E&O's 3Q net profit multiplies eightfold, 9M net profit down 26%

KUALA LUMPUR (Feb 24): Eastern & Oriental Bhd (E&O)’s net profit multiplied eightfold to RM31.07 million or 2.47 sen per share for the third quarter ended Dec 31, 2016 (3QFY2017), from RM3.88 million or 0.31 sen per share a year earlier.

Revenue soared 107% to RM243.32 million, from RM117.59 million in 3QFY2016.

For the cumulative nine months period (9MFY2017), net profit fell 26% to RM38.14 million, from RM51.59 million in the previous comparative period (9MFY2015), despite recording a top line jump of 79% to RM485.9 million, from RM272.18 million.

The group attributed the improvement in revenue for the period to its property segment, which registered an increase of RM217.38 million.

“The increase in revenue was mainly due to higher revenue recognition from the ongoing projects, namely The Tamarind, the Amaris Terraces and the low medium cost apartments in Seri Tanjung Pinang (STP) and from the Princes House project in UK, which has been completed in this financial period,” said E&O.

However, improvement in the property division was dragged by investments and others division, which recorded an operating loss of RM28.53 million for the cumulative period.

The group said the division was impacted by the exchange rate volatility of the sterling pound, leading to an unrealised foreign exchange loss of RM6.92 million, compared with an unrealised foreign exchange gain of RM42.91 million a year earlier.

“Market conditions continue to be challenging consistent with subdued retail sales performance. For the current year, we are expecting that property sales in the final quarter will remain weak.

“We continue to be cautious in our launches, while take-up rate of our remaining landed properties in STP is encouraging, due to sought after location and limited supply.

“The construction progress of Tamarind Executive Apartments (94% of 1104 units sold) is on schedule and provides steady revenue/profit recognition to the group. Going forward, we will monitor market conditions to time our future launches of suitable types of development units,” said the group in its prospects.

E&O’s share price closed up 9 sen or 4.86% at RM1.94 yesterday, giving it a market capitalisation of RM2.34 billion. — theedgemarkets.com

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