Berjaya Land Berhad was first incorporated back in 1990 followed by the restructuring scheme undertaken by Sports Toto Malaysia Bhd. The entire paid-up capital of Sports Toto was acquired by Berjaya Land Bhd. It made major acquisitions of property and leisure activities funded via a Rights and Special Issue.
While third quarter of 1996, Teras Mewah Sdn Bhd (TMSB) completed the purchase of entire shareholding of Berjaya Land Bhd. from Reka Pacific comprising approximately 247.5 million in ordinary shares, 49.8 million warrants and 82.8 million Irredeemable Convertible Unsecured Loan Stocks for a total consideration of approximately 931.1 million. Thereafter, Berjaya Land Bhd. became a direct subsidiary of Berjaya Group, which it turned to be a wholly-owned subsidiary of Berjaya Corporation Berhad (BCorp).
The corporate logo comprises BERJAYA in gold and the symbol made up of closely interwoven Bs in rich cobalt blue color along with gold lining surrounding the circumference and a gold dot in the center. BERJAYA indicate “success” in Malay language and reflects the success and represent Malaysian character of Berjaya Corporation’s core businesses. The intertwining Bs of the symbol showing the strong foundations and the constant synergy takes place within Berjaya Corporation group of companies. Each B faces a different direction, depicting the varied strengths of the company that makes up the Berjaya Corporation group of companies.
The mission of the company is to generate consistently profitable returns for our shareholders from investments in core business activities. While the vision is by providing direction, financial resources and management support for each operating unit; through establishing a major market presence for each activity; and through dynamic and innovative management, teamwork and a commitment to excellence.
For the structure of an organization, there are four factors overall which are an organizational strategy, size, technology and environmental factors. Departmentalisation is an aspect of organizational structure which includes in the subdivision of a business into different units based on the functions or other criteria. For departmentalization, there are five types which are based on functions, products, matrix, customers and geographical. Thus, it can conclude that Berjaya Land Bhd. is applying functional departmentalization in the organization. The organization is structured into departments based on the relevant functions performed in the organization. For example, the construction based company may form by marketing, sales, finance department and accounting department. Functional departmentalization may be an added advantage because it can increase the production efficiency and expertise in the related field since all the activities are performed by a group of people that specializes in the sector. Other than that, it allows work to be carried out by individuals who are qualified and skilled in the specialized areas, reduces cost and each individual acquire the same work experiences to avoid conflict and burden for management. However, there are a few disadvantages. One of the disadvantages is facing difficulty in coordinating between departments, occur delays in decision-making, product managers and employees who are restricted by experience and expertise in the certain field.
As usual, large organizations will gain more advantages from practicing decentralization. Delegation is an effective method in helping managers to manage the increases in their workload. It is able to place the organization’s resources closer to consumers. They will be able to react more quickly to changes in consumer preferences. In addition, it allows reducing red tapes to help employees at the lower levels to make decisions faster when facing an issue. Thus, the freedom in decentralization encourages creativity and innovation in business operations and new product developments.
Berjaya Land Bhd has successfully appointed their new executive director Datuk Pee Kang Seng @ Lim Kang Seng as their chief executive officer (CEO) in January 2017. This is followed by Datuk Ng Sooi Lai’s redesignation from CEO to non-executive director effective end of December 2016. He holds a Bachelor of Civil Engineering (Honors) degree from University of Glasgow, Scotland. Besides, he also holds professional qualifications of Chartered Engineer C. Eng (UK) and Professional Engineer P. Eng (Malaysia). Upon his graduation in 1976, he joined Public Works Department till 1980 when he was appointed as the Chief Engineer of Kuantan Port Authority. He then left the Government Service in 1984 and joined Syarikat ISDA Sdn Bhd as a project director for 6 years. From 1990 to 2000, he worked for Hong Leong Group and holds various capacities including his appointment as the Group Managing Director of Hume Industries Berhad and C.I. Holdings Berhad. He joined Amsteel Corporation Berhad as the Group Managing Director in 2001 until his retirement in 2005.
After his retirement, he had worked in senior positions for various companies and involved in the property and construction industry. He has accumulated over 40 years of professional experience in managing companies and creating business values. He has a host of construction and property development experience that includes the construction of commercial, residential and high rise buildings. Other than that, he also holds directorships in several other private limited companies in the Berjaya Corporation group of companies and he is a member of the Risk Management Committee of the company.
