KUALA LUMPUR (Oct 28): Oriental Interest Bhd (KL:OIB) has called off its proposed RM280 million acquisition of two motorcycle financing and retail businesses, as the group reported a near 36% drop in fourth-quarter net profit amid lower progress billings from its property projects.

The property developer said it had mutually agreed with vendor LLSB 1980 Holdings Sdn Bhd to terminate the acquisition of Chin Hin (Jitra) Sdn Bhd and CHJ Motor Holdings Sdn Bhd, following a reassessment of its business strategy and the longer-than-expected time needed to obtain regulatory approvals.

The termination agreement was signed on Wednesday, with neither party having any claims against the other arising from the deal, according to a statement.

The proposed acquisitions, first announced in July, would have marked Oriental Interest's entry into the motorcycle financing and retail businesses.

Under the deal, the RM280 million purchase price was to be satisfied through the issuance of RM100 million worth of new shares and RM180 million in redeemable non-convertible preference shares.

The deal was classified as a related-party transaction as the vendor was linked to Oriental Interest's controlling shareholder, LK Labuan Foundation.

In September, Oriental Interest withdrew its listing application and draft circular submitted to Bursa Malaysia for the proposed acquisitions, citing the need to make essential updates to the documents.

Following the termination, Oriental Interest said it would focus on its core property development and construction businesses, supported by ongoing projects, unbilled sales and its existing land bank.

Oriental Interest reported a net profit of RM25.16 million for the fourth quarter ended Aug 31, 2026 (4QFY2026), down 35.9% from RM39.26 million a year earlier.

Quarterly revenue fell 20% to RM179.4 million from RM224.27 million, mainly due to lower progress billings from its property development segment, the group said in a filing with Bursa Malaysia.

For the full financial year, net profit declined 21.1% to RM96.8 million from RM122.75 million in FY2025, while revenue fell 20% to RM680.52 million from RM850.55 million.

The group said its general construction segment recorded a 122% increase in full-year pre-tax profit, supported by improved project margins and better cost management, although this was insufficient to offset weaker property development earnings.

Oriental Interest did not declare a dividend for the fourth quarter, leaving full-year dividend payout at six sen per share, compared with 20 sen for FY2025.

Looking ahead, the group said its unbilled property sales rose 22% to RM635.2 million as at end-August 2026 from RM520.4 million a year earlier, providing visibility on future earnings.

During the quarter, Oriental Interest completed and handed over 960 units across its developments, while launching new phases at SP Saujana Permai, Serai Residensi and Taman Dahlia, alongside a new project, Myra Embun.

Its land bank stood at  2,013 acres as at end-August.

The group said it remains cautiously optimistic about its performance in FY2027, supported by its property development pipeline and continued demand from first-time homebuyers and owner-occupiers.

Shares of Oriental Interest closed unchanged at RM1.22 on Wednesday, valuing the group at RM748.6 million.