PETALING JAYA: Eco World Development Group Bhd (EcoWorld Malaysia) is on track to achieve its financial year 2023 (FY23) full-year sales target of RM3.5bil with RM3.06bil sales recorded in 10 months, representing 87.4% of the target.
For the third quarter ended July 31, 2023 (3Q23), the property developer’s revenue increased by 7.4% year-on-year (y-o-y) to RM477mil. Net profit rose by 43% y-o-y to RM66.3mil or earnings per share of 2.25 sen.
EcoWorld Malaysia president and chief executive officer Datuk Chang Khim Wah said the group is looking forward to being able to serve a larger segment of its growing Malaysian and multi-national industrial customer base through the company’s newly acquired 403.78-acre land in Kulai, Iskandar Malaysia.
“The group continues to enjoy sustained demand for our products across all market segments, with strong sales achieved of RM3.06bil in 10 months, placing us well on track to achieve our FY23 sales target of RM3.5bil.
“Our Eco Business Parks (EBPs) continue to power ahead, with sales of nearly RM1bil achieved in 10 months, representing 132.4% of FY22 full year sales and making up close to one-third of the group’s total sales to-date in FY23.
“We believe this strong momentum will continue based on the sustained interest we have been receiving from both local and international industrialists,” he said in a statement yesterday.
Chang added the group’s latest acquisition (403.78-acre land in Kulai, Iskandar Malaysia) has increased its total industrial landbank to 2,416 acres.
The company has plans to develop it into Eco Business Park VI (EBP VI) with an estimated gross development value of RM1.58bil.
EBP VI will be the group’s fifth EBP and fourth one in the southern region. The purchase of the land is expected to be completed in early 2024.
“We are confident that Iskandar Malaysia holds very encouraging prospects, backed by extensive infrastructure improvement combined with numerous incentives announced by the Malaysian government to further accelerate the state’s development potential,” Chang said.
The group’s EBP segment hit RM997mil sales in 10 months, representing 132.4% of FY22 full year industrial sales and almost one-third of the group’s year-to-date sales.
On the other hand, sales of residential homes have surpassed RM1.63bil as at Aug 31, representing 53.3% of total sales achieved to-date, with homes priced above RM650,000 continuing to be the largest contributor.
Commercial products saw RM432mil sales in 10 months, close to FY22 full year commercial sales of RM446mil, mainly contributed by shop and office units launched during the year within EcoWorld Malaysia’s matured townships.
The group stated the steady sales progress has provided it with future revenue of RM4.22bil as at Aug 31 and maintaining clear near to mid-term earnings and cash flow visibility.
Gross and net gearing levels, as at July 31, are 0.51 and 0.31, respectively, with bank borrowings reduced to RM2.5bil versus RM2.8bil at the start of FY23.
“Our commercial segment also outperformed with RM432mil sales secured in 10 months representing 97% of FY22 full year commercial sales.
“This was mainly contributed by shop and office units launched within our matured townships that are seeing increasingly more established brands in the food and beverage, lifestyle retail and services sectors.
“These businesses are drawn to EcoWorld projects due to our relatively affluent and young customer demographic combined with the place-making appeal of our developments that have successfully attracted customers from beyond our townships who have a high propensity to spend,” Chang said.
Separately, Eco World International Bhd declared a dividend of RM792mil, payable on Sept 29, of which EcoWorld Malaysia’s share is RM214mil.
EcoWorld Malaysia is targeting to declare a second tranche dividend of RM144mil from its excess cash in December 2023 with potentially more to come in FY24.
“Accordingly, we are well-positioned to be able to continue rewarding our shareholders with dividends, whilst also pursuing good opportunities to acquire more land bank that will enhance the group’s future growth prospects,” Chang said.