Yoma swings to $4.9m Q3 loss on higher finance expenses, absence of gains from Memories spin off

SINGAPORE - Mainboard-listed Yoma Strategic Holdings sank to a fiscal third-quarter net loss of $4.9 million from a year-ago $16.8 million profit on higher finance expenses and the absence of one-off gains, the Myanmar-focused conglomerate reported on Wednesday (Feb 13), before the market opened.

Loss per share for the three months ended Dec 31, 2018, came to 0.26 cent, compared with earnings per share of 0.91 cent the year before. Yoma shares changed hands at 36 cents as at 9.09am on Wednesday, down 1.4 per cent or half a cent. No dividends were declared for the quarter.

For the nine-month period, net profit fell 76.9 per cent to $5.3 million, or 0.28 cent per share.

Third-quarter revenue rose 12.1 per cent to $27 million on better results from three of the group's core businesses - Yoma Land, Yoma F&B and Yoma Financial Services, which helped to offset the slower performance in Yoma Motors, the company said.

Other income plunged 73.3 per cent to $7.1 million from $26.8 million in the year-ago quarter, when the company benefitted from a $27.7 million one-off net gain from the spin-off of its non-core tourism-related businesses into Memories Group.

Finance expenses also rose to $7.0 million from $759,000 due to a higher amount of borrowings, a rising interest rate environment and currency translation losses, Yoma said. The group had $619.6 million of liabilities as at end-December, of which about $369 million stem from borrowings. Net asset value per share increased to 38 cents as at Dec 31, from 37.74 cents as at March 31, 2018.

Administrative expenses declined by 7.5 per cent to $13.5 million through efficiency improvements and cost control measures, it added.

Yoma CEO Melvyn Pun said the group's food and beverage (F&B) platform continues to grow with the expansion of its KFC business and now the recently announced addition of the Yankin Kyay Oh Group of Companies (YKKO) restaurant chain. Both brands are expected to drive revenue and positively contribute to the earnings of Yoma F&B, he said.

He added that the issuance of the group's oversubscribed US$70 million AAA-rated five-year bonds in the Thai baht market will also "significantly strengthen balance sheet".

Serge Pun, Yoma's executive chairman, said real estate remains the group's "largest operation". The company also "remains optimistic about the business prospects ahead".

Earlier this week, Yoma said it is acquiring a 65 per cent stake in YKKO for around 19.4 billion Myanmar kyat (S$17.1 million). The amount, to be funded by internal resources and recent financing activities, took into account the current and projected earnings of YKKO as at Sept 30, 2018.

The move looks to double the footprint of the company's F&B store count and better complements the international concepts the company brought to Myanmar, Mr Pun said at the time.