Bring on the Eastern Wind

MYOB did a sum of parts of Eastern Holdings a few weeks back. Today, EH announced a good set of results.


Boutique Property Developer, Eastern Holdings interim net profit surges 585% to S$13 million
- Revenue tripled to S$40.2 million on the back of Singapore property boom
- Property business contributed 75% of the total revenue
- Rewards shareholders with 1-for-2 bonus shares; to improve trading liquidity of the Group’s shares

"Over the years, Eastern Holdings has developed the reputation as an emerging boutique property developer. Looking forward, we will continue to concentrate on developing and investing in a good mix of commercial, residential and industrial properties in local and overseas markets. Barring unforeseen circumstances, the Group expects to do reasonably well in the next 12 months."

"The Proposed Bonus Issue is intended to reward shareholders for their loyalty to, and continuing support for, the Company. In addition, by increasing the number of shares in issue, we hope to improve the trading liquidity of the Group’s shares."

~ Mr. Tay Thian Boon, Stephen
Chairman, Eastern Holdings Limited


Singapore, 13 November 2007 – Eastern Holdings Limited, ("Eastern" or the "Group"), an emerging boutique property developer with a growing portfolio of residential, commercial and industrial properties, has announced its financial results for the six months ended 30 September 2007 (1H08). Net profit jumped 585% from S$1.9 million in 1H07 to S$13 million in 1H08. This is largely attributed to the increasing demand in the local property market.

The Group is also proposing a bonus issue of 100,000,000 new ordinary shares (the "Bonus Shares") in the capital of the Company. This will be on the basis of one (1) Bonus Share for every two (2) existing ordinary share in the capital of the Company held by the shareholders of the Company.

1H08 Financial Performance Review
The Group’s 1H08 revenue improved to S$40.3 million; a 254% jump compared to 1H07. The increase in revenue was the result of prominent sales from sold properties namely D’Evelyn, Walmer Drive, Brighton Crescent and Coronation Drive. Sales and rental of properties contributed 75% of the total revenue, up from last year’s 16%.

Eastern‘s net profit increased by 585% to approximately S$13 million for 1H08 as compared to S$1.9 million for 1H07.

Earnings per Ordinary Share for the year increased to 6.49 cents for 1H08 from 0.95 cents in the same corresponding period last year.

As at 30 September 2007, the Group has more than S$15 million in cash and cash equivalents.

Outlook & Future Plans

According to a local broking house’s report, the physical property market in the short to medium term, should still continue its growth momentum as the industry fundamentals are still robust. In addition, property developers have stronger cashflow from locked in presales over the past few years and are unlikely to lower selling prices to boost sales.

According to Urban Redevelopment Authority (URA) statistics, a total of 6.9 million sf of office GFA is likely to be completed between 2H07 and 2010 or an average 2 million sf a year. This compares with annual demand of 1.96 million sf and 10-year annual take up of 1.3 million sf. As such, in the short to medium term, demand of office space is likely to remain robust and will continue to strengthen office rents and capital values.

As Eastern embarks on the new developments of its two industrial and two residential projects, the Group believes that its property related business will continue to contribute substantially to the Group’s overall operations.

The Group has recently moved to divest selected media assets, which include the IT show, Computer Exhibition, the Food and Beverage Fair and the World Food Fair. The Group expects this transaction will have a material financial impact on the company if it is successful.

MYOB?
EH has enough cash on hand to give out 7.5 cents per share. This is before the divestment of the selected media assets listed above. Together with the management's commitment to inprove liquidity and to reward shareholders, the next few months could be interesting.