E&O back in the black in 4Q; STP2A on track to complete in 2H18

KUALA LUMPUR (May 24): Property developer Eastern & Oriental Bhd (E&O) returned to the black in the fourth quarter ended March 31, 2017 (4QFY17), posting a net profit of RM49.44 million or 3.93 sen per share, compared with a net loss of RM14.4 million or 1.15 sen loss per share a year ago, driven by its property segment.

Quarterly revenue grew 45.9% to RM218.86 million, from RM150 million in 4QFY16.

For the full financial year ended March 31, 2017 (FY17), E&O saw its net profit jump 2.35 times to RM87.58 million, from RM37.19 million in FY16, while revenue rose 66.9% to RM704.76 million, from RM422.18 million the previous year.

In a statement yesterday, E&O group managing director Kok Tuck Cheong attributed increase in FY17 revenue to the property segment, which saw higher revenue recognition from its ongoing projects such as The Tamarind, Amaris Terraces and Andorra Skyloft Terraces in Seri Tanjung Pinang (STP), Penang, as well as improved sales of completed properties like the Princes House project in London and Andaman Condominiums in STP.

The property segment registered an increase of RM291.201 million and contributed to an increase in operating profit of RM91.466 million.

On current year prospects, E&O said it is expecting property sales to 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 our sought-after location and limited supply.

"The construction progress of Tamarind Executive Apartments is on schedule and provides steady revenue and profit recognition to the group. Going forward, we will monitor market conditions to time our future launches of suitable types of development units," it added.

Kok said reclamation works for Phase 2A of STP2 (STP2A) continue to gain momentum, with completion targeted for the second half of 2018. STP2 is a catalyst reclamation project carried out by E&O’s subsidiary, Tanjung Pinang Development Sdn Bhd, in Penang.
 
“STP2A [has] an estimated RM20 billion gross development value and expected 15-year development horizon will fuel the next level of growth for the E&O group,” he added.

E&O shares closed one sen or 0.54% lower at RM1.84 yesterday, bringing it to a market capitalisation of RM2.43 billion. — theedgemarkets.com

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