EWI recorded a first-quarter pre-tax profit of RM1.5mil.
PETALING JAYA: Eco World International Bhd
(EWI) continues to make progress with the monetisation of inventories and sales of completed stocks, which are estimated to generate excess cash up to RM500mil for the group over 2024 and 2025.
For the first quarter ended Jan 31, 2024 (1Q24), EWI recorded a pre-tax profit of RM1.5mil compared to a pre-tax loss of RM30.4mil in 1Q23.
This was mainly due to foreign-exchange gains from the appreciation of the pound sterling against the ringgit on repayment of advances by EcoWorld-Ballymore and conversion of pound sterling-denominated bank balances in 1Q24, as opposed to foreign-exchange losses recorded in 1Q23.
It was also underpinned by lower finance costs as a result of full settlement of all borrowings in 2023.
EWI achieved RM243mil sales exchanges plus reserves of RM203mil, adding up to a total of RM446mil for the first four months of the financial year 2023.
The group said Embassy Gardens, which brought in RM105mil sales, was the biggest contributor, followed by Wardian (RM75mil) and Yarra One (RM20mil).
Following the distribution of the RM144mil dividend during 1Q24, EWI still had a net cash balance of RM211mil as at Jan 31, 2024.
EWI president and chief executive officer Datuk Teow Leong Seng said as at Feb 29, 2024, the property group had approximately RM650mil of completed and nearly-completed stocks that are available for sale, of which the group’s effective share is approximately RM500mil.
“The board intends to distribute the excess cash to shareholders and we are seeking approval in our AGM next week to undertake a second capital reduction exercise to enable such distribution,” he said in a statement.
Teow said recent data showed that London house prices continued to weaken. He added that the persistent challenges of high living costs and elevated interest rates are dampening the demand from potential homebuyers.
“As such, all launches for the remaining sites continue to be put on hold, pending review of their feasibility in view of the ongoing weak sentiment among homebuyers and significant cost inflations.
“The decision to proceed with launches will be contingent upon an improvement in market conditions, stabilisation of cost pressures and meeting the expected returns required,” said Teow.
EWI has 18 existing and upcoming projects in the United Kingdom and Australia with a total gross development value of £4.6bil and A$0.7bil, respectively.
The group’s entry into the United Kingdom began with the EcoWorld-Ballymore joint-venture that is currently developing three prime waterside residential projects in London.
In 2018, EcoWorld London was launched, giving the group a presence in the UK mid-mainstream market and build-to-rent subsector.
The company has two active projects in Australia, namely, West Village in Sydney’s second central business district of Parramatta and Yarra One in Melbourne’s South Yarra neighbourhood.
