EcoWorld records highest quarterly profit of RM50.5m in 3Q

The main projects in the Klang Valley, Iskandar Malaysia and Penang contribute to revenue and gross profit in the quarter


ECO World Development Group Bhd (EcoWorld) stated higher sales and projects works which enabled it to record highest quarterly net profit of RM50.48 million for the third quarter ended July 31, 2019 (3Q19), versus RM27.8 million net profits it made for the corresponding period last year.

Earnings per share (EPS) rose to 1.71 sen for the quarter from 0.94 sen in 3Q18.

The developer’s quarterly revenue increased 14.68% year-on-year (YoY) to RM521.37 million.

“The higher revenue and gross profit recorded in 3Q19 were mainly due to a higher proportion of completed/near completion units sold and a higher percentage of completion attained by various ongoing projects during the quarter,” EcoWorld noted in an exchange filing yesterday.

It said the main projects which contributed to revenue and gross profit in the quarter were Eco Majestic, Eco Forest, Eco Sanctuary and Eco Sky in the Klang Valley; Eco Botanic, Eco Spring, Eco Summer, Eco Business Park I, Eco Business Park II, Eco Business Park III and Eco Tropics in Iskandar Malaysia; and Eco Meadows and Eco Terraces in Penang.

“We are also happy to note the positive momentum established after the official launch of the national Home Ownership Campaign (HOC) on March 1, 2019 has continued for EcoWorld,” EcoWorld president and CEO Datuk Chang Khim Wah (picture) said.

The developer recorded RM1.94 billion sales as at Aug 31, 2019, of which RM1.71 billion was secured in the six months since the launch of HOC.

In the final quarter of the financial year, EcoWorld will begin unveiling new phase launches of its various projects as it presses on to achieve the two-year RM6 billion sales target set for the financial year 2019 (FY19) and FY20.

The developments include Cora at Eco Ardence and Regent Gardens at Eco Grandeur.

Other new phases to be launched include the Hazelton at Eco Forest and a new phase of Mellowood homes at Eco Majestic.

Eco Horizon will be launching the Brydon in Penang, while Eco Spring will introduce Rosé, a new Garden Home series in Iskandar Malaysia.

Meanwhile, Eco World International Bhd’s net profit for 3Q19 rose more than fourfold to RM57.94 million from RM12.85 million a year ago.

The growth was mainly due to higher recognition of revenue and profit by its joint-venture (JV) projects in the UK, following completion and commencement of handover of units sold to customers, commencement of revenue and profit recognition of EcoWorld London’s built-to-rent (BtR) sales and unrealised foreign-exchange (forex) gain reported in current quarter as opposed to unrealised forex loss reported in 3Q18.

EPS for the three-month was higher at 2.41 sen compared to 0.54 sen in 3Q18.

Eco World International president and CEO Datuk Teow Leong Seng said the company is on track to hand over all the remaining residential blocks at London City Island and Embassy Gardens, and will be handing over Wardian London and both its Australian projects, namely West Village in Sydney and Yarra One in Melbourne next year.

“Our BtR blocks in Kew Bridge have also achieved the golden brick which enabled the project to start recognising revenue and profits.

“FY19 and FY20 will therefore be very strong years for Eco World International as the bulk of our RM5.8 billion future revenue as at Aug 31, 2019, are translated into revenue and share of profits from JVs — this provides our shareholders with very good near-term earnings visibility,” he said.

Eco World International recorded RM773 million sales in the first 10 months of FY19.

Its projects in the UK generated RM686 million sales, while those in Australia generated RM87 million.

The potential BtR deals in the UK, which are being pursued by EcoWorld London with institutional investors, are expected to be the key sales driver in FY19 and FY20.