earnings per share of 1.44 sen.
  
  “The drop in pre-tax profit for the quarter under review was mainly due to the impairment in value of certain property, plant and equipment and quoted investments coupled with loss on partial disposal of equity interest in a subsidiary company and certain quoted investments, as well as share of losses from jointly controlled entities,” it explained.
  
  The board recommended a final dividend of 1.0 sen per ordinary share of 50 sen each less 25% income tax.
  
  For the financial year ended April 30, 2011, its earnings fell 28.1% to RM80.44 million from RM111.96 million. Pre-tax profit dipped to RM458.57 million from RM465.79 million. Revenue was marginally higher at RM4.06 billion versus RM4.05 billion.
  
  The lower pre-tax profit was mainly due to lower profit contribution from BERJAYA SPORTS TOTO BHD [] as its principal subsidiary, Sports Toto (Malaysia) Sdn Bhd, was adversely affected by the increase in Pool Betting Duty from 6% to 8% effective June 1, 2010 and higher prize payout.
  
  This impact was mitigated by the reduction in the 4D Big Special Prize effective Dec 15, 2010. In addition, certain resorts of the group which are upgrading certain category of rooms incurred higher charge out of room refurbishment expenditure this year.

The SunBiz today, carried this version: BLand posts pre-tax profit of RM458m in FY11

• BLand posts pre-tax profit of RM458m in FY11
  
  Posted on 28 June 2011 - 05:41am
  
  PETALING JAYA (June 27, 2011): Berjaya Land Bhd (BLand) posted a slightly lower pre-tax profit of RM458.57 million for the financial year ended April 30, 2011 (FY11) from RM465.79 million a year ago on lower profit contribution from the gaming business due to the impact from the increase in pool betting duty from 6% to 8% in June last year and higher prize payout.
  
  However, the impact was mitigated by the reduction in the 4D Big Special Prize last December.
  
  In addition, certain resorts of the group, which are upgrading certain category of rooms, incurred higher charge out of room refurbishment expenditure in FY11.
  
  The impact on the earnings was partly mitigated by the gain on disposal of an associated company and favourable fair value changes of certain of the group's quoted investments, BLand said on Monday.
  
  Revenue in FY11 was marginally higher at RM4.06 billion against RM4.05 billion a year ago.
  
  On a quarterly basis, BLand's pre-tax profit for the three months ended April 30, 2011 (Q4) was lower at RM105.14 million against RM161.24 million mainly due to the impairment in value of certain property, plant and equipment and quoted investments coupled with loss on partial disposal of equity interest in a subsidiary company and certain quoted investments, as well as share of losses from jointly-controlled entities.
  
  Revenue in Q4 was RM1.06 billion compared with RM1.13 billion a year ago.
  
  "Barring unforeseen circumstances, the directors are of the view that the group's performance for the financial year ending April 30, 2012 will remain satisfactory," BLand said in a statement.
  
  BLand has recommended a final dividend of one sen a share less tax.

The Star Biz and Business Times did not report on BLand's earnings.

Hmmm... interesting?

Are we playing spot the difference or what?

Both articles appears to be correct with its facts but .... aren't they .... different?

How?

How is our local stock exchange going to attract more 'investors' when the local media publish rather 'different' set of news?

I mean, which set of news, should the 'reader' trust?

I understand that investors should know what they are buying and investors should do some form of research before investing but what chances do they stand if the local media spins out news like this?

And then Bland earnings itself.

They, the media, focus on 'pre-tax' profit but isn't 'pre-tax' meaningless to the investor?

Think about it.

At the end, doesn't the company, Bland, still have to pay tax? Or tax is free?

If not, why is the SunBiz making such meaningless comparison?

• On a quarterly basis, BLand's pre-tax profit for the three months ended April 30, 2011 (Q4) was lower at RM105.14 million against RM161.24 million....

And the Edge article...

• BERJAYA LAND BHD [] went into the red in the fourth quarter ended April 30, 2011 with net losses of RM4.68 million compared with net profit of RM72.07 million a year ago due various factors including impairments and loss on disposal of certain quoted investments..

So losses were caused by impairments and loss on disposal of certain quoted investments...

Now surely the inquiry mind would want to know what the impairments were and what the certain quoted investments were?

And here's the Edge or is it Bland explanation..

• “The drop in pre-tax profit for the quarter under review was mainly due to the impairment in value of certain property, plant and equipment and quoted investments coupled with loss on partial disposal of equity interest in a subsidiary company and certain quoted investments, as well as share of losses from jointly controlled entities,” it explained

 Err..  how? Doesn't explain much, doesn't it?

Misleading

theSun have this article http://203.115.192.117/tuesday/tue_page15.html

• KUALA LUMPUR: Berjaya Land Bhd’s (BLand) pre-tax profi t for the third quarter ended Jan 31, 2010 rose to RM79.7 million from RM78.9 million seen in the previous corresponding quarter.
  
