E&O net profit up six-fold in Q1

PETALING JAYA: Eastern & Oriental Bhd's (E&O) net profit for the first quarter ended June 30, 2017 jumped more than six-fold to RM21.24 million from RM3.24 million a year ago, due to lower selling and marketing as well as other expenses incurred during the quarter.
In a filing with Bursa Malaysia, the group reported lower selling and marketing expenses of RM5.47 million compared with RM10.40 million a year ago. Other expenses were also lower, at RM12.62 million compared with RM26.41 million a year ago.
Revenue for the quarter rose 6.20% to RM173.44 million from RM163.31 million a year ago due to the property segment which generated RM148.89 million in revenue compared with RM137.09 million a year ago and operating profit of RM48.82 million compared with RM37.70 million a year ago.
However, its joint venture projects contributed RM1.25 million profit during the quarter, lower than the RM3.83 million achieved a year ago.
The hospitality segment recorded a lower revenue of RM23.80 million compared with RM25.62 million a year ago, due to the disposal of The Delicious Group Sdn Bhd in the previous financial year.
The segment recorded an operating profit of RM1.04 million compared with an operating loss of RM1.27 million a year ago.
The investments and others segment recorded an operating profit of RM222,000 during the quarter compared with an operating loss of RM14.49 million a year ago, due to a fair value gain on investment securities of RM3.23 million compared with a fair value loss of RM141,000 a year ago.
In addition, the strengthening of the Sterling pound against the ringgit resulted in an unrealised foreign exchange gain of RM3.10 million, compared with an unrealised foreign exchange loss of RM14.29 million a year ago.
The group attributed its overall positive performance to the property segment, which registered higher revenue recognition from ongoing projects namely The Tamarind, the Amaris Terraces and the Ariza Seafront Terrace in Seri Tanjung Pinang (STP), Penang as well as higher sales of completed properties.
"Notwithstanding the prevailing property market conditions, there has been encouraging support for our properties in STP which has buoyed the group's performance in the first quarter," managing director Kok Tuck Cheong said in a statement.
In terms of upcoming projects, he said timing is important and the group is monitoring the market closely.
On STP Phase 2A, Kok said reclamation works is progressing with more than 75% of the island being reclaimed above the two meter chart datum level, which is eligible for title application.
The group is targeting its first launch at STP Phase 2A by 2019, following completion of reclamation works which is expected in the second half of 2018.
E&O's share price fell 2.58% to close at RM1.51, with a total of 222,800 shares traded, giving it a market capitalisation of RM2.01 billion.