KUALA LUMPUR (Aug 23): Premier lifestyle property developer Eastern & Oriental Bhd (E&O) anticipates an improvement in earnings in the coming quarters, driven by its encouraging sales performance and a stable market environment.

Speaking at a media and analysts' results briefing on Wednesday (Aug 23), E&O managing director Kok Tuck Cheong said that Malaysia's property market is anticipated to improve — especially in strategic locations — which bodes well for the group's outlook.

“The tourism sector is also witnessing a steady recovery driven by the rise in demand for hotel bookings. As such, we are cautiously optimistic that we will be able to execute our plans and strategies to bring the group to greater heights,” Kok said.

As at first quarter ended June 30, 2023 (1QFY2024), the company’s property sales stood at RM269.2 million — 74% of the total coming from Penang, 13% from Johor and 12% from Klang Valley; unbilled sales stood at RM999.3 million.

“We are pleased with the promising results to commence the beginning of our financial year. The visible strong take-up rates of our two newly launched properties at the Andaman Island [in Penang], namely The Meg and Arica reflect our track record and market recognition as a lifestyle developer,” he said.

Likewise, he noted that the group’s hotels in Malaysia and London are also experiencing higher occupancy rates, coupled with higher demand for banqueting services for corporate and private events.

In 1QFY2024, E&O posted a net profit of RM32.95 million against a net loss of RM1.65 million a year ago, on the back of improved revenue. Its quarterly revenue rose 11.5% to RM85.4 million, versus RM76.6 million previously.

The group attributed the improved earnings to the increase in revenue of RM3.6 million from the property segment and RM5 million from the hospitality segment.

At present, the company has five ongoing projects with a total gross development value (GDV) of RM2.5 billion. The projects consist of The Meg and Arica in Andaman Island Phase 1, Conlay and The Peak in Kuala Lumpur and Avira in Johor Bahru.

No dividend plans this year

E&O executive chairman Datuk Tee Eng Ho said that the group has no plans to pay out any dividend this year as it plans to focus on the land reclamation of Andaman Island in Penang.

“I don’t think [there'll be dividends] this financial year because a lot of funds are going to the reclamation [of Andaman Island],” Tee, who controls 48.38% of the company, said.

Currently, the cost of land reclamation for Andaman Island Phase 1 stands at RM1 billion, while infrastructure construction cost is about RM500 million.

The last time E&O declared a dividend was in FY2020, with the first and final single-tier dividend of one sen per share amounting to RM14.3 million.

At 4.44pm, shares of E&O were 3.5 sen or 8.43% higher at 45 sen, which translates into a market capitalisation of RM700.83 million

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