KUALA LUMPUR (Nov 14): Lifestyle property developer Eastern & Oriental Bhd's (E&O) net profit jumped more than 5 times to RM19.68 million in the second quarter ended Sept 30, 2017 (2QFY18), from RM3.83 million a year ago, driven by its core property segment's earnings which more than doubled during the current quarter under review.
Earnings per share rose to 1.49 sen in 2QFY18, from 0.3 sen in 2QFY17. Quarterly revenue increased 2.5 times to RM195.88 million, from RM79.28 million in 2QFY17.
For the cumulative six months (6MFY18), net profit surged 5.8 times to RM40.92 million, from RM7.07 million a year ago, as the property segment’s operating profit more than doubled to RM103.7 million, from RM51.8 million a year ago.
Revenue rose 52.2% to RM369.32 million, from RM242.59 million in 6MFY17.
In a filing with Bursa Malaysia, E&O attributed the higher 6MFY18 revenue to higher revenue recognition from ongoing projects in Seri Tanjung Pinang (STP), Penang, namely The Tamarind, the Amaris Terraces and the Ariza Seafront Terrace.
The filing said higher sales of completed properties such as the Andaman condominiums in STP and Princes House in London, also contributed to higher revenue recognition.
However, its joint venture projects such as The Mews and Avira Garden Terraces saw a lower total revenue of RM58.7 million in the 1HFY18, mainly due to the completion of Avira Garden Terraces in the previous financial year and The Mews project, which is nearing its completion.
The group’s hospitality segment however, saw a slight decline in its operating profit of RM470,000 million to RM900,000 in 1HFY18, as the segment’s revenue declined by 8.1% to RM51.1 million, with reduced revenue from its food and beverage division, following the disposal of The Delicious Group Sdn Bhd in the previous financial year.
In a separate statement, E&O managing director Kok Tuck Cheong said the positive 6MFY18 results reflects an upward trend in the group’s performance.
“We hope to sustain this performance by enhancing our sales initiatives, as well as through prudent management of our financial position,” he added.
He said the group has pared down its gearing position to 0.59 times to-date, compared with 0.73 times at the end of FY17.
In terms of upcoming projects, Kok said the group is at the planning and design stage for its project at the intersection of Jalan Conlay and Jalan Kia Peng, Kuala Lumpur, with property launch targetted for end-2018.
Kok said the group’s STP Phase 2A project is in progress, with reclamation already achieving the targeted 5m chart datum (CD) level in certain areas. He added that the application of titles for land reclaimed above 2m CD, is in progress.
E&O’s subsidiary Tanjung Pinang Development Sdn Bhd (TPD) holds the concession rights to reclaim another 760 acres off the coast of Tanjung Tokong as the second phase of its STP project. The 240-acre first phase, which has been reclaimed and is close to fully-developed, is one of Penang’s earliest masterplanned developments that has evolved into the island’s preferred residential address today.
E&O’s share price fell by 2 sen or 1.36% to close at RM1.45 today, with 503,100 shares traded, giving it a market capitalisation of RM1.92 billion. — theedgemarkets.com