  Revenue, however declined to RM993.9 million from RM1.158 billion, it said in a statement yesterday. It said the higher profi t contribution came from its property development division, higher share of profits from associated companies and lower finance costs, which offset the impairment loss on quoted investments and investments in associated companies as well as loss on partial disposal of investment in a subsidiary company.
  
  It attributed the lower revenue to lower revenue reported by the Number Forecast Operator (NFO) business operated by Berjaya Sports Toto Bhd (BToto) and the hotels and resorts division. For the nine-month period under review, the group reported a drop in revenue of about 8% whilst pre-tax profi t showed an increase of about 48% as compared to the previous year corresponding period.
  
  It attributed the lower revenue reported by the Number Forecast Operator (NFO) business operated by Berjaya Sports Toto Bhd (BToto) and the hotels and resorts division. For the nine-month period under review, the group reported a drop in revenue of about 8% whilst pre-tax profit showed an increase of about 48% as compared to the previous year corresponding period.
  
  BLand said with the property market and the hotels and resorts businesses all set to rebound given the improving economic conditions, and expected improvement in BToto’s gaming business following the launch of the Supreme Toto 6/58, which offers a guaranteed minimum upfront jackpot of RM8,888,888 – the highest in town – the group’s operating performance for the remaining quarter of the fi nancial year ending 30 April 2010
  will remain satisfactory.

Financial news talking only about pre-tax profits???????

What the heck?

Err... no need to pay taxes ah?

Anyway, here's a different version of Bland's earnings. BLand posts bigger net loss in 3Q. (Yeah, Bland reported a higher net loss!)

• KUALA LUMPUR: Berjaya Land Bhd’s (BLand) net loss widened to RM8.57 million in its third quarter ended Jan 31, 2010 (3QFY10) from a loss of RM356,000 a year earlier on the back of lower contributions from its numbers forecasting operations (NFO) and hotels and resorts division.
  
  Group profit after tax rose 6.9% to RM43.42 million from RM40.62 million, but higher minority interest portion at RM512 million versus RM40.97 million previously resulted in the widening of the net loss.
  
  Revenue fell 14.2% to RM993.96 million from RM1.16 billion while loss per share was 0.69 sen versus loss 0.03 sen previously. No dividend was declared.
  
  It said lower revenue from its gaming business operated by Berjaya Sports Toto Bhd (BToto) was due to the traditionally high Chinese New Year festive sales in January 2009 combined with stronger sales from high jackpots in the Mega 6/25 game and lower revenue from its hotels and resorts division which saw cutbacks in business travel due to the global economic downturn.
  
  BLand said the lower revenue was partly mitigated by a two-fold increase in property sales from several successful residential and commercial development sales launches by the property development division.
  
  Despite the lower revenue, it said the group’s pre-tax profit was marginally higher at RM79.65 million versus RM78.89 previously mainly due to the higher profit contribution from the property development division, higher share of profits from associated companies and lower finance costs.
  
  It said these offset the impairment in value of quoted investments, investment in associated companies and loss on partial disposal of investment in a subsidiary company, all totalling RM12.36 million.
  
  For the nine months ended Jan 31, 2010, net profit was RM35.42 million versus a net loss of RM48.17 million a year earlier.
  
  The higher profit was attributed to higher net investment income consisting mainly of reversal of impairments in value of quoted investments in the current period arising from improved stock market conditions compared to the previous year where the group incurred substantial impairments in value of investments in associated companies and quoted securities due to poor stock market performance.
  
  Revenue was RM2.93 billion from RM3.18 billion while earnings per share was 2.84 sen from loss per share of 3.84 sen.
  
  On its prospects, it expected the property market and the hotels and resorts businesses to rebound.
  
  “BToto’s principal subsidiary, Sports Toto (Malaysia) Sdn Bhd, had on March 18, 2010 launched its new game, Supreme Toto 6/58 in replacement of its Super Toto 6/49 game.
  
  “The Supreme Toto 6/58 game offers a guaranteed minimum upfront jackpot of RM8,888,888 which is the highest in town,” it said.
  
  “With the launch of Supreme Toto 6/58 lotto game, the directors are optimistic that the NFO business under BToto will be good in the remaining quarter of the financial year ending April 30, 2010.”
  
  
  This article appeared in The Edge Financial Daily, March 23, 2010.

Here comes the trick question. Who owns this two papers?

Berjaya Land Recorded Huge Losses

I chuckled when I saw Berjaya Land earnings. I remembered this stock so well. On October 17, 2007 I wrote Berjaya Land Is A Growth Story?

I was amazed because Berjaya Land had a RATHER POOR earnings history but yet the analyst decided to proclaim the growth story in Berjaya Land.

• In 2003, it earned 134 million
  In 2004, it earned 94 million.
  In 2005, it earned 67.5 million
  In 2006, it earned 89.1 million.
  In 2007, it earned 32.3 million! (Where the growth story??)

Past other postings.

