Friday 29 Mar 2024
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KUALA LUMPUR (Aug 21): Eastern & Oriental Bhd's (E&O) combination of RM480 million unbilled sales, and inventory of RM324 million is expected to drive its earnings for the financial years ending March 31, 2019 (FY19) and FY20, said its official.

Its corporate investment and planning senior general manager Yeow Yeonzon said E&O plans to launch projects worth RM1.5 billion in gross development value (GDV) in the next two years.

"Apart from that, we have progressive revenue recognition from the Seri Tanjung Pinang Phase 2A project, and profit from the 20% stake sale in Phase 2A development land to Pension Trust Fund Inc (KWAP).

"The Tamarind executive apartments and Ariza seafront terraces projects in Penang are slated for year-end completion, and we expect progressive billings of final payments to kick in, and we will continue to selldown non-core assets to boost cashflow as we need that for the development of STP2A," he told reporters after E&O's annual general meeting today.

Yeow said the group is looking at a minimum of RM400 million new sales in FY19, which is a 3.3% rise from RM387 million new sales that was achieved in FY18.

"We are also focused on clearing our inventory (of RM324 million), meaning those assets with higher margin (but we are) not necessarily looking at the absolute amount. There is no timeframe for the sale," he said.

Last September, E&O put up five non-core assets — Lone Pine Hotel, the Straits Quay Mall, properties in Gertak Sanggul, Kemensah Heights, The Peak, and the retail space of its 80%-tenanted St Mary project — for sale.

Yesterday, E&O announced that its net profit for the first quarter of its financial year 2019 (1QFY19) fell 34% from a year ago, despite a 15% rise in revenue, as it was impacted by unrealised foreign exchange (forex) losses and losses from joint ventures (JVs).

Net profit for 1QFY19 declined to RM14.12 million from RM21.24 million, even as revenue rose to RM199.99 million from RM173.44 million, on stronger property segment turnover.

It recorded forex losses of RM8.88 million in investments and others segments during the quarter, while its share of losses from JVs totalled RM5.12 million.

Yeow said the share of losses from the JV came from its Avira Garden Terraces project in Medini Iskandar, Johor due to timing, as it is currently operationalising the second phase of the project where it incurred high expenses that could not be capitalised.

Moving forward, managing director Kok Tuck Cheong said the overall property market is not 'exactly a walk in the park' but was glad that its inventories that were completed some time ago were more affordable than its competitors'.

"So, we can be aggressive with the pricing but we are careful to make sure we have some sense of responsibility to our buyers," he said.

On its London property venture where it has three projects, Kok said the market remains uncertain because of Brexit, thus there would be no further investments in London for the moment.

"We could revisit this (segment) when the opportune time comes up (but) for now (it is) no," he added.

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