E&O’s Q2 earnings surge on higher operating profit

PETALING JAYA: Eastern & Oriental Bhd’s (E&O) net profit for the second quarter ended Sept 30, 2017 grew fivefold to RM19.68 million from RM3.83 million a year ago due to higher operating profit from the property segment on the back of higher revenue recognised.

In a filing with Bursa Malaysia yesterday, the group said the higher operating profit was also due to steady progress in construction from ongoing projects. Operating profit for the quarter stood at RM46.29 million compared with RM8.15 million a year ago.

Revenue for the quarter more than doubled to RM195.88 million from RM79.28 million a year ago mainly due to higher revenue contribution from the property segment as a result of higher revenue recognition from ongoing projects and higher sales of completed properties.

For the six months ended Sept 30, 2017, net profit grew almost sixfold to RM40.92 million from RM7.07 million a year ago while revenue rose 52.24% to RM369.32 million from RM242.59 million a year ago.

“Our positive results for the first half of financial year 2018 reflects an upward trend in our performance shown also by our first quarter results. We hope to sustain this performance by enhancing our sales initiatives as well as through prudent management of our financial position,” managing director Kok Tuck Cheong said in a statement yesterday.

Commenting on upcoming projects, Kok said the group is at the planning and design stage for its project at the intersection of Jalan Conlay and Jalan Kia Peng, with a target set to launch by end of 2018.

Meanwhile, the Seri Tanjung Pinang Phase 2A project off the northeast coast of Penang is in progress with reclamation already achieving the targeted five metres chart datum (CD) level in certain areas. The application of titles for land reclaimed above two metres CD is in progress.

E&O’s share price fell 1.36% or 2 sen to close at RM1.45 yesterday with a total of 503,100 shares traded, giving it a market capitalisation of RM1.91 billion.