92 nd Annual General Meeting PRESENTATION TO SHAREHOLDERS | 28 Aug 2019
Group Result for FY 2019 FY 2018 FY 2019 Variance Description RM’000 RM’000 RM'000 Restated Revenue 886,320 982,706 (96,386) Operating profit 238,795 *261,825 (23,030) Finance costs (76,793) *(69,599) (7,194) Share of Joint Ventures (104) *(3,123) 3,019 Share of Associate - (20) 20 Profit before tax 161,898 189,083 (27,185) Profit after tax 76,364 109,822 (33,458) PATAMI 61,918 *94,298 (32,380) In the current financial year, the Group has adopted the MFRS Framework for the first time. The effects of the adoption of MFRS had resulted in the reduction of the opening balance of retained profits by RM2.8m. Achieved a revenue of RM886.3m for financial year ended 31 March 2019, a decrease of RM96.4m or 9.8%. The Property segment registered a decrease of RM81.1m and the Hospitality segment registered a decrease of RM14.5m. The profit before tax in the current financial year was dampened by the holding costs payable of RM44.6m in Q3 FY19, in respect of the non-exercise of an option for the acquisition of a parcel of land. However in the absence of this one-off holding costs, the FY19 would have reflected a healthier profit before tax of RM206.5m with an increase of RM17.4m. 2 * Restated due to adoption of MFRS
Adjusted PATAMI Description FY 2019 FY 2018 Variance RM’000 RM’000 RM’000 Restated PATAMI 61,918 94,298 (32,380) Adjustments: Net loss from fair value adjustment of investment 3,922 28,329 (24,407) properties Net impairment loss on 6,966 20 6,946 property, plant and equipment Land held for property 5,307 571 4,736 development written down Property development costs 14,424 14,424 written down - Holding costs payable 44,573 44,573 - Net gain on disposal of - (24,493) 24,493 subsidiary Adjusted PATAMI 137,110 98,725 38,385 3
Segmental Results – Revenue Description FY 2019 FY 2018 Variance Revenue Revenue Revenue RM’000 RM’000 RM’000 Property segment 798,927 880,008 (81,081) Hospitality 84,348 98,872 (14,524) Investment & Others 3,045 3,826 (781) Total 886,320 982,706 (96,386) The decrease in revenue in the property segment was due to lower revenue recognition for reclaimed land in STP2A, lower sales of completed properties in STP1 and in Princes House, London. The decrease in revenue for hospitality segment was mainly due to lower occupancy rate; as well as lower revenue recognised following the disposal of E&O Express Sdn. Bhd. (EOE), a subsidiary company which owned the Lone Pine Hotel. The disposal of EOE was completed in the previous financial year. Revenue from investments and others slid slightly in FY19, which was mainly due to a drop in the property management fees income. 4
Statement of Financial Position FY 2019 FY 2018 Variance RM’000 RM’000 RM’000 Description Restated (a) (b) (a)-(b) Total Assets 4,195,014 4,098,557 96,457 Cash and bank balances 854,833 521,568 333,265 Total borrowings 1,413,373 1,650,573 (237,200) Shareholders’ funds 2,007,574 1,844,162 163,412 Net Assets per share (RM) 1.40 1.42 (0.02) Gearing ratio: - Gross 0.70 0. 90 0.20 - Net 0.28 0.61 0.33 Cash and bank balances showed an increase of RM333.3m mainly from increased cash flow from operating activities of RM471.5m mitigated by net cash flows used in financing activities of RM134.4m. Borrowings stand at RM1.413b, a decrease of RM237.2m. Shareholders’ funds increased by RM163.4m mainly due to the profit for the financial year amounting to RM61.6m, issuance of new ordinary shares of RM127.6m in relation to the private placement and offset with share buy back of RM25.9m. 5
E&O’s Sales & Unbilled Sales Sales FY 2019 Unbilled Sales FY 2019 RM 330.8m RM 61.3m UK Johor Klang 3% 9% Valley 6% Klang Valley 25% Penang 63% Penang 94% Sales achieved of RM330.8m Unbilled sales RM61.3m will progressively be recognised over FY20 RM152.5m remaining to be billed to KWAP for land sale (not included in above figures) 6