• What's to happen to Berjaya Land's Growth Story?
• More interesting Stuff at Berjaya Land
• Everything's Ok for Berjaya Land, so says ...

On 21 March 2009, I wrote two postings on Berjaya Land describing what was happening.

• Looking Back At Berjaya Land: Part I
• Looking Back At Berjaya Land: Part II

Berjaya Land had recorded two consecutive quarters of losses by March 2009. LOL! Where's the growth story?

Today Berjaya Land announced another set of losses!

Note: The previous year 'impressive' earnings were all boosted by several 'one off' gains. (do refer Looking Back At Berjaya Land: Part I and Looking Back At Berjaya Land: Part II )

Now the company DID give a lengthy reasoning for their poor peformance.

• The Group recorded a revenue of RM973.2 million and a pre-tax profit of RM26.9 million in the current quarter ended 30 April 2009 as compared to a revenue of RM1.0 billion and a pre-tax profit of RM634.9 million reported in the preceding year corresponding quarter. The lower revenue was mainly due to the lower revenue contribution from the gaming business operated by Sports Toto Malaysia Sdn Bhd ("STMSB"), a principal subsidiary of BToto. In the corresponding quarter ended 30 April 2008 STMSB had the benefit of traditionally higher sales from the Chinese Lunar New Year festival that fell in February 2008. The hotels and resorts division of the Group also reported lower revenue mainly due to the prevailing economic crisis that had adversely affected the hospitality industry. Further, the property development division reported lower property sales mainly due to the soft property market.
  
  The lower pre-tax profit in the current quarter under review was mainly due to:
  
  (i) lower revenue from the hotels and resorts business arising from lower room sales;
  (ii) lower property sales registered by the property development division;
  (iii) impairment in values of certain investments in associated companies, jointly controlled entities and property, plant and equipment as well as quoted shares due to the stock market downturn as detailed in Note A4(i);
  (iv) higher share of losses of jointly controlled entities that the Group had equity accounted for; and
  (v) higher foreign exchange losses arising from translation.
  
  In the previous year corresponding quarter, the Group recorded a total net exceptional gain of RM580.5 million mainly arising from the placement of 150 million of 5% ICULS 1999/2009 amounting to approximately RM598.9 million.
  

The nice stock performance.

Looking Back At Berjaya Land: Part II

It's now Feb 2008.

05-02-2008: BLand raises stake in BToto to 48.96%

• KUALA LUMPUR: Berjaya Land Bhd (BLand) has raised its stake in Berjaya Sports Toto Bhd (BToto) to 48.96% as of yesterday from 48.76% on Jan 21, mainly due to the acquisition of one million BToto shares by a BLand subsidiary and BToto’s recent share buyback of three million shares.
  
  In a statement yesterday, BLand said the number of shares that had been bought back and retained as treasury shares was 93 million, while the number of shares with voting rights was 1.26 billion. BToto’s paid-up capital now stood at RM135.1 million comprising 1.35 billion shares of 10 sen each.
  
  BLand said several other subsidiaries of Berjaya Corporation Bhd (BCorp), the holding company of BLand, also had a total interest of 1.11% in BToto.
  
  “As BCorp group’s interest in aggregation with BLand group’s interest in BToto is now more than 50%, BToto will be deemed as a subsidiary of BLand,” the statement said.

20-02-2008: BLand unit places out ICULS to Goldman Sachs at RM250m

• KUALA LUMPUR: Berjaya Land Bhd’s (BLand) unit, Immediate Capital Sdn Bhd (ICSB), has placed out 50 million units of irredeemable convertible unsecured loans stocks (ICULS) 1999/2009 to Goldman Sachs International at RM5 per ICULS or a total of RM250 million cash, said BLand in a statement yesterday.
  
  The placement, which was carried out through a direct business transaction, would result in a gain of RM200 million, said the company.....

The company continued wheeling and dealing.

27 Feb 2008: BLand unit buys more stake in Piccolo owner

24th March 2008: Quarterly rpt on consolidated results for the financial period ended 31/1/2008, Berjaya Land announced a net profit of 115.057 million.

• ... pre-tax profit of the Group was mainly due to the recognition of gain on disposal of investment properties (KL Plaza properties by Noble Circle (M) Sdn Bhd and Sinar Merdu Sdn Bhd) amounting to RM140.0 million.

Yeah, despite being aided by the extra gain in disposal of property amounting to 140 million, Berjaya Land's net earnings was only 115.057 million.

And the wheeling continued. 30th April 2008: Berjaya in RM11b joint venture

20th June 2008: Quarterly rpt on consolidated results for the financial period ended 30/4/2008

Berjaya Land earnings soars to 627 million. Again it was NOT impressive! As stated by Berjaya Land in its earnings.

• The significant increase in pre-tax profit of the Group was mainly due to recognition of the gain on placements of 150 million units of 5% ICULS 1999/2009 amounting to approximately RM598.9 million and the recognition of negative goodwill amounting to RM34 million arising from several business combinations.

