Duty Free International Limited Announces Termination of Tenancy and Cessation of Operations at Berjaya Waterfront Johor Bahru

Key Points of the Announcement

• Termination of Tenancy Agreement: Duty Free International Limited (“DFI”) has announced that its subsidiary, Selasih Ekslusif Sdn Bhd (“Selasih”), will cease duty-free business operations at Berjaya Waterfront Johor Bahru. Selasih has issued a notice to terminate its Tenancy Agreement with Berjaya Waterfront Sdn Bhd (“Berjaya”), the landlord, with immediate effect.
• Reason for Termination: The cessation is due to Majlis Bandaraya Johor Bahru (“MBJB”) declining to renew Selasih’s business licences, despite repeated efforts from Selasih. Without these licences, Selasih is unable to lawfully operate its core duty-free business at the complex.
• Legal Advice Received: After seeking legal counsel, Selasih exercised its contractual right to terminate the tenancy, citing the non-renewal of business licences as rendering their operations untenable.
• Financial Impact: According to the audited consolidated financial statements for the year ended 28 February 2025, Selasih contributed approximately 38.6% of DFI Group’s revenue and 4.6% of its profit after tax.
• Exceptional Net Gain: The Group expects to record a one-off exceptional net gain after tax of about RM17 million, mainly from derecognition of lease, asset write-offs, write-down of inventories, and staff retrenchment costs. These figures are still under review and may be subject to change.
• Negotiation Attempts: Selasih attempted to negotiate with Berjaya for a mutually agreeable termination but no consensus was reached. The termination notice was issued after obtaining legal advice.
• Awaiting Landlord’s Response: At the time of the announcement, Berjaya has not responded to Selasih’s notice to terminate the tenancy.
• Further Announcements: DFI has indicated that further updates will be provided as additional information becomes available or if there are material developments.

Important Information for Shareholders and Potential Investors

• This termination is potentially price-sensitive for several reasons:
  • Loss of a significant revenue contributor (Selasih accounted for nearly two-fifths of group revenue).
  • Reduction in profit after tax, as Selasih contributed 4.6%.
  • Potential for exceptional net gain (RM17 million), which may affect reported profit figures in the upcoming period.
  • The uncertainty regarding the landlord’s response and the final terms of termination may introduce further risks or benefits to the Group.
• Shareholders and investors are strongly advised to exercise caution when dealing in DFI’s securities until further clarity is provided.
• Any change in Selasih’s business operations or further financial impacts may have direct implications for the Company’s share price.

Additional Details

• Termination Effective Date: The tenancy termination is effective from 19 February 2026.
• Nature of Gain: The RM17 million net gain relates to derecognition of lease liabilities, together with costs for asset write-offs, inventory write-downs, and staff retrenchment.
• Ongoing Review: The financial figures associated with the termination and cessation are still being reviewed and quantified, so final numbers may differ.
• Official Statement: The announcement was made by Datuk Lee Kok Khee, Group Chief Executive Officer, on 19 February 2026.

Disclaimer

This article is for informational purposes only and should not be construed as investment advice. Shareholders and potential investors are advised to read all official Duty Free International Limited announcements carefully, and consult their stockbrokers, bank managers, solicitors, or other professional advisors if they are in doubt about the action they should take. The information presented here may be subject to change as further details are released by the company.

View Duty Free Intl Historical chart here