E&O’s 1HFY18 core net income within expectations

KUCHING: Eastern & Oriental Bhd’s (E&O) first half of financial year 2018 (1HFY18) core net income (CNI) came in line with analysts’ expectations, on the back of improved earnings.

In a filing on Bursa Malaysia, E&O posted profit before tax of RM67.09 million fo rthe six-month financial period ended September 30, 2017 as compared to profit before tax of RM17.12 million in the corresponding period of the previous year.

E&O’s 1HFY18 core net income of RM28.9 million was deemed within the research arm of MIDF Amanah Investment Bank Bhd’s ( MIDF Research) expectations despite only making up 38 per cent and 39 per cent of its and consensus full year estimates.

This is because MIDF Research expects 2HFY18 earnings to be supported by profit recognition for Seri Tanjung Pinang 2A (STP2A) land sale to the Retirement Fund Inc (KWAP).

Overall, MIDF Research maintained its positive stance on E&O due to the positive longterm prospect of STP2A.

“Reclamation works is on-track and first launch of project on STP2A is expected in mid-2019,” the research arm said.

“Meanwhile profit recognition for KWAP land sale is expected to boost earnings of E&O in FY18 and FY19.

“Besides, balance sheet of E&O has also stabilised with net gearing of 0.59x as at September 2017.”