Reclassification of the term Inventories FY 2019 Reclassification Assets (RM’000) FRS 111 MFRS 15 Non-Current Assets: 1,427,630 Land held for property development Non-Current Assets: 1,427,630 Inventories Current-Assets: 534,183 Property development costs (PDC) Current-Assets: 216,066 750,249 Inventories PDC 534,183 Completed 214,785 Properties Food, 351 beverages & tobacco General 930 Supplies 7
Monetising Completed Properties Completed Properties (at cost) In RM’000 500,000 455,085 450,000 400,000 350,000 322,972 300,000 250,000 214,785 210,601 206,455 200,000 150,000 100,000 58,358 50,000 0 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 Projection 8
Shareholders’ Returns FYE 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Net Dividend 2.9 1.5 3.2 3.4 3.0 * 2.0 3.0 * 3.0 ^ per stock unit (sen) Remains a trustee stock, maintaining continuous & consistent dividend payout since 2010 ^ Proposed fist and final single-tier dividend of 3 sen per stock unit, to be approved at forthcoming AGM * Dividend via distribution of treasury stock units on the basis of one (1) stock unit for every fifty (50) existing ordinary stock units 9
STP2A UPDATE 10
Completed temporary bridge at Middle Bridge 12
STP2A – Completed Walkway Plot 16 2A3 RECLAMATION AVERAGE AT +5 TO +6M CD BALANCE AREA OF WALKWAY COMPLETED WALKWAY 1952M 13
STP2A – Private Berth WALKWAY IN PROGRESS FOR PRIVATE BERTH 2 2A3 RECLAMATION AVERAGE AT +5 TO +6M CD 14
STP2A Island COMPLETED WALKWAY COMPLETED CAPPING BEAM PLOT 16 (75 ACRES) 15
17
Moving Forward 18
Moving Forward….. The next 3 years Monetise • Disciplined approach to monetise inventory which inventory are fully paid for and unencumbered to generate cashflow Sell non-core • Lower net gearing and generate cashflow assets Operationalise Complete reclamation and infrastructure • STP2A • Commence to launch projects in 2020 Launch premier lifestyle projects in strategic Launch Conlay and • locations to enhance the E&O brand and The Peak positioning Start reclaiming • To progress further with preparatory works for STP2B & 2C the reclamation of STP2B & STP2C 19
Operationalise STP2A To build an iconic 1. Progressively destination in South complete Complete East Asia to live, infrastructure reclamation of STP2A work, play and sail works by 2022 in 2019 over the next 15 2. Launch STP2A years projects in 2020 20
• Land size - 1.44 acres The Conlay • Net Saleable area – 450,000 sf • GDV – RM896 million Launch in 4 th quarter 2019 • 21 * Artist’s impression
The Peak Land size - 3.94 acres • Net Saleable area - 211,295 sf @ 54 units • • GDV – RM 280 million • Launch in early 2020 22 * Artist’s impression
Conclusion 23
Conclusion Fundamentals of E&O is remains unchanged Unbilled sales of RM61m as at 31 March 2019 Unrecognised revenue from KWAP of RM405m as at 31 March 2019 Property Inventory level successfully brought down to RM215m (RM416m at Development market value) from a high of RM537m in Sept 2016 division remains Proposed launches in excess of RM1.5 billion worth of projects over next core two years will replenish unbilled sales Net gearing is 0.28x as at 31 March 2019 with cash hoard of RM855m Fund raising will further strengthen the balance sheet and is for gearing up for future growth Reclamation progressing well – STP2A island is 99% completed and Gurney Wharf is 100% completed. Targeted handed over at end of 2019. Operationalising Titles have been obtained for all of STP2A land STP 2A is imminent Operationalising STP2A development is the next integral step Target first launch in second half of 2020 24
End 25
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