E&O posts jump in 2Q net profit to RM29.73mil

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) says the property market is showing promising signs of growth, leading to cautious optimism that it will bolster group earnings.

The improvement is seen not only in Penang, but from the sales of the property developer’s developments located in prime areas such as Damansara Heights in Kuala Lumpur, and Johor Bahru, said managing director Kok Tuck Cheong in a statement.

For the second quarter of the group’s 2024 financial year (FY24), Kok said the group’s financial performance came in line with its expectations.

The group’s net profit surged to RM29.73mil from just RM16,000 in the year-ago quarter, bringing basic earnings per share to 1.83 sen.

It said the jump in performance was owing to the enhanced revenue and absence of unrealised foreign exchange loss of RM19.9mil recognised in 2QFY23.

Meanwhile, revenue rose 30.4% year-on-year to RM123.86mil from RM95.02mil in the year-ago quarter with improved contributions from both its business segments.

E&O’s properties segment delivered a 35% higher revenue of RM71.4mil during the quarter due to higher sales of its ongoing project, Arica@Andaman, as well as its joint venture projects Conlay, The Peak and Avira Garden Terraces.

“The encouraging sales from Arica not only indicate our understanding to deliver and cater to the demand of today’s property buyers, but also stand to support our larger ambitions and strategies of creating a sustainable population of the Andaman Island in the long run.

“With this said, we are currently working on our up-and-coming landed homes in Andaman, which is expected to be launched in the fourth quarter of financial year 2024, with anticipation that the positive responses received from our Andaman sales will continue,” said Kok.

In the hospitality segment, revenue increased 15.8% to RM26mil, attributed to higher average room rate and occupancy rate achieved by Eastern & Oriental Hotel (Penang) and E&O Residences (Kuala Lumpur), in the current quarter under review.

For the six months period to Sept 30, 2023, E&O posted a net profit of RM62.69mil, which was a notable improvement from a net loss of RM1.63mil in 6MFY23.

The group’s revenue grew to RM209.28mil during the first half of FY24, from RM171.57mil in the previous comparative period.