Mr. Tan Thiam Chai was appointed as the Board on 18 April 2008 as the Executive Director. He was graduated with a Diploma in Commerce (Financial Accounting) from Kolej Tunku Abdul Rahman (now known as Tunku Abdul Rahman University College)and also completed The Association of Chartered Certified Accountants (UK) professional course in 1981. He is a Fellow member of the Association of Chartered Certified Accountants (UK) since 1990 and also a member of the Malaysian Institute of Accountants. He started work with an accounting firm in Kuala Lumpur for about 2 years and
thereafter served in various Finance and Accounting positions with the Hong Leong group of companies in Malaysia as well as in Hong Kong for about 8 years. He joined Berjaya group of companies in early 1991 as a Finance Manager of an operating subsidiary and was promoted to Operation Manager later that year. In 1992, he was transferred to the Corporate Head Office of Berjaya Group Berhad to head the Group Internal Audit function and subsequently in 1993, he was promoted to oversee the GroupAccounting function of Berjaya Group Berhad. Currently, he is the Chief Financial Officer of Berjaya Corporation Berhad. He is also a Director of Atlan Holdings Bhd, Berjaya Food Berhad, Cosway Corporation Berhad, Indah Corporation Berhad, Tioman Island Resort Berhad, Berjaya Vacation Club Berhad, Berjaya Starbucks Coffee Company Sdn Bhd and Cosway Corporation Limited (Hong Kong). He also holds directorships in several other private limited companies in the Berjaya Corporation group of companies. Tan Thiam Chai is a member of the Risk Management Committee of the Company.
Nerine Tan Sheik Ping was appointed to the Board on 11 January 2016 as an Executive Director. She graduated with a Bachelor of Science degree in Management (Second Class Honour) from the London School of Economics, United Kingdom, in 1998. She has more than 16 years of experience in sales, marketing, and business development in several operations. She started work as a Business Development Manager at Cosway (M) Sdn Bhd from January 1999 to September 2002 and she was mainly responsible for overseeing the sales and marketing of Cosway products. From September 2000 to March 2003, she was appointed as an Executive Director of
eCosway Sdn Bhd to oversee the development of an eCosway website with a software Developer. In addition, she was also appointed as Vice President in the Marketing division of Berjaya Resort Management Sdn Bhd (“BRM”) (now known as Berjaya Hotels ; Resorts (M) Sdn Bhd) in January 1999 and was appointed as Executive Director of Berjaya Hotels ; Resorts (S) Pte Ltd from January 2005 until her resignation in April 2009. During her tenure at BRM, she was overseeing the sales and marketing functions and development of spa management for different resorts. In February 2007, she was appointed as a General Manager (Sales ; Marketing) of Sports Toto Malaysia Sdn Bhd (“STMSB”) and was subsequently promoted as an Executive Director of STMSB in April 2010. Currently, she is overseeing the sales and marketing activities of STMSB including dealings with Government authorities. Currently, she is also an Executive Director of Berjaya Sports Toto Berhad, Berjaya Corporation Berhad and Berjaya Group Berhad. She also holds directorships in several other private limited companies. Nerine Tan Sheik Ping is a member of the Risk Management Committee of the Company.
Her sister, Chryseis Tan Sheik Ling is also a member of the Board while her father, Tan Sri Dato’ Seri Vincent Tan Chee Yioun is a major shareholder of the Company. She was appointed to the Board on 1 April 2016 as an Executive Director. She graduated with a Bachelor of Arts in Liberal International Studies from Waseda University, Tokyo in 2012. She also did an exchange program in Accounting and Finance in London School of Economics, the United Kingdom for a year in 2010. Currently, she is the Chief Executive Officer of Berjaya Times Square Sdn Bhd, a wholly-owned subsidiary of Berjaya Assets Berhad (“BAssets”), mainly involved in the marketing and overall management of Berjaya Times Square mall. She is also a Director of Berjaya Assets Food (BAF) Sdn Bhd (“BAF”), another wholly-owned subsidiary of BAssets, and she oversees BAF’s interest in the Food ; Beverage industry. BAF has secured the right to manage the franchise of Greyhound Café from Bangkok, Thailand in Malaysia with the successful opening of its first outlet at Jalan Bukit Bintang, Kuala Lumpur. She is also a Director and Chairman of Natural Avenue Sdn Bhd (“NASB”), a subsidiary of Berjaya Assets Berhad since 1 August 2014. NASB is the exclusive agent for Sarawak Turf Club’s Special Cash Sweep Number Forecast Lotteries in Sarawak. Presently, she is also an Executive Director of Berjaya Assets Berhad and she is also the Head of Marketing for Four Seasons Hotel and Hotel Residences Kyoto, Japan, a hotel, and residences development project undertaken by the Company’s associated company name, Berjaya Kyoto Development (S) Pte Ltd. Her sister, Nerine Tan Sheik Ping is also a member of the Board while her father, Tan Sri Dato’ Seri Vincent Tan Chee Yioun is a major shareholder of the Company. Chryseis Tan Sheik Ling is a member of the Risk Management Committee of the Company.
