E&O 3Q net profit rises 105.6% to RM63.5m on stronger property billings

PETALING JAYA (Feb 26): Eastern & Oriental Bhd (E&O) reported a 105.6% year-on-year increase in net profit attributable to owners of the parent to RM63.51 million for the third quarter ended Dec 31, 2025 (3QFY2026), compared with RM30.90 million a year earlier.

Revenue for the quarter rose 45.4% to RM243.92 million, from RM167.74 million previously, according to its filing with Bursa Malaysia today (Feb 26). Basic earnings per share improved to 2.55 sen, from 1.39 sen a year ago.

Operational performance and forex impact Profit before tax for the quarter increased to RM85.97 million, compared with RM45.54 million in 3QFY2025. The quarter included an unrealised foreign exchange loss of RM26.91 million, as disclosed under additional income statement notes. Excluding this non-cash item, profit before tax would have been higher, reflecting stronger operating performance from the property segment.

For the nine months ended Dec 31, 2025 (9MFY2026), the group recorded:

*Revenue of RM631.79 million (9MFY2025: RM504.43 million)

*Profit before tax of RM220.44 million (9MFY2025: RM144.46 million)

*Net profit attributable to owners of RM159.17 million (9MFY2025: RM98.80 million)

Property segment drives growth The properties segment remained the primary earnings contributor. For 9MFY2026, the segment recorded:

*Revenue of RM547.64 million, up 29.5% from RM422.91 million

*Operating profit of RM207.05 million, compared with RM145.69 million previously

The increase was mainly attributed to higher revenue recognition from ongoing projects including Fera, Senna Phases 1 and 2, The Lume and Arica, as well as contributions from newer launches such as Maris, Senna Phases 3 and 4, and Laman Embun in Elmina West. E&O also noted that Avea on Andaman Island (a premier reclaimed island development in Penang) and Seri Embun in Elmina received encouraging market response during the period.

Infrastructure catalyst: Gurney Bridge In December, the group commemorated the opening of the Gurney Bridge, an eight-lane link connecting Andaman Island to Gurney Drive. According to the company, the bridge enhances accessibility between the island and Penang’s established commercial and tourist belt, with travel time reduced to approximately five minutes.

Current launches on Andaman Island are achieving indicative pricing of RM900 to RM1,000 psf, based on company disclosures.

Analyst commentary and valuation Institutional research houses have noted that E&O’s pivot toward high-margin luxury developments on Andaman Island is a primary driver for its current valuation recovery. Analysts highlight that the 50.5% gross profit margin achieved this quarter provides a significant buffer against sector-wide inflationary pressures.

Hospitality and investments The hospitality segment recorded revenue of RM79.54 million for 9MFY2026, marginally higher than RM76.63 million previously. Operating profit eased slightly to RM16.60 million from RM18.21 million, mainly due to higher operating costs. The investments and others segment returned to an operating profit of RM1.47 million, compared with an operating loss of RM13.83 million in the preceding year, supported by lower foreign exchange losses and higher interest income.

Balance sheet position As at Dec 31, 2025:

*Total assets stood at RM4.58 billion; total liabilities were RM2.24 billion.

*Net assets attributable to owners of the parent were RM2.32 billion.

*Net assets per share attributable to owners improved to RM1, from RM0.93 as at March 31, 2025.

Cash and bank balances amounted to RM431.24 million, while total borrowings stood at RM2.25 billion, comprising RM579.20 million in short-term facilities and RM1.67 billion in long-term loans.

Dividend: The board declared an interim dividend of one sen per ordinary share for the financial year ending March 31, 2026. The entitlement and payment dates will be announced in due course.

Corporate proposal: On Aug 20, 2025, an indirect wholly owned subsidiary entered into a sale and purchase agreement for the disposal of two freehold land parcels in London for a minimum consideration of £75 million (approximately RM427.8 million). The disposal has not been completed as at Feb 19, 2026.

Editor's note: E&O shares last traded at 72.5 sen on Feb 26, giving the stock a price-to-book ratio of approximately 0.73 times based on its latest net asset value per share of RM1.

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