KUCHING: TA Enterprise Bhd’s (TA Enteprise) net loss widened to RM54.9 million in the third quarter of financial year 2016 (3QFY16) ended October 2015 as compared to a net loss of RM30.61 million in 2QFY16 ended July 2015.
The company in a filing to Bursa Malaysia said 3QFY16 revenue decreased by 31 per cent year-on-year (y-o-y) to RM180.31 million from RM263.19 million generated in 3QFY15.
For nine months period to October 2015, TA Enterprise said turnover declined by 27 per cent y-o-y to RM546.67 million from RM747.47 million for nine months period to October 2014.
Correspondingly, TA Enterprise added earnings for nine months to October 2015 dropped by 85 per cent y-o-y to RM19.23 million from RM129.97 million in nine months to October 2014.
Meanwhile, TA Enterprise in its notes said despite contribution from property investment divisions and hotel operations, the group’s quarterly financial performance were dragged down by lower contributions from other segments.
In particular, the group noted its investment holding and others division reported loss before tax of RM68.5 million in 3QFY16 ended October 2015 as compared to loss before tax of RM36.5 million in 3QFY15 ended October 2014.
TA Enterprise explained that despite higher foreign exchange gains on Australian dollar and Canadian dollar denominated balances and lower expenses due to the absence of subsidiary acquisition related cost incurred in 3QFY15, the 3QFY16 loss was attributed to fair value loss on investment securities, lower interest income, higher foreign exchange loss on Singaporean dollar denominated balances.
Commenting on the group’s prospects, TA Enterprise said,”Although the recovery in the US economy is gaining momentum, the global economy is expected to remain subdued in view of the lower oil prices and China’s slowdown in growth.
“Domestic’s economy is expected to be more challenging due to slower export growth and anticipated moderate private consumption following the implementation of the Goods and Services Tax (GST) last year.
“For the broking and financial services division, the group will continue its expansion plan on the derivative trading and commodity products and services.
“The investment management unit will focus on expanding private mandate and corporate sales business with aggressive marketing effort via the introduction of good incentives.
“We will also attract and grow agency force to expand third party funds platform.
“We target to improve market share by tying up with more banks and distributors as well as apply for financial planning license to sell our products.
“Our latest stock broking branch in Georgetown, Penang commenced operations in January 2015.
“We will continue with our strategy of setting up branches as well as increase fee-based activities to boost our profits,” TA Enterprise said.
In the meantime, TA Enterprise believed the equity market is expected to remain volatile.
It opined that the volatility in the equity market could be due to interest rate hike expectations in the US that would induce outflow of foreign funds, weak commodity prices that may affect trade surplus, softer economic growth for China, which could undermine exports and the ripple effects caused by the Greek economic problems.
Furthermore, for the group’s credit and lending division, TA Enterprise said the division will increase financing activities by providing term loans to business enterprises for their working capital and to individuals for their investments.
The group said it expects a higher business turnover for the division by focussing on the above areas in the current financial year ending January 2016.
As for the group’s property investment division, TA Enterprise said the group is projected to experience lower income contribution from overseas and local property investments for the current financial year ending January 2016 in light of expected refurbishment works to be undertaken at some of its investment properties.
On completion of those refurbishment works, the group is confident the refurbished investment properties will generate higher return in the future.
For its property development segment, TA Enterprise said due to challenging economic outlook, stringent mortgage approvals, cooling measures introduced by the government and the wait-and-see approach adopted by property investors upon the implementation of GST, the group anticipates its property sales in Malaysia to soften and lower property sales are expected from our existing property stocks for this financial year.
Likewise, TA Enterprise said as the Australian property market is experiencing strong residential sales, the group will continue to focus on its Little Bay Cove project in Australia and hopes to roll out new launches from the project for the financial year.
“We are confident that our sales from these new launches in Australia will be resilient.
“For our hotel operations, the group’s hospitality businesses located in Singapore, Australia, Canada, China and Thailand will continue to generate recurrent income stream for the group.
“Improved result is expected from our hotel in Thailand which was affected by political unrest, refurbishment and upgrading works since last financial year.
“Lower income contribution is expected from our hotel located in Singapore due to major refurbishment works which are currently in progress.
“The group will continue to explore and evaluate opportunities to acquire new hotels to expandexisting hotels portfolio and to enhance revenue contribution from our hospitality business.
Barring any unforeseen circumstances, the group is expected to be profitable in the financial year ending January 31, 2016,” TA Enterprise believed.