PETALING JAYA (Feb 26) — Eastern & Oriental Bhd (E&O) delivered a strong third-quarter performance for the period ended Dec 31, 2025 (3QFY2026), with net profit attributable to shareholders more than doubling year-on-year.
Net profit rose 105.6% to RM63.51 million compared with RM30.90 million previously, supported by higher revenue and stronger contributions from its property developments. Quarterly revenue increased 45.4% to RM243.92 million from RM167.74 million a year earlier. Basic earnings per share improved to 2.55 sen from 1.39 sen.
Profit before tax for the quarter climbed to RM85.97 million, up from RM45.54 million in 3QFY2025. The results included an unrealised foreign exchange loss of RM26.91 million. Excluding this non-cash item, underlying operating performance would have reflected an even stronger improvement, mainly driven by the property segment.
For the nine months ended Dec 31, 2025 (9MFY2026), the group recorded:
Revenue of RM631.79 million (up from RM504.43 million)
Profit before tax of RM220.44 million (up from RM144.46 million)
Net profit attributable to owners of RM159.17 million (up from RM98.80 million)
The property segment continued to anchor performance, delivering:
Revenue of RM547.64 million for 9MFY2026, representing a 29.5% increase
Operating profit of RM207.05 million, up from RM145.69 million
Higher revenue recognition from ongoing and newly launched projects supported the improvement, alongside stronger margins. Analysts have noted that E&O’s focus on premium and luxury developments has helped it achieve gross profit margins exceeding 50% this quarter, providing resilience against cost pressures across the sector.
While E&O’s flagship activity is centred in Penang and other markets, the broader trend toward high-margin integrated developments mirrors what is increasingly seen in commercial property in KL and upscale mixed-use schemes across Selangor growth corridors.
In December, the group marked the opening of the Gurney Bridge, an eight-lane connection linking Andaman Island to Gurney Drive. The new infrastructure reduces travel time to approximately five minutes and enhances connectivity to Penang’s established commercial and tourism belt.
Improved infrastructure connectivity often serves as a key value driver — a dynamic similarly observed in Kuala Lumpur and Selangor, where new highways, rail links and transit-oriented developments continue to elevate demand for office space in Bukit Jalil, commercial property in KL and surrounding investment-grade locations.
Current launches on Andaman Island are reportedly achieving indicative pricing between RM900 and RM1,000 per square foot.
For 9MFY2026, the hospitality division generated RM79.54 million in revenue, slightly higher than the previous corresponding period. Operating profit eased marginally due to higher costs.
Meanwhile, the investments and others segment returned to profitability, recording an operating profit of RM1.47 million compared with a loss previously, supported by lower foreign exchange losses and stronger interest income.
As at Dec 31, 2025:
Total assets stood at RM4.58 billion
Total liabilities amounted to RM2.24 billion
Net assets attributable to shareholders reached RM2.32 billion
Net assets per share improved to RM1 (from RM0.93 as at March 31, 2025)
Cash and bank balances totalled RM431.24 million, while borrowings stood at RM2.25 billion, comprising both short- and long-term facilities.
The board declared an interim dividend of one sen per share for the financial year ending March 31, 2026. Entitlement and payment dates will be announced later.
Separately, an indirect wholly owned subsidiary entered into a sale and purchase agreement in August 2025 to dispose of two freehold land parcels in London for a minimum consideration of £75 million (approximately RM427.8 million). The transaction has yet to be completed.
Capital recycling through strategic disposals is increasingly common among developers aiming to strengthen balance sheets and redeploy funds into higher-yielding projects — a strategy also relevant to players accumulating industrial land in Selangor or repositioning commercial property in KL for improved returns.
E&O shares last traded at 72.5 sen, reflecting a price-to-book ratio of roughly 0.73 times based on its latest net asset value per share of RM1.
Although E&O’s immediate growth narrative is centred on Penang’s premium segment, the broader themes — infrastructure-led appreciation, high-margin developments, and strategic landbank management — remain equally relevant to investors in:
Industrial land in Selangor
Industrial property in Subang area
Factory in Puchong
Office space in Bukit Jalil
Commercial property in KL
As infrastructure connectivity and premium positioning continue to shape Malaysia’s property landscape, developers with disciplined land strategies and strong margins are likely to remain resilient heading into 2026.
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