CIMB cuts Berjaya Food forecasts amid weak Q3, sluggish sales recovery
CIMB Securities has raised its core net loss estimates for the company to RM133 RM133million, RM74 million and RM23 million for financial year 2025 (FY25), FY26 and FY27, respectively.
The estimates were revised upwards from the previous forecast of RM104 million, RM61 million and RM20 million.
The firm also lowered its target price for the stock to 28 sen from 32 sen previously.
Berjaya Food reported a core net loss of RM36.7 million in 3QFY25, after adjusting for one-off items of RM0.5 million. This brought the cumulative nine-month core net loss to RM101.2 million, missing CIMB Securities' expectations at 97 per cent for the FY25 previous loss estimate and 110 per cent of the Bloomberg consensus forecast.
"The earnings miss is attributed to lower-than-expected revenue from Starbucks and Kenny Rogers Roasters operations, as well as higher-than-expected start-up costs for its overseas expansion efforts," it said in a note.
Berjaya Food is likely to post narrow losses in Q4 Q4FY25 following the end of Ramadan fasting in March. Additionally, the company has indicated early signs of recovery at its Malaysia Starbucks outlets, as the impact of the boycott related to the Israel-Palestine conflict appears to be easing.
"The group's ongoing efforts to rationalise its store network by closing underperforming outlets may also support loss mitigation."
The firm maintained its 'Reduce' call on the stock.
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