Eastern & Oriental Bhd (E&O) is getting itself prepared during this juncture for a post-Movement Control Order (MCO) recovery and hope the government stimulus measures to gain traction.
E&O in a statement on June 30, said its Seri Tanjung Pinang Phase 2A (STP2A) in Penang was now fully reclaimed with infrastructure works underway.
The issuance of the RM1.3 billion Sukuk Murabahah is going towards funding the “game-changing project” for E&O and Penang.
Managing director Kok Tuck Cheong said that this unprecedented Covid-19 pandemic has been affected both lives and livelihoods.
“Never in our lifetime have we faced a crisis that so severely affects both lives and livelihoods.
“While the immediate priority was to ensure the health and safety of our people, including our valued customers, purchasers and stakeholders, the group is also implementing a series of cost-containment measures, focusing on optimising operations to ensure strong financial discipline with manageable cashflow and commitments,” he said.
According to Kok, by continually reviewing and refining their development concepts and products, and keeping a close watch on evolving conditions that bode well for relevant launches, E&O was positively prepared and positioned to respond and further leverage on the property brand it had built.
E&O released its results for the year ended March 3, 2020 recently, reporting a 45.1% drop in total revenue to RM486.8 million.
“In the face of an unprecedented period of disruption and uncertainty following the sharp and sudden fallout of the global Covid-19 pandemic, the group’s results were lower across the board, given that the hospitality industry and premium property development sector in which the group operates, were hit especially hard,” it said.
The fall in revenue is mainly attributed to the property segment which registered a decrease of RM380.5 million.
“This was largely due to lower revenue recognition from completed projects in Penang, where E&O’s strong track record and brand capital has enabled Seri Tanjung Pinang to now stand 99 per cent sold, despite more recent challenging conditions.”
Due to the temporary nine-month closure of the Eastern & Oriental Hotel’s Heritage Wing in Penang last year which underwent extensive refurbishment, the group’s hospitality segment recorded lower revenue with a decrease of RM20.9 million.
With global economic and political turbulence affecting local market confidence and consumer sentiment, E&O said it had made a transparent decision to conduct fair valuation of its properties in Malaysia and the United Kingdom.
Impairment losses of RM209.6 million on assets and properties resulted in the group posting a pre-tax loss of RM155.6 million compared to a pre-tax profit of RM161.9 million previously.