E&O posts lower 1Q net profit as forex, JV losses weigh

KUALA LUMPUR (Aug 21): Eastern and Oriental Bhd (E&O)’s net profit for the first quarter of its financial year 2019 (1QFY19) fell 34% from a year ago, despite a 15% rise in revenue, as it was impacted by unrealised foreign exchange losses and losses from joint ventures (JVs). 

Net profit for the quarter ended June 30, 2018 (1QFY19) declined to RM14.12 million from RM21.24 million, even as revenue rose to RM199.99 million from RM173.44 million, on stronger property segment turnover, it said in a filing with Bursa Malaysia yesterday. 

It recorded forex losses of RM8.88 million in investments and others segments during the quarter, while its share of losses from JVs totalled RM5.12 million. 

Consequently, earnings per share for 1QFY19 retreated to 1.09 sen, from 1.66 sen a year ago. 

Going forward, E&O said outlook for the property sector remains challenging with continuing tight mortgage financing, coupled with other global uncertainties.

“We believe that properties in strategic locations by reputable developers will possess an advantage and sustain buyer interest through property cycles,” the filing added.

For 2018/19, the group expects to launch two E&O-signature developments in Kuala Lumpur.

“With the impending launches, we are well positioned to capitalise on opportunities when the overall market uptrend crystalises, meaning we continuously review the value proposition of our products and marketing strategies, while maintaining a pulse on the evolving market,” it said.

E&O shares dipped three sen or 1.94% to close at RM1.52 yesterday, for a market capitalisation of RM1.97 billion. — theedgemarkets.com

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