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E&O swings back to profit in 3QFY20, eyes to launch properties worth RM1.3b in GDV

KUALA LUMPUR (Feb 18): Eastern & Oriental Bhd (E&O), which aims to launch properties worth RM1.3 billion in gross development value (GDV) this year, swung back to profit in its third financial quarter ended Dec 31, 2019 (3QFY20), thanks to an unrealised foreign exchange (forex) gain of RM23.1 million during the current quarter compared with an unrealised forex loss of RM9.2 million in 3QFY19.

The property developer posted a net profit of RM18.76 million in 3QFY20 compared with a net loss of RM8.76 million a year ago. As a result, it recorded an earnings per share of 1.31 sen for 3QFY20 from a loss per share of 0.67 sen for 3QFY19.

Revenue for the quarter, however, fell 53.6% to RM119.15 million from RM256.95 million a year ago due to lower revenue recognised by its property and hospitality segments.

Net profit for the cumulative nine months (9MFY20) was down by 65.9% to RM8.09 million from RM23.7 million in 9MFY19, while revenue declined 38.6% to RM390.57 million in 9MFY20 from RM636.34 million a year ago.
 
In a bourse filing today, E&O said the property segment saw a 40.4% decline in revenue to RM339.4 million in 9MFY20 from RM569.5 million a year ago, mainly due to lower revenue recognition from development projects in Seri Tanjung Pinang 1, Penang.

The hospitality segment also recorded lower revenue of RM47.3 million for 9MFY20, down 27.1% from RM64.9 million a year ago, mainly due to the temporary closure of the Heritage Wing of E&O Hotel from March to December last year for refurbishment.

On prospects, E&O said with the property market remaining subdued, it is expecting slower property sales in the near term from both the local and foreign markets.

“Moving forward, our sales and marketing efforts are focused on Conlay serviced residences centrally located in Kuala Lumpur City Centre. This iconic development with a GDV of RM968 million marks our second joint-venture (JV) residential development with Japan's Mitsui Fudosan Group. We are currently previewing the first phase of 297 units and have garnered interest from both the local and international market," E&O managing director Kok Tuck Cheong said in a separate statement.

Its third JV with Mitsui will see the development of 3.94 acres of land in Damansara Heights, comprising low-rise condominium-villas totalling 54 units with a GDV of RM348 million. The development is slated for launch in the second half of 2020.

Meanwhile, E&O said the recent coronavirus outbreak has adversely impacted its hotel occupancy at E&O Hotel. "However, the unique hotel offerings and experience will position it well in the longer term," it added.

At 2.13pm, E&O shares were down 0.5 sen or 0.88% at 56 sen, with 363,400 shares done, bringing it a market capitalisation of RM815.89 million.

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