Eco World posts record profit


  • Corporate News
  • Friday, 13 Dec 2019

KUALA LUMPUR: Amidst a weakened domestic property backdrop, ECO WORLD DEVELOPMENT GROUP Bhd has surprised the market with record-high net profit of RM203.42mil for the financial year ending Oct 31,2019 (FY19).

Likewise, its international arm Eco World International Bhd (EWI) returned to the black with a net profit of RM187mil, as compared to a net loss of RM11.23mil in FY18.

Eco World’s net profit for FY19, which grew 117.5% year-on-year (y-o-y), was achieved on the back of better sales, good site progress and a higher percentage of completion of the group’s ongoing projects.

Meanwhile, EWI recorded higher recognition of revenue and profit by its joint-venture projects in the United Kingdom, following completion and commencement of handover of open market sales units, as well as revenue and profit recognition of its built-to-rent (BtR) sales.

EcoWorld president and CEO Datuk Chang Khim Wah said the group is on track to achieve the RM6bil combined sales target for the financial years 2019 and 2020.

“The best is yet to come. Looking at this year’s results, this is probably our best ever, strongest results since we started. Both Eco World and EWI are targeting to declare dividends in 2020.

“Despite it being a challenging year, as far as Eco World is concerned, we are looking forward to the coming year with optimism and hope. The reception towards our marketing campaigns and designs has been good, and I am encouraged that 2020 will be an even better year for us, ” he said at a briefing.

To date, Eco World has an unbilled earnings of RM5.16bil, which gives the group good earnings visibility for the next two to three years.

A total of 5,763 units was handed over in FY19, making it the largest number of completions and handover of properties sold by Eco World.

The total units handed over comprised 3,367 landed homes, 1,844 apartments and 429 commercial and 123 industrial units, which contributed to EcoWorld’s RM2.7bil sales in FY19.

Chang noted that sales momentum picked up noticeably in the last two months of FY19, with a monthly average of RM383mil sales recorded during the period, as compared to an average of RM284mil per month from March until August 2019, following the official launch of the home ownership campaign (HOC).

Despite the absence of HOC next year, Chang remains confident that Eco World is able to maintain its performance.

“The HOC is a good impetus by the government to spur the housing market. However, as a developer, you cannot expect to depend on the government forever.

“With the demographics and market that Eco World is in, where 60% of our buyers are Generation Y and Z, we are confident the market can sustain us, ” he said.

Eco World plans to introduce a new range of homes priced from RM300,000 to RM450,000 next year, to take advantage of the infrastructure and lifestyle amenities already in place at its various projects.

As for EWI, five projects in the UK have commenced handover, namely, London City Island, Embassy Gardens, Kensal Rise, Millbrook Park, and Aberfeldy Village, with keys to 1,141 residential units delivered to purchasers.

EWI recorded RM1.12bil sales in FY19.

While the sales rate of EWI’s higher-end products in London is still being affected by the ongoing Brexit-related uncertainties, the mid-market products developed with joint-venture partner Willmott Dixon are doing well.

According to EWI president and CEO Datuk Teow Leong Seng, EWI has seen a 67% increase in its open market sales in FY19.

He said house prices in London over the past few months have firmed up and volumes have increased significantly.

Over in Australia, house prices have also firmed up over the last three months, especially after the federal elections and as the market improved, he said.

“To date, the RM5bil unbilled effective sales will be translated to earnings for FY20 and FY21.

“We will also be completing a few big projects next year, namely, Wardian in the UK, coupled with West Village in Sydney and Yarra One in Melbourne, Australia.

“In line with EcoWorld, EWI is also maintaining its sales target of RM6bil for FY19 and FY20, ” said Teow.

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