CEO optimistic about company’s future prospects
PETALING JAYA: The Eco World brand registered total sales of RM6.07bil worth of properties in the financial year ended October 2016 (FY16) through its offerings in both Malaysia and international markets.
Of the amount, the effective sales share attributed to Eco World Development Group Bhd itself amounted to approximately RM4.01bil.
Eco World, the Malaysian listed company that handles all domestic projects, chalked up sales of RM3.4bil while the rest of about RM600mil was attributed to its 27% pro-forma share in Eco World International Bhd (EWI) which is en route to a listing.
On the prospects facing Eco World, president and CEO Datuk Chang Khim Wah is optimistic about the property developer’s trajectory moving forward.
“The market has been challenging, but the yield for Eco World is good and commendable.
“Regardless of any upturn or downturn, we will sail smoothly for the next two years, buttressed by our strong unbilled progress billings,” he said, adding that the company’s gross sales for the year was well accomplished.
For the 2017 and 2018 respectively, Eco World targets higher total gross sales of RM4bil in Malaysia, plus a proportionate share of sales secured by EWI based on a shareholding of 27%, each year.
Eco World saw its net profit for the last quarter of FY16 increase by 49% to RM29.4mil year-on-year, despite the challenging property environment. As for the full year period, the property developer reported a net profit surge of 195% to RM129.3mil compared to FY15.
The spike in net profit was underpinned by both the strong sales achieved in current and prior years as well as the steady progress of construction works on-site at 11 of Eco World’s ongoing projects.
During the period, Eco World recorded a 8.7% growth in revenue to RM741mi. As for the full year ended Oct 31, 2016, revenue rose by 49% to RM2.5bil when compared to the previous year.
The gross development value (GDV) of Eco World’s ongoing projects stood at RM87.5bil, with 64% of it in the Klang Valley alone.
Going by product segment, slightly more than half of the GDV was under mass development or upgrader products, namely the properties ranging from RM500,000 to RM1mil.
“We have two more projects to be unveiled in mid-2017, namely the Eco Horizon in Penang and Eco Forest in Semenyih,” said Chang, adding that the company had no plan to increase its landbank holdings.
On the listing of EWI, its president and CEO Datuk Teow Leong Seng said that the progress was on track.
“We hope to get listed in the first quarter next year,” he said.
In October, GuocoLand Ltd firmed up an agreement to take up a 27% stake in EWI post-listing as a strategic investor and a full-fledged partner.
Apart from Eco World holding 27%, Eco World chairman Tan Sri Liew Kee Sin will hold a further 10% direct stake in EWI.
EWI recorded total gross sales of £441mil (RM2.5bil) in FY16 and has four ongoing projects abroad – three in London and one in West Sydney.
To a question on the impact of the weak ringgit on EWI, Teow said that all of EWI’s project loans were denominated in either pound sterling or Australian dollar.
“So, we have actually hedged quite a large part of our exposure. We are counter-balancing the impact through our proceeds from the upcoming IPO. With the weaker sterling, that would take us a bit further,” added Teow.