KUALA LUMPUR (May 26): Eastern & Oriental Bhd (E&O) said it achieved record property sales amounting to RM1.1 billion for the financial year ended March 31, 2016 (FY16).
Its managing director Datuk Seri Terry Tham Ka Hon said the lifestyle property developer responded to strong headwinds experienced by the industry at large, by adopting prudent cashflow management, restrategising 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 year (FY16), which dropped 75.8% to RM36.8 million from RM152.09 million in FY15. Revenue also fell 6.3% to RM421.22 million from RM449.5 million, mainly due to lower revenue from its property segment.
In a filing with Bursa Malaysia today, E&O said the property segment recorded a 42.47% 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 the current financial year.
E&O said continued global uncertainties, both in the economic and geopolitical spheres, have weighed negatively on an already softening property development landscape in Malaysia.
"Strong headwinds for the industry are expected to remain for the foreseeable future, compounded by the current local environment of loan restrictions while buyers adopt a wait-and-see stance. Accordingly, the group is maintaining a cautious stance," it added.
Nevertheless, the group expects improved performance and results for FY17.
E&O shares closed unchanged at RM1.55 today, for a market value of RM1.94 billion.