KUALA LUMPUR: Eastern & Oriental Bhd expects its fourth quarter (Q4) results for the financial year ending March 31, 2022 (FY22) to be stronger, mainly following the ongoing new signing of sales and purchase agreements (SPAs) of The Meg - Andaman Phase 1 project in Penang and the full operation of its hotel, among others.
Executive chairman Datuk Tee Eng Ho said based on the encouraging interest on the project that has reached about 40 per cent in the past two months, and with more events such as weddings taking place at its hotel, there is a high chance that earnings would be firmer than Q3 FY21.
In terms of gross development value (GDV), The Conlay, Kuala Lumpur project alone is close to RM1 billion, while The Peak in Damansara Heights, a joint venture development with Mitsui Fudosan, which is now open for preview, is RM348 million, and The Meg - Andaman Phase 1 is RM647 million.
"We see that in the past two months, it has been a pleasing and beyond our expectation. When the borders are open, we reckon that it will resume our sales faster and the trickle effect that we experience will come into steady flow.
"These developments, including in Avira, Iskandar Johor, as well as our hospitality segment (E&O Hotel, E&O Residences and Lincoln Suites in London) will keep us busy for the next two to three years," he said in a virtual media briefing in conjunction with the announcement of 3QFY21 today.
On its sales target to be achieved in FY23, he said it could range between RM600 million and RM800 million.
Meanwhile, managing director Kok Tuck Cheong said the group would be issuing irredeemable convertible unsecured loan stock (ICULS) to bolster its cash resources ahead of all its potential launches that it plans over the next three years.
"The bulk of the funds raised from this ICULS issue will mainly be earmarked towards land reclamation of the Phase 2 of the Andaman Island in Penang, as well as on embarking on our new development projects and right sizing the balance sheet and optimising the cash flow," he said.
He said the basis for the ICULS is one ICULS for every two existing E&O shares and the issue price is 50 sen per ICULS.
The conversion price is also at 50 sen at the ratio of one ICULS for one new E&O shares.
He said the coupon of 3.8 per cent per annum is payable semi annually and the tenure of the ICULS is for five years.
"The propose rights issue of ICULS is expected to raise a minimum of RM178.2 million or a maximum of RM362.7 million if it is fully subscribed by all shareholders. We expect to complete this exercise by the end of 2022," he said.
In a filing with Bursa Malaysia today, the group’s net profit for Q3 ended Dec 31, 2021 (Q3 FY21) increased to RM8.07 million against RM1.02 million in the preceding year corresponding quarter.
Revenue however, was lower at RM23.37 million from RM36.52 million previously.
It said the decrease in revenue was mainly attributed to the properties segment which registered a decrease of RM85.0 million mainly due to a sale of land parcel of RM55.0 million in the previous financial period and lower sales of completed properties during the current financial period. - Bernama