KUALA LUMPUR: Lifestyle property developer Eastern & Oriental Bhd
’s earnings rose 22.6% to RM23.26mil in the first quarter ended June 30, 2015 from RM18.96mil a year ago boosted by share of results of an associate.
It announced on Monday its revenue was lower at RM68.89mil compared with 129.74mil a year ago. Earnings per share were 1.90 sen compared with 1.56 sen.
“The property segment recorded a revenue of RM41.95mil in the Q1 compared to RM102.71mil a year ago, down RM60.75mil or 59.1%.
“The decrease in revenue is due to lower revenue recognition following the completion of two blocks of the Quayside Andaman Condominium in Seri Tanjung Pinang in the previous financial year,” it said.
E&O said although, sales from the newly launched project, the Tamarind has been encouraging, its contribution is minimal as the construction work is at their early stages of development.
“The joint venture projects, namely The Mews and Avira Garden Terraces contributed a total revenue of
RM49.96mil in Q1 versus the total revenue of RM14.76mil a year ago,” it said.
E&O said the higher revenue was due to higher percentage recognition from the current locked-in sales, steady development progress and new sales during the financial quarter.
As for the hospitality segment, there was negligible fluctuation in its revenue by recording a revenue of RM26.15mil in Q1 compared to RM26.51mil a year ago. The division reported an operating profit of RM72,000 in Q1 versus RM82,000 a year ago.
E&O said that an agile and flexible stance is imperative to rise above the current challenging market conditions.
“The property market is cyclical and E&O has demonstrated its resilience in successfully weathering past dips in the cycle.
"Operating with a mid- to long-term line of sight we strive to consistently ensure that the Group is well prepared to adapt to changing market conditions, be it an upward or downward trend,” said E&O deputy managing director, Eric Chan Kok Leong.
Chan said that while property development is the main contributor to the group’s performance, the quarter under review saw the company tapping on its supporting pillar of property investment and profitably disposed of a long-held landbank along Jalan Sungai Besi.
“Most importantly, our prudent management of the market impact enables us to continue driving our priorities in our core of property development whilst keeping a keen eye on the target for our catalyst project, Seri Tanjung Pinang Phase 2 (STP2),” said Chan.
Looking ahead, Chan said “We expect our new and upcoming launches to buttress the Group's earnings in the subsequent financial quarters.”
E&O successfully launched its first executive apartments The Tamarind in Penang in early 2015 and with 90% of the units taken up to-date, the developer is working towards releasing the second tower in the second half of the year.
The group’s joint-venture project with Khazanah Nasional Berhad and Temasek Holding Pte Ltd, Avira in Iskandar Medini, had also taken off with the first phase of its Garden Terraces 90% sold and the second phase targeted for launch soon.
The upcoming condominium project on Jalan Conlay in Kuala Lumpur city centre, a collaboration with Mitsui Fudosan Co Ltd, is at the planning stage and slated for launch in early 2016.
Its STP2 project is on track and that negotiations to secure the reclamation contractor are already at the advanced stages.
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