Orient reported a loss for 4Q2008

Orient has announced its results for 4Q2008 ended 31/12/2008. It reported a net loss of RM1.1million for the 4Q2008 as compared to a net profit of RM119 million for 3Q20008 or RM78 million for 4Q2007. Its turnover dropped 21% q-o-q or 19% y-o-y to RM1.022 billion.



The poor performance for the 4Q2008 is attributable to:
1) sharp drop in operating profit for the Automotive and Investment holdings & Financial Services divisions; and
2) losses incurred by both the Plantation and Hotels & Resorts divisions;

Orient derives 75% of its operating profit from its Automotive & Plantation division for FY2008. With the poor consumer sentiment & sharply lower prices for CPO, Orient is not expected to put strong earning for the coming financial year.



From the monthly chart below, we can see that Orient is still in a long-term uptrend, with support at RM4.30. This level should support the share price in the event of price weakness ahead.


Chart: Orient's monthly chart as at Feb 23, 2009 (source: Quickcharts)

Based on poorer outlook, I expect Orient share price to drift lower (possibly, to re-test its long-term uptrend line).