CHALLENGING market conditions caused by the Covid-19 pandemic disrupted operations of the Eastern & Oriental Bhd (E&O) property development, property investment and hospitality divisions, leading to a lower revenue recognition across the board.
Its first quarter ended June 30, 2020 (1Q20) recorded an over-halved revenue of RM70.1 mil against last year’s RM134.5 mil and a net loss of -RM3.32 mil versus 1Q19’s net profit of RM1.7 mil.
According to a press statement by the group on Sept 15, 2020, the decline was due to the property development division that was affected by the closure of all sales galleries as well as travel restrictions to and from key markets.
Similarly, the E&O Hotel was hit by the movement control order (MCO) and international bans.
“Particularly in such challenging times, the Group recognises the need to be agile, relevant and responsive to changing conditions,” E&O managing director Kok Tuck Cheong said in the press statement.
“With this mindset, we achieved sales of RM494.8 mil in FY20, compared to RM330.8 mil over the same corresponding period. Over 60% of inventory sales are attributed to completed properties in Seri Tanjung Pinang Phase 1 (STP1), widely acknowledged as the premier residential development in Penang,” he added.
Moving forward, E&O plans to put more focus on Seri Tanjung Pinang Phase 2A (STP2A), an integrated master-planned development that is set to be the new benchmark destination and pulse of Penang.
The completion of STP2A’s reclamation in Sept 2019 marked a significant milestone for the Group’s next growth trajectory with infrastructure now being laid and the maiden property launch scheduled for the second half of 2021.
As of 6pm today, E&O’s share price dropped 1.25% to 40 sen with a market capitalisation of RM575.49 mil. – Sept 17, 2020
