from left: Eastern & Oriental Bhd finance director Kok Meng Chow, managing director Kok Tuck Cheong, and general manager of corporate investment and planning Yeonzon Yeow.

KUALA LUMPUR: Following the group’s 92nd annual general meeting, Eastern & Oriental Bhd (E&O) announced its financial year ended 31 March 2019 (FY19) achievements whilst underpinning its commitment to continued long term value creation. 

The group reported revenue of RM886.32mil and profit after tax (PAT) of RM76.36mil in FY19, compared to revenue of RM982.71mil and PAT of RM109.82mil for the corresponding period last year. The operating profit in FY19 was dampened by a one-off holding costs payable of RM44.57mil in respect of the non-exercise of an option for the acquisition of a parcel of land.

Lower revenue was mainly attributed to the property segment which registered a revenue of RM798.93mil and the hospitality segment which registered a revenue of RM84.35mil. This was due to lower revenue recognition for reclaimed land in Seri Tanjung Pinang Phase 2A (STP2A), lower sales of completed properties in Seri Tanjung Pinang Phase one (STP1) and in Princes House, London.

The hospitality segment’s drop in revenue was mainly due to lower occupancy rate, as well as lower revenue recognised following the disposal of E&O Express Sdn Bhd (EOE), a subsidiary company which owned the Lone Pine Hotel. The disposal of EOE was completed  in the previous financial year. 

FY19 sales were led by our properties in STP1 in Penang island. These include the completion and vacant possession of the final phase of Ariza Seafront Terraces comprising 35 units of elegant 2 1⁄2 storey, freehold terraced homes and sales of the remaining units of the completed Andaman tower, the final phase within Quayside Seafront Condominiums. 

The Tamarind, the group’s first executive apartments launched in 2015, achieved 100% take-up rate recording revenue of RM297.34mil for FY19 while realising a total GDV of RM960.82mil. The success of The Tamarind is a reflection of the market’s trust in E&O’s reputation of delivering developments that are functionally designed, aesthetically pleasing and make for prime investment choices.

 Shareholders were also updated of the net gearing ratio of the group as at 31 March 2019 which was 0.28 times as compared to 0.61 times as at 31 March 2018. It was further reported that as at 30 June 2019, the group’s net gearing ratio was at an improved position of 0.25 times. 

This positive development is credited to the completion of Ariza Seafront Terraces and The Tamarind developments in STP1 and RM127.63mil proceeds from the group’s private placement exercise in March 2019.

Commenting on this development, Kok said the group is focused on laying the groundwork for its next growth trajectory. With completion of the Equity Fund Raising, proceeds will be utilised largely towards the implementation of projects namely the infrastructure and development works at STP2A.

“Reclamation works are set to complete in September 2019 while infrastructure works have started to take shape with the building of the first vehicular bridge linking to the new island,” said Kok, adding that the STP2A presents a unique and significant opportunity where E&O is now on the cusp of unveiling what will be the new landmark of Penang. For FY19, E&O obtained shareholders’ approval for a first and final dividend of three sen per stock unit held in the company for the financial year ended 31 March 2019.