E&O’s 4Q profit doubles, proposes stock dividend

KUALA LUMPUR (May 25): Eastern & Oriental Bhd’s net profit for its fourth quarter of its 2015 financial year has doubled to RM100.76 million from RM50.5 million in its previous corresponding quarter due to substantial divestment gains. Its revenue, however, declined nearly 38% to RM143.04 million from RM229.69 million a year ago.

In terms of cumulative net profit for the full financial year ended March 31 (FY15), the property group saw a 34.5% growth to RM152.35 million from RM113.24 million in FY14. However, its annual revenue was 9.6% lower at RM449.5 million against RM497.14 million in FY14.

In a filing to Bursa Malaysia today, E&O said that its rise in the four quarter’s profit was driven by its investments and others segment.

“The increase in operating profit in the current financial year is mainly due to a gain of RM100.533 million recognised during the current quarter, comprising a gain of RM56.242 million on the disposal of 49% equity interest and gain of RM44.3 million on re-measurement of remaining 51% equity interest retained in Patsawan Properties Sdn Bhd.”

Following strong results for FY15, the group is proposing to grant its shareholders dividends in the form of stocks at the ration of one stock for every 50 units held, as payment of a first and final single tier dividend. The dividend per stock unit is estimated to be equivalent to 3.8 sen per stock unit, which would be the highest net dividend pay-out by E&O to date, said the group in a statement today.

Moving forward, E&O expects to perform positively, and will continue to increase its efforts to explore new marketing channels and develop new market strategies despite a challenging market due to various cooling measures and the implementation of the goods and services tax.

“Barring any unforeseen circumstances, we expect the property market to recover and grow over the medium to long term as we roll out our new property development projects across the Kuala Lumpur City Centre, Iskandar Malaysia, Penang and London,” it said.

In a separate filing, E&O announced that the company has proposed to admit the entire Securities of E&O UK, an indirect wholly-owned subsidiary of E&O, to trading on AIM of the LSE.

The group said that the move supports its expansion strategy in the UK as well as increase brand awareness and further develop its brand equity.

“Through the proposed IPO, the E&O UK Group will be able to strengthen its financial position and raise funds for the redevelopment of its real estate assets in London, namely ESCA House, Landmark House and Thames Tower into residential and mixed-used developments, subject to obtaining the relevant planning consent.

“The listing of E&O UK will also facilitate an independent unit with a separate management team that is focused on growing the property development and investment activities of the E&O Group in the UK,” it said.

E&O share price dropped 3.68% or seven sen lower at RM1.83 today for a market capitalisation of RM2.22 billion, with some 2.76 million shares changing hands.