KUALA LUMPUR (Sep 20): Eco World International Bhd (EWI) has eked out its first quarterly profit since listing in 2015 amid a pick-up in property sales which has put the property developer on-track to achieving its target of RM3 billion sales in the current financial year.

EWI registered earnings of RM10.44 million in its third financial quarter ended July 31, 2018 (3QFY18), mainly on the back of recognition of revenue and profit of a completed joint venture project in the United Kingdom.

In the corresponding quarter last year, the group incurred a net loss of RM24.2 million.

In a filing with Bursa Malaysia today, EWI said the group was able to recognise RM36.4 million as its attributable share of results from its joint ventures as opposed to the share of loss of RM13.2 million in the previous year.

During the quarter, the group commenced the handover of units in Amelia Tower of London City Island in July, marking its first overseas project handover, three years after the EcoWorld brand was launched internationally in 2015.

The completion of Amelia Tower enabled the group to achieve its maiden quarterly net profit of RM10.4 million, of which EcoWorld Malaysia’s 27% share amounted to RM2.8 million.

EWI said more units in London City Island and another project, Embassy Gardens, are scheduled for handover in the remaining months of the financial year, and would contribute positively to group profitability in 4QFY18.

Besides the commencement of revenue and profit recognition in its joint-venture projects, EWI said the improvement in earnings was supported by a 52% year-on-year reduction in selling and marketing expenses due to the strategic shift by the group towards more impactful yet cost-effective digital marketing platforms coupled with targeted on-ground marketing strategies employed by its matured projects.

In addition, there was a 14.5% savings on administrative expenses compared with the previous corresponding quarter arising from various cost savings measures implemented during the financial year.

The group’s subsidiaries did no record any revenue in 3QFY18.

However, EWI noted that as at Aug 31 total sales achieved have reached RM2 billion — more than double the total sales of RM923 million recorded in the first six months of the financial year — and believes it is on track to achieve its RM3 billion sales target for FY18.

For the cumulative nine months, EWI narrowed its losses to RM34.84 million against RM55.08 million in the same period last year.     

EWI chairman Tan Sri Liew Kee Sin is optimistic that prospects for the group remain very bright.

"The team has worked extremely hard to turn challenges at home and abroad into opportunities to further extend our market reach and entrench the EcoWorld brand in the minds of homeowners and institutional investors. Their unrelenting pace, passion and commitment to excellence over the last five years have borne fruit as evidenced in the improvement in both sales numbers and financial results achieved in the current quarter.”

He noted that as at Aug 31, EcoWorld Malaysia’s and EcoWorld International’s effective share of unbilled progress billings stand at RM6.16 billion and RM6 billion respectively.

"Our large number of ongoing projects, the increasing maturity of the our Malaysian landbank coupled with the growing pipeline of new projects secured by EcoWorld International also provides with us a strong foundation on which to anchor our growth ambitions. In this regