KUALA LUMPUR (Aug 25): Eastern & Oriental Bhd (E&O) posted an 86.1% drop in net profit for the first quarter ended June 30, 2016 (1QFY17) to RM3.24 million or 0.26 sen per share from RM23.26 million or 1.9 sen per share, as it recognised a RM20.27 million disposal gain last year.

"The higher operating profit in the property segment also cushioned the impact of the unrealised foreign exchange loss of RM14.249 million in the investment segment for the current quarter," it added.

In a filing with Bursa Malaysia today, the property developer said its revenue for the quarter surged 137.1% to RM163.31 million versus RM68.89 million previously, boosted by its property segment.

No dividend was declared during the quarter.

Despite a protracted soft property market, E&O said its unbilled sales of RM1.03 billion will anchor the earnings for the next two financial years.

"We continue to sell our completed units and selectively launch new projects which are suited to the current market environment," it added.

With the reduction of overnight policy rate which results in lower borrowing costs to consumers, the group expects the demand for properties to gradually improve.

"Nonetheless, we remain cautious on the recovery of the property market," it added.

Shares in E&O closed up one sen or 0.6% to RM1.69, giving it a market capitalisation of RM2.13 billion. — theedgemarkets.com

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