This article first appeared in The Edge Financial Daily, on May 27, 2016.

KUALA LUMPUR: Datuk Seri Terry Tham Ka Hon, managing director (MD) and substantial shareholder of Eastern & Oriental Bhd (E&O) with an 11.05% stake, has been redesignated as executive deputy chairman effective July 1.

Tham, 63, will be replaced by Kok Tuck Cheong, 60, as MD of E&O. Kok was former chief executive officer and MD of AmInvestment Bank Bhd, a subsidiary of AMMB Holdings Bhd, serving the bank for 34 years with the last 10 years focused on strategic development and management of various businesses.

In a filing with Bursa Malaysia yesterday, E&O announced the resignation of Eric Chan Kok Leong, 46, as its board member and deputy MD, citing “expiry of contract and family reason”. Chan will be stepping down from his positions effective Aug 11.

Chan’s resignation came as a surprise to many, who was promoted to his current position in 2011. He joined E&O Property Development Bhd in 2003 as director of corporate and investment. “Since 2003, Eric [Chan] has been instrumental in steering the group’s business direction and performance. For his dedication, commitment and unwavering loyalty, the E&O board were unanimous in expressing our deep appreciation, while also respecting his wishes to take a step away from active corporate life to spend time with his family,” said Tham in a statement yesterday.

Datuk Azizan Abdul Rahman remains as the group’s chairman. Meanwhile, E&O said it achieved record property sales amounting to RM1.1 billion for the financial year ended March 31, 2016 (FY16).

Tham said E&O responded to strong headwinds experienced by the industry at large, by adopting prudent cash flow management, re-strategising and intensifying its marketing efforts, including extending its marketing reach and initiating new approaches to drive sales for its projects across Penang, Iskandar Malaysia in Johor and the Klang Valley.

This was despite the group slipping into a net loss of RM14.78 million or 1.18 sen loss per share in the fourth quarter ended March 31, 2016 (4QFY16) compared to a net profit of RM100.5 million or 8.22 sen per share a year ago, mainly due to lower revenue recognition from its property projects. 

Revenue, however, rose 4.2% to RM149.03 million in 4QFY16 from RM143.04 million in 4QFY15. The weak quarterly results dragged down its net profit for the full FY16, which dropped 75.8% to RM36.8 million from RM152.09 million in FY15. Revenue fell 6.3% to RM421.22 million from RM449.5 million.

E&O said the property segment recorded a 42.5% decline in operating profit to RM90.6 million for FY16 from RM157.48 million in FY15, due to lower revenue recognised, lower gross margin achieved and higher sales and marketing costs incurred in FY16.

The group expects improved performance and results for FY17.