Thursday 28 Mar 2024
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KUALA LUMPUR (May 25): Property developer Eastern & Oriental Bhd's (E&O) net profit fell 21.8% to RM37.9 million in the fourth financial quarter ended March 31, 2018 (4QFY18) from RM48.46 million a year ago, due to higher income tax expenses of RM24 million in the current quarter under review versus RM8.57 million in 4QFY17.

In a statement today, E&O said the higher income tax expenses were attributed to higher revenue achieved in contrast to the occurrence of higher non-taxable income items in 4QFY17.

This resulted in lower earnings per share of 2.91 sen for 4QFY18 compared with 3.85 sen for 4QFY17.

Quarterly revenue, however, was up 28% to RM280.05 million in 4QFY18 from RM218.86 million a year ago.

The group is proposing a first and final dividend via distribution of treasury stock units on the basis of one stock unit for every 50 existing stock units held in the group for the financial year ended March 31, 2018 (FY18), which is equivalent to a 3 sen distribution per stock unit.

"This proposal will be put up for stockholders' approval at the forthcoming annual general meeting while the entitlement date and payment date will be announced later," it said in a separate statement.

For FY18, the group's net profit rose 16.4% to RM100.79 million from RM86.6 million in the previous year, while revenue grew 39.2% to RM981.27 million from RM704.76 million in FY17.

E&O attributed the improved FY18 performance to the group's property segment, which generated higher operating profit on the back of higher revenue recognised from the sale of completed properties, as well as the maiden revenue recognition from the sale of 20% reclaimed land in Seri Tanjung Pinang Phase 2A project (STP2A) in Penang to Kumpulan Wang Persaraan (Diperbadankan).

"Additionally, the group's hospitality segment contributed higher profit following the disposal of E&O Express Sdn Bhd, the entity which owns the Lone Pine Hotel in Penang," it said.

On prospects, E&O said with the conclusion of the 14th general election, it believes the policies driving economic growth will become clearer over the next few months.

"We are of the opinion that house buyers who were holding back from buying will be in the market to purchase their homes. Properties in strategic locations by reputable developers will possess an advantage and sustain buyer interest.

"In our view, E&O Group is well positioned to tap onto the opportunities when the market recovers as the reclamation of STP2A will be completed soon," it added.

E&O managing director Kok Tuck Cheong said the STP2A project is progressing well and will continue to contribute positively to the group's profit based on progressive work done. Most recently, the land titles to the 253 acres of reclaimed land at STP2A have been issued by the authorities.

The group is targeting to launch several new projects in the next 12 months. These include 503 units of serviced apartments at the intersection of Jalan Conlay and Jalan Kia Peng here, with an estimated gross development value (GDV) of RM880 million.

At a 3.8-acre site in Damansara Heights, The Peak residential development is being planned for launch with an estimated GDV of RM278 million.

"In addition to targeted launches of E&O-signature developments in the Kuala Lumpur city centre, we will also be channelling our resources towards a much-anticipated maiden launch at STP2A in the first half of 2019," Kok added.

E&O shares closed up one sen or 0.65% to RM1.55 today, for a market capitalisation of RM2.01 billion.

 

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