E&O 1Q net profit rises 28% as property revenue surges

PETALING JAYA (Aug 24): Eastern & Oriental Bhd (E&O) posted a 27.9% year-on-year increase in net profit attributable to owners of the parent to RM58.11 million for the first quarter ended June 30, 2026 (1QFY2027), from RM45.42 million a year earlier, on higher revenue recognition from its property development projects.

Revenue rose 53.4% to RM281.47 million from RM183.51 million, while profit before tax (PBT) increased 32% to RM83.71 million from RM63.36 million. Earnings per share rose to 2.33 sen from 1.82 sen.

Group profit for the period, including non-controlling interests, grew 29.5% to RM64.90 million.

In a Bursa Malaysia filing on Monday (Aug 24), E&O said the properties segment recorded revenue of RM256.35 million, up 63.2% from RM157.06 million a year earlier, driven by higher revenue recognition from AVÉA, Fera and Senna Phases 3 and 4, Laman Embun and Seri Embun.

The segment's operating profit rose to RM83.04 million from RM57.41 million, in line with the higher revenue recognised.

Including revenue recognised from joint-venture projects Conlay and The Peak, aggregate property revenue stood at RM309.4 million, compared with RM229 million a year earlier.

Revenue contribution from the two joint-venture projects fell to RM53 million from RM71.9 million, mainly due to the absence of revenue recognition from The Peak after the project obtained its Certificate of Completion and Compliance in the quarter ended March 31, 2026.

Hospitality revenue eased 1.6% to RM24.69 million from RM25.14 million, while segment operating profit declined to RM4.37 million from RM4.85 million.

Operating profit from the investments and others segment fell to RM8.53 million from RM10.38 million, mainly due to lower management fees recognised as projects approached completion.

Property sales more than double

In a separate press release, E&O said property sales more than doubled to RM356 million during the quarter from RM153 million a year earlier, while unbilled sales increased 28.4% year-on-year to RM1.7 billion as at June 30.

The group said the unbilled sales are expected to be recognised over the next few financial years as construction progresses.

E&O managing director Kok Tuck Cheong said the group saw encouraging sales take-up from its Penang and Klang Valley offerings.

The group said its latest launch, AVÉA Phase 2, had received strong market interest, contributing to its sales momentum and unbilled sales pipeline. It is preparing to launch a waterfront serviced apartment project and landed homes towards the fourth quarter of FY2027.

E&O also highlighted its planned 240-bed multidisciplinary tertiary private hospital on Andaman Island. Its indirectly wholly owned subsidiary KCB Holdings Sdn Bhd entered into a conditional joint-venture agreement with Cengild Medical Bhd and Skyspring Sdn Bhd on June 19 for the proposed development.

The hospital is currently at the planning stage and is expected to commence operations in 2030.

Separately, KP Urban Sdn Bhd, an indirectly 66.67%-owned joint venture of E&O, entered into a sale and purchase agreement on July 31 to acquire a freehold parcel with an existing 30-storey condominium block for RM189.9 million.

E&O said the approximately 1.4-acre site, near KLCC and Pavilion Kuala Lumpur, is intended for redevelopment into luxury serviced apartments.

On a quarter-on-quarter basis, revenue increased 19.3% from RM235.85 million in 4QFY2026, while PBT rose 14.6% from RM73.02 million. E&O attributed the higher revenue mainly to greater recognition from The Meg, Arica, The Lume and Maris, as well as maiden revenue recognition from Seri Embun.

The group said it remained cautiously optimistic about its prospects in the coming quarters, while its hospitality segment is expected to maintain positive momentum supported by continuing regional travel demand.

E&O did not recommend any dividend for the quarter.

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