In 2016, BLand mentioned to a reporter that company was looking forward to building 500 units of affordable housing for people, especially for first time home buyers. The homes expected to be priced in the range of Rm 300,000 with units from 800 to 850 sq ft, would provide a fruitful opportunity especially or young people to own a home. He mentioned that the state government had already imposed regulations to ensure developers build affordable homes for people when constructing a project. 60% of the houses sold to mostly locals and it is scheduled for completion in May 2017.
According to The Star-news reported in 2016, Berjaya Land Bhd intends to build a Four Seasons hotel and hotel residences on 100-acre site n Okinawa after it launched its first Four Seasons hotel in Kyoto, Japan. It was expected to be completed in four years for undisclosed prices, but will minor in the concept of the hotel built in Kyoto, features a number of private residences that available to be sold to wealthy individuals.
Berjaya Land Bhd. posted a net loss of RM189.53mil for the financial year ended in April 2018. It is mainly due to a lower pre-tax profit caused by impairments made on for sale investments, assets, property, plant, and equipment amounting to approximately RM 223.8mil. Refers to Bursa Malaysia filing, Berjaya Land reported unfavorable foreign exchange translation effect due to the strengthening of ringgit and the lower share of profits from their associated companies.
BLand is an intermediate investment holding company of Berjaya Group with interests in gaming, motors, properties, hotels, and recreation. Its standalone credit profile remains weighed down by the challenging prospects for the domestic property industry, its sizeable debt and modest earnings from its non-gaming subsidiaries. BLand continues to rely on asset disposals to meet its principal financial obligations. The sale of its China Great Mall project in Beijing during financial year ended April 30, 2016 (FY2016) for RM680.9 million and half of its 100% stake in Berjaya Kyoto Development Pte Ltd, the developer of Four Seasons Hotel and Residence in Kyoto, for RM404.5 million enabled BLand to repay a net debt of RM323.2 million during the period. With the repayment, group borrowings declined to RM3.6 billion, resulting in a lower debt-to-equity ratio of 0.44 times as at end-July 2016.
MARC notes that despite the success of BLand’s hotel development in Kyoto, its other foreign property projects remain exposed to cross-border risks. The group’s mixed development project in Ho Chi Minh City, Vietnam has encountered delays due to regulatory approvals in the country. Its Jeju Island development project in South Korea has been suspended, following which BLand has managed to recover RM374.5 million through the sale of land to its local joint venture partner. It expects to recover the remaining RM646.0 million of its initial investment in the Jeju Island project through legal proceedings. The cross-border risks notwithstanding, BLand’s overseas projects would continue to provide the group with opportunities to realize a meaningful gain on investments.
MARC observes that BLand’s domestic property developments have remained subdued, with its focus remaining on ongoing projects in Bukit Jalil, Kuala Lumpur, and Georgetown, Penang. These projects have combined contracted sales of RM366 million and are expected to be completed in FY2018. The performance of its hotel, club and recreation divisions has remained weak despite some improvement in 1QFY2017.
BLand’s consolidated financial profile remains dominated by subsidiary Berjaya Toto Berhad (BToto), which accounted for about 95% of operating profit for 1QFY2017. BToto’s key subsidiaries are Sports Toto Malaysia Sdn Bhd (Sports Toto), a leading operator of number forecast operations (NFO) in Malaysia, and H.R. Owen Ltd, a motor retailing company in the UK. Sports Toto’s significant cash generation ability, with cash flow from operations averaging around RM350 million per annum over the last five years, underpins MARC’s AA-/Stable rating on the gaming company’s RM800 million MTN programme. The motor retailing subsidiary continues to face low margins, with contributions to operating profit remaining low.
For 1QFY2017, BLand recorded higher y-oy revenue of RM1.55 billion but weaker operating profit of RM115.6 million (1QFY2016: RM1.50 billion; RM145.1 million). The revenue improvement was mainly due to higher sales recorded by H.R. Owen Ltd in conjunction with its introduction of new car models. However, higher operating expenses and lower progress billings from property development operations reduced BLand’s profitability in 1QFY2017.
At the holding company level, BLand continues to derive the bulk of its dividend income from BToto amounting to RM89.2 million, or 64% of the total of RM139.6 million in FY2016. This was sufficient to meet interest payments on the holding company debt of RM1.2 billion or 35% of the group’s consolidated debt of RM3.6 billion. CFO interest cover stood at 4.69 times at the consolidated level and 1.77 times at the holding company level. The rated RM650 million MTN programme is fully drawn down, with the first repayment of RM275.0 million scheduled in December 2017, which could be rolled over under the programme.
Notwithstanding BLand’s standalone risk factors, noteholders are insulated from the downside risk related to the credit profile of BLand by the guarantees provided by Danajamin and OCBC Malaysia. Any change in the supported ratings or rating outlook would be primarily driven by changes in the credit strength of the guarantors.