Gains made by Berjaya Land from its ICUL and the negative goodwill was already more than its quarterly earnings. What about Berjaya Land own core business? No contributions at all?

Let's look at the chart now.

July 2nd 2008: Vietnam project set to boost BLand property division

• HO CHI MINH CITY: Berjaya Land Bhd (BLand) expects its property segment to contribute up to 50% of total earnings in about four years.
  
  This will be backed by its largest overseas project, the US$7.5bil Vietnam International University Township (VIUT)....

Market now reacted negatively. Berjaya Land went from 4.28 to close at 3.98 on 2nd July 2008.

What to do now?

Share buybacks were the answer according to Berjaya Land.

31st July 2008: Notice of Shares Buy Back - Immediate Announcement. Berjaya Land paid between 4.36 and 4.40 for the first of its many buybacks. Do look where this spot is marked in the chart later. (do note the conversion of ICULS is still happening all this while)

Sept 16th 2008: Berjaya Land in US$2b Libyan foray

Sept 19th 2008: Quarterly rpt on consolidated results for the financial period ended 31/7/2008

Net earnings was only 683 thousand! Stock closed at 4.00 on the 19th. All quiet from ECM Libra and SJ Securities.

21st October 2008: BLand may put projects on hold

• KUALA LUMPUR: Property company Berjaya Land Bhd may put some of its projects on hold due to the current bearish market sentiment but is still confident of generating some RM350mil in property sales in its financial year ending April 30, 2009, said chief executive officer Datuk Francis Ng.
  
  But the company’s huge projects in Vietnam would not be affected, Ng said, pointing out he expected the property slowdown in Vietnam to be short term.
  
  “We will proceed with our Vietnam ventures because it is a long term investment,” he said, adding that the company’s four property development projects in Vietnam were worth about US$2.5bil in gross development value (GDV)....

I do understand the rational to put these projects on hold.

3 November 2008 Berjaya Jeju Resort slated to be launched in first quarter 2009

• BERJAYA Jeju Resort, which will be developed into a world-class integrated tourism and recreational destination on the honeymoon island of Jeju, will mark Berjaya Land Bhd’s (BLand) entry into South Korea’s property market when the project is launched in the first quarter of next year...

3 November 2008 High growth in BLand overseas ventures

• ....While cautious of the impact of the global financial meltdown on the property market, chief executive officer Datuk Framcis Ng said: “We are invested in these countries for the long term and we have confidence that these countries are resilient enough to weather the downturn and recover when the global economy picks up in time.”He does not discount the need to slow down or defer some of the company’s projects if the demand is not there....

Berjaya Land shares is now worth only 3.62...

17th December 2008: Quarterly rpt on consolidated results for the financial period ended 31/10/2008

• 18-12-2008: BLand posts RM48.5m 2Q loss
  
  KUALA LUMPUR: Berjaya Land Bhd (BLand) slips into red in the second quarter ended Oct 31, 2008 (2QFY09), posting a net loss of RM48.5 million in a sharp reversal from a net profit of RM325.4 million a year earlier.
  
  At pre-tax level, its profit fell 85% to RM49 million from RM329 million a year earlier.
  
  This was mainly due to lower progress billings and rental contributions from the hotels and resorts division, as well as additional impairment in value of investments in an associated company as well as certain quoted investments arising from the stock market downturn.
  
  Additionally, the previous year’s results included a total exceptional gain of RM378.8 million arising from the placement of 170 million 5% ICULS 1999/2009, disposal of Berjaya Corporation Bhd ICULS 2005/2015 and the divestments of Berjaya Hotels & Resorts (Mauritius) Ltd and Berjaya Mahe Beach (Cayman) Ltd.
  
  Revenue came in at RM1.06 billion versus RM175.6 million previously mainly due to the consolidation of Berjaya Sports Toto Bhd (BToto) as a subsidiary company effective February 2008.
  
  For the first half ended Oct 31, its net loss stood at RM47.82 million versus a net profit of RM363.5 million a year earlier. No dividend was declared.
  
  BLand said its directors took recognisance of the prevailing global economic conditions arising from the financial meltdown in the West and its contagion effect on the regional and Malaysian economies.

By now, Berjaya Land was trading around 3.28.

And Berjaya Land still continued its share buybacks...

Here's one announcement dated 27th Feb 2009. Notice of Shares Buy Back - Immediate Announcement. Price paid was between 2.98 and 3.00.

Remember back on 31st July 2008, Berjaya Land initial buyback was between 4.36 and 4.40!

Ouch! Ouch! Ouch!

Last night Berjaya Land announced its earnings.


And Bernama decides to talk about pretax profit.....???

• Saturday March 21, 2009
  
  Berjaya Land Q3 pre-tax profit down
  
  BERJAYA Land Bhd (BLand) says its pre-tax profit in the third quarter ended Jan 31 fell to RM78.9mil from RM122.3mil in the previous corresponding period.
  
