KUALA LUMPUR: Eastern and Oriental Bhd
(E&O) maintains cautious optimism in hitting its sales target of RM500mil for the financial year ending March 31, 2024 (FY24) and close to RM1bil in FY25.
This will be backed by sustained sales from its current offerings, unbilled sales of RM1.13bil that will be progressively recognised from FY24 to FY26, as well as new launches in the Andaman Island phase one development.
Executive chairman Datuk Tee Eng Ho said the developer has already achieved RM451.2mil in sales for the first half of 2024, namely from projects like the Arica (RM305.4mil), The Meg (RM6.5mil), Conlay (RM26.7mil), The Peak (RM47.2mil) and Avira (RM65.7mil).
“For the rest of the year, we do not have much to sell. The Meg is completely sold out and sales for The Peak have reached about 70%. Meanwhile, Avira and Arica are nearly 90% sold and Conlay has achieved around 40% in sales.
“Hence by the time we end FY24, hitting RM500mil is a realistic target.
“If Conlay can continue the momentum, then there is plenty of headroom,” he said during the second quarter ended Sept 30, 2023 (2Q24) results briefing yesterday.
Managing director Kok Tuck Cheong said the two launches introduced to the market in the past 18 months, namely The Meg and Arica, in the Andaman Island phase one development have provided strong encouragement to the group.
“The launches are a very strong accolade and reflection on the depth and breadth of the market in Penang.
“The real success of the entire development of Andaman Island phases one and two will depend on the economic development of the northern region,” he said.
Having concluded the reclamation of Andaman phase one, covering 253 acres, E&O is embarking on the reclamation of Andaman phase two, spanning 507 acres. Of the 507 acres, 60 acres will be given back to the Penang state government.
Notably, the group has a 15-year development plan for Andaman phase one with a gross development value of RM17bil.
Kok said the group plans to launch 69 units of landed houses (terrace and semi-detached), a high-rise residential condominium of 260 units and another high-rise development called Marina Apartments (560 units) in Andaman phase one in the near term.
“Following these upcoming three product launches on Andaman Island, we will be concentrating on developing 19 acres of commercial properties, potentially encompassing serviced apartments, offices, malls, hotels and other commercial amenities.
“When the two phases of the island are fully developed, the population will be more than 200,000. Hence we may also develop education and healthcare-related facilities,” he said.
For 2Q24, E&O’s revenue increased by 30.4% year-on-year (y-o-y) to RM123.9mil while net profit surged to RM29.7mil from RM16,000 in 2Q23, underpinned by enhanced revenue and absence of unrealised foreign exchange loss in 2Q23.
The property segment’s revenue rose by 35% to RM96.4mil in 2Q24, as a result of higher sales of its ongoing project, Arica@Andaman, as well as its joint-venture projects namely Conlay, The Peak and Avira Garden Terraces.
As for its hospitality segment, E&O’s revenue rose by 20.8% y-o-y to RM49.4mil for 2Q24 compared with RM40.9mil in 2Q23. The increase is mainly due to the higher average room rate and occupancy rate in the current financial period.
Kok said the encouraging sales from Arica not only indicates the group’s understanding to deliver and cater to the demand of today’s property buyers but also stand to support the company’s larger ambitions and strategies of creating a sustainable population in the Andaman Island in the long run.
“In essence, the property market is showing promising signs of growth and we are cautiously optimistic this will further bolster our earnings, not only from Penang but from the sales of our developments across prime areas such as Damansara Heights in Kuala Lumpur and Johor Bahru.
“As we are heading into the year-end festive season, we are seeing higher occupancy rates in our hotels in Malaysia and London, which we believe will continue to contribute positively to our earnings,” he added.