  The lower pre-tax profit was mainly due to lower progress billings from the property development division and lower rental income from the property investment division, it says in a statement.
  
  In addition, the group recorded an exceptional gain of RM97.6mil from the disposal of the KL Plaza properties in the previous corresponding quarter, it says.
  
  BLand, however, reported a big jump in revenue to RM1.16bil from RM181.18mil, which it attributes mainly due to the consolidation of Berjaya Sports Toto Bhd (BToto) as a subsidiary company effective February 2008.
  
  For the nine months ended Jan 31, its pre-tax profit fell to RM211.6mil from RM484.8mil in the previous corresponding period while revenue rose to RM3.18bil from RM506.9mil previously.
  
  BLand expects the prevailing global economic conditions to affect the group’s hotel, resort and property development business in the remaining quarter of the financial year ending April 30.
  
  However, the numbers forecast operator business under BToto is expected to remain resilient, it adds. – Bernama

And I end my story on Berjaya Land for now with the chart of Berjaya Land since 2007.

Yeah, Berjaya Land last traded at 2.93. (see Looking Back At Berjaya Land: Part I )

Looking Back At Berjaya Land: Part I

It's great fun to read the chain of news and events following a stock over the years.

No joke.

Take the Berjaya Land story.

Let me say this again. Anyone who had purchased this stock early in 2007, would have been laughing all the way to the bank by end Dec 2007.

It was a bull market and Berjaya Land was simply a winner.

Oct 17th 2007, I wrote on Berjaya Land: Berjaya Land Is A Growth Story?

I questioned the growth story mentioned in the local papers. It featured ECM Libra incredible declaration that Berjaya Land was a growth story.

I questioned the claim and in the blog posting, I loaded the picture of the chart depicting Berjaya Land past earnings record and it was crystal clear for me that it was not a growth stock!

As per the table showed in the article, Berjaya Land Is A Growth Story?, one would have noted that ECM Libra DID NOT bother to mention what Berjaya Land earned for 2003 and 2004. Coming from a research house, I was amazed that ECM Libra did not bother to show the bare minimum of at least a five year track record. How could one declare a growth story based on a three-year track record?

Well Berjaya Land earned 134 million in 2003 and only 94 million in 2004 and if I lined these facts up, Berjaya Land's 5 year track record would had looked like this.

In 2003, it earned 134 million
In 2004, it earned 94 million.
In 2005, it earned 67.5 million
In 2006, it earned 89.1 million.
In 2007, it earned 32.3 million!

Would one declare this as a growth stock? The earnings DECLINED from 134 million in 2003 to only 67.5 million in 2005.

Anyway Berjaya Land closed at 3.32 on Oct 17th 2007.

Now I would note the sale of KL Plaza by Berjaya Land in Aug 2007. BLand sells KL Plaza for RM471m and of course Berjaya Land places out RM170m ICULS to UBS, Goldman Sachs (disposal would would result in a gain of about RM340 million )

And other research houses started to jump on to the bandwagon. Here is a snippet from an article on the EdgeDaily (url is broken since the Edge has changed server)

• 19-10-2007: BLand ripe for re-rating
  
  BERJAYA Land Bhd (BLand) deserves a re-rating based on its venture into Vietnam, which is currently enjoying a property boom on the back of rapid urbanisation and strong average gross domestic product growth of 7.2% over the last decade, according to SJ Securities Sdn Bhd.
  
  “In Vietnam, the current demand for property far outstrips supply. Thus, the group’s move into Vietnam to capitalise on this opportunity is indeed timely,” said the research house.
  
  In a research note yesterday, it placed an Overweight call on the stock at RM3.32 and expected to re-rate its realised net asset value (RNAV) valuation to RM10.16 per share based on a two-stage valuation of BLand’s local and overseas ventures.
  
  BLand is the first Malaysian com-pany to be granted with investment licence to undertake mixed development property project in Hanoi — a joint venture with a total gross development value (GDV) of RM1.7 billion over five years....

A RNAV valuation of 10.16?? LOL! Mind you that on 3rd January 2007, Berjaya Land was only trading at 70 sen (!) and at that moment of time when SJ Securities was looking at Berjaya Land trading at 3.32!

Huge news continued to flow for Berjaya Land. BLand, Jeju to build US$500m complex (a rm1.7 billion project in South Korea!)

31st Oct 2007, it was Kenanga's turn to blow the trumpet : BLand sees growth in property sector and Kenanga gave Berjaya Land a target of 7.61. The small little chart on that Star article is reproduced.

See how Berjaya Land was only 0.70 sen at the start of the year? See how ot was 4.30 on Oct 2007 (up an incredible 514.3%!)

There was no stopping Berjaya Land.

November 14th 2007. BLand Purchases luxury hotel in Vietnam from Tradewinds ( Deal was worth some US75 million or 253.3 million ringgit)

And all these while, loan stocks were converted. Shares were high and it was a good reason to convert them into ordinary shares. ( Here is one such announcement of many posted on Bursa ( Bbjland conversion ))

And Berjaya Land continued to hog the limelight. In December 2007, Berjaya Land to buy Faber Labuan for RM226.5m and BLand aims big in Vietnam property sector and 13-12-2007: BLand in RM8.4b Vietnam JV project

• 13-12-2007: BLand in RM8.4b Vietnam JV project
  By Gan Yen Kuan
  
  HANOI: Berjaya Land Bhd (BLand) has teamed up with Hanoi Electronics Corporation (Hanel) to undertake a US$2.5 billion (RM8.4 billion) integrated residential, commercial and industrial township project in Long Bien district, Hanoi.
  
  The latest project increases the total gross development value (GDV) of BLand’s projects in Vietnam to about RM40 billion, said Berjaya Corporation Bhd (BCorp) chairman and chief executive officer Tan Sri Vincent Tan Chee Yioun.
  
  BCorp, which is the parent of BLand, signed the agreement of cooperation with Hanel here yesterday. The joint-venture company Berjaya-Hanel Co Ltd is acquiring 405 ha of land from Hanel for the township project...

17th December, Berjaya Land's Quarterly rpt on consolidated results for the financial period ended 31/10/2007

The Edge quickly trumps on Berjaya Land 'success': Berjaya Land chalks upRM325.4m net profit in 2Q.

• KUALA LUMPUR: Berjaya Land Bhd’s (BLand) net profit soared to RM325.4 million in its second quarter (2Q) ended Oct 31, 2007, compared with RM8.6 million a year earlier, after it registered exceptional gains of RM339.2 million.
  
  Announcing its 2Q results yesterday, BLand said revenue for the quarter increased 44% to RM175.6 million due to higher sales in its property development business, in spite of lower revenue recorded from its hotels and resorts division, which completed the disposal of Berjaya Le Morne Beach Resort & Casino, Mauritius and Berjaya Mahe Beach, Seychelles last August.
  
  The group said it registered the exceptional gains from the placement of 170 million 5% BLand irredeemable convertible unsecured loan stocks (ICULS), the disposal of the hotels (gain of RM26.7 million) and the disposal of 100 million Berjaya Corporation Bhd ICULS (gain of RM12.9 million)....

A profit of 325.4 million boosted by exceptional gain of 339.2 million? ... ? :p

And folks from SJ Securities continued to be bullish about Berjaya Land despite Berjaya Land now trading at 5.60 on 21 Dec 2007. 21-12-2007: Better earnings outlook for BLand

• SJ SECURITIES has revised upwards its estimation of Berjaya Land Bhd’s (BLand) financial year ending April 30, 2008 (FY08) results and maintained an overweight call at RM5.60 on the property developer’s stock.
  
  The research house said its revision was based on exceptional gains reported in BLand’s second quarter ended Oct 31, 2007 (2QFY08) results.
  
  It said the gains comprised RM339.2 million from the placement of 170 million 5% BLand irredeemable convertible unsecured loan stocks (ICULS), RM26.7 million from the disposal of the Berjaya Le Morne Beach Resort & Casino in Mauritius and the Berjaya Mahe Beach Resort in Seychelles in August and RM12.9 million from the disposal of 100 million ICULS of parent company, Berjaya Corporation Bhd.
  
  “We are also revising our fair value for BLand to RM6.44, after imputing the contribution of its first Hanoi project, Thach Ban New City, into our valuation. We believe the revision is timely as our recent visit to Vietnam convinces us that the group is on track to launch this project by 1Q of 2008,” it said.

Then came January 25th 2008. Berjaya Lands announces it will abort its Vietnam project and I blogged on it the next day: What's to happen to Berjaya Land's Growth Story?

• BERJAYA Land Bhd's plans of developing residential and commercial properties in Vietnam's Nhon Trach district has fallen through.
  
  In an announcement to Bursa Malaysia yesterday, Berjaya Land said it will not proceed with its co-development plans with Tin Nghia Co Ltd, a leading state-owned enterprise in Dong Nai.
  
  The property development is inclusive of its transportation and infrastructure network.
  
  "The board wishes to inform that after much discussion and consideration, the parties involved have decided not to proceed with the project based on the findings of the feasibility study report," Berjaya Land said.

I was amazed. Despite this setback in Vietnam, the company came out strongly defending the company's growth potential.

See the following two articles Major projects set to push BLand ahead and Group has projects worth RM60bil in Asia-Pacific.

On the 29th January, Kenanga and SJ were both unfazed and I wrote Everything's Ok for Berjaya Land, so says ...

What were to happen to Berjaya Land???

To be continued...

Looking Back At Berjaya Land: Part II

Everything's Ok for Berjaya Land, so says ...

Ok, despite aborting that one project in Vietnam, ALL the analysts covering Berjaya Land have gone record and stated that BLand ratings unaffected by move to drop Viet project.


I have added some comments in purple italics.

• BLand ratings unaffected by move to drop Viet project
  
  By Chong Pooi Koon Published: 2008/01/29
  
  The head of research at Kenanga Investment Bank says it is all right for the company to pick and choose projects that are economically feasible (Err.. that's rather common cow sense eh? Which logical company wants to embark on a project that is doomed to lose money?)
  
  BERJAYA Land Bhd's decision to drop a planned transportation infrastructure job in Vietnam last week did not stir concerns among analysts, who believe that the firm will be better off picking jobs that are more financially viable.
  
  The group is already occupied with five property development projects in both Hanoi and Ho Chi Minh City and they are not too worried about a single infrastructure job that did not pan out well.
  
  "We understand that cessation of the proposed project would have minimum impact on the group's venture in Vietnam," a SJ Securities analyst who tracks the stock wrote in a report yesterday. The broker kept its "overweight" call on BLand stock, which ended flat yesterday at RM5.80.
  
  BLand last Friday said that it will not proceed with a plan with Tin Nghia Co Ltd, a state-owned company from the southern Dong Nai Province, on the overall development of Nhon Trach District that included its transportation network.
  
  The companies have decided to let the memorandum of understanding signed in late 2006 lapse, after a 12-month extended feasibility study done by BLand.
  
  "I think it is all right for them to pick and choose projects that are economically feasible," the head of research at Kenanga Investment Bank, Yeonzon Yeow said.
  
  "This is one of the earlier joint ventures that they did not announce. The firm already has its hands full in Vietnam and we don't mind that this is not working out," he added. ( Well I am certainly puzzled with what's being said here. I, for one, was aware of this joint venture and there was announcements made on Bursa website by Berjaya Land. See MEMORANDUM OF UNDERSTANDING BETWEEN BERJAYA LAND BERHAD AND TIN NGHIA CO LTD, VIETNAM and BERJAYA LAND BERHAD ("BLB" or "Company") EXTENSION OF TIME FOR THE MEMORANDUM OF UNDERSTANDING ("MOU") BETWEEN BLB AND TIN NGHIA CO LTD, VIETNAM IN RESPECT OF THE PROPOSED CO-DEVELOPMENT OF THE NHON TRACH DISTRICT (INCLUSIVE OF ITS TRANSPORTATION AND INFRASTRUCTURE NETWORK), DONG NAI PROVINCE, VIETNAM ("PROPOSED PROJECT") )
  
  Both BLand and the Viet- nam partner have decided to focus instead on specific developments within the district, which involves a bridge that links the area to Ho Chi Minh City, as well as the recently announced plan to develop a 600ha in Nhon Trach New City.
  
  The bridge is part of the initial overall plan that was scrapped.
  
  On top of that, BLand still has other projects in that country, including Thanc Ban New City mixed development, Hanoi Electronics joint venture, Vietnam Financial Centre in Ho Chi Minh City.

How?

Yes, since Berjaya Land has tons of projects announced in Vietnam and judging from the size of these projects, perhaps there are valid arguments that Berjaya Land could still have a bright future ahead...

but.. assuming that I am a share holder and from my investor prospective, then perhaps this episode should serve as a caveat for me and that I should not discount the issue of execution risks involved in all these mega projects. Projects do get delay, projects do get aborted and sometimes the profitability is not as it seems.

What say you?

More interesting Stuff at Berjaya Land

Previously blogged: Berjaya Land Is A Growth Story? and What's to happen to Berjaya Land's Growth Story?

Well, with the announcement that Berjaya Land had aborted one of their Vietnam projects (in Nhon Trach district), this should have put a huge damper in Berjaya Land's so-called growth story.

Which gave it a huge possibility that the stock could be hit pretty bad this morning (Stock open down 30 set at 5.50), however, I then noticed two articles published on the Star Business.

• Major projects set to push BLand ahead
• Group has projects worth RM60bil in Asia-Pacific

I am amazed. Despite this setback in Vietnam, the company came out strongly defending the company's growth potential.

So how?

What's to happen to Berjaya Land's Growth Story?

Previously I made the following blog entry: Berjaya Land Is A Growth Story?

I had questioned the growth story suggested.

I argued that....

• Now, let's look at Berjaya Land growth as stated.
  
  In 2005, it earned 67.5 million
  In 2006, it earned 89.1 million.
  In 2007, it earned 32.3 million! (hey... where's the growth????)
  
  Seriously. Won't that had been deemed as a DRASTIC decline in earnings???
  
  Anyway... here is the whopping growth...
  
  In 2008, Berjaya Land is FORECASTED to earn a whopping 497.2 million!
  In 2009, Berjaya Land is forecasted to earn only 212.5 million!

However in that news article, ECM Libra had their own reasoning.

• "Our recent visits with the management have left us coming away fairly optimistic of BLand's growth prospects," ECM Libra Avenue wrote in a note on last Thursday.
  
  Citing examples, the research house indicated a 33-sen annual rise in BLand's fully-diluted earnings per share by applying a 10 per cent net profit margin on its RM37.2 billion worth of property jobs in China, Thailand and Vietnam.
  
  This, in turn, translates into a RM3.7 billion net profit to be recognised over the next 10 years.

RM37.2 billion worth of potential property jobs.

Now this massive potential suffered a huge hit this morning when news article reported that Berjaya Land has made the following announcement.

• Berjaya Land aborts Vietnam project
  
  Published: 2008/01/25
  
  BERJAYA Land Bhd's plans of developing residential and commercial properties in Vietnam's Nhon Trach district has fallen through.
  
  In an announcement to Bursa Malaysia yesterday, Berjaya Land said it will not proceed with its co-development plans with Tin Nghia Co Ltd, a leading state-owned enterprise in Dong Nai.
  
  The property development is inclusive of its transportation and infrastructure network.
  
  "The board wishes to inform that after much discussion and consideration, the parties involved have decided not to proceed with the project based on the findings of the feasibility study report," Berjaya Land said.
  
  Berjaya Land had signed a memorandum of understanding in November 9, 2006 but the memorandum will now be mutually terminated by the related parties.

How?

Now with Berjaya Land aborting this Vietnam project, serious re-think is required in regards to it's whopping growth story as suggested by Berjaya Land.

Couple of issues.

One, the feasibility of a project, I keep wondering why such a study was made before Berjaya Land signed that MOU.

And lastly, MOU is MOU is just a MOU.

Btw. I had received an extremely interesting comment from PJ-investor in my initial posting on this issue:

• Know what? i notice ECM always exaggerate their reports. even after doing my calculations, i could'nt match theirs. THere are only 2 possiblities, either ECM people know something that we dont, or they simply miscalculate and exaggerate.Or, it could be that BERJAYA bosses tell them to write something ridiculous to push the stock higher then simply sell a lot at the top. i dont know...

Berjaya Land Is A Growth Story?

Berjaya Land is a growth story so says ECM Libra Avenue.

Business Times carried a short write of ECM Libra Avenue research notes in today's papers ( here )

• BLand a growth story, says ECM Libra Avenue
  
  October 17 2007
  
  BERJAYA Land Bhd (BLand) is a growth story, says ECM Libra Avenue Securities, taking into account the property firm's earnings-enhancing business portfolio.
  
  Of significant interest about BLand are its six overseas projects worth RM37.2 billion in addition to undeveloped valuable land in Kuala Lumpur.
  
  BLand is also expected to enjoy steady cash flows from dividends as well as equity-accounted profits from its 48 per cent stake in "crown jewel" associate Berjaya Sports Toto Bhd (BToto).
  
  "Our recent visits with the management have left us coming away fairly optimistic of BLand's growth prospects," ECM Libra Avenue wrote in a note on last Thursday.
  
  Citing examples, the research house indicated a 33-sen annual rise in BLand's fully-diluted earnings per share by applying a 10 per cent net profit margin on its RM37.2 billion worth of property jobs in China, Thailand and Vietnam.
  
  This, in turn, translates into a RM3.7 billion net profit to be recognised over the next 10 years.
  
  On BToto, ECM Libra Avenue expects the gaming entity to sustain its 40-sen gross dividend per share payout at least in the next three years, hence, translating into an eight per cent gross yield.
  
  On BToto's 90 million treasury shares, it said that if the shares were cancelled, it would reduce BToto's share capital base and, therefore, increase its earnings per share.
  
  However, shareholders also stand to gain higher dividends if BToto decides to sell the securities in the market, assuming the entire proceeds are returned to shareholders as a special dividend.
  
  "BLand stands to benefit significantly given its controlling 48 per cent equity stake in BToto," said ECM Libra Avenue, which initiated coverage on BLand with a "buy" call and a RM5.50 price target.

The above table is posted in that article.

Now, let's look at Berjaya Land growth as stated.

In 2005, it earned 67.5 million
In 2006, it earned 89.1 million.
In 2007, it earned 32.3 million! (hey... where's the growth????)

Seriously. Won't that had been deemed as a DRASTIC decline in earnings???

Anyway... here is the whopping growth...

In 2008, Berjaya Land is FORECASTED to earn a whopping 497.2 million!
In 2009, Berjaya Land is forecasted to earn only 212.5 million!

Err... IF 2008 numbers can ever be achieved.. then surely 2009 earnings of 212.5 million would have been a DISASTER for Berjaya Land, right?

And just for the record.. Berjaya Land earned 38.203 million for the first quarter of its fiscal 2008.

Which means, for Berjaya Land to achieve this INCREDIBLE earnings projection of 497.2 million, Berjaya Land has to earn some 459 million for its remaining 3 quarters.

Oh.. and if my maths is correct.. and if my calculator fails me not, that's ONLY about a quarterly earnings of 153 million!

Ahem.. which means... ECM Libra is saying that Berjaya Land earnings to increase by a WHOPPING 500% percent the next quarter!

And now that is GROWTH babe!

Fooooooooooo!!

Can I vote this as the SEXIEST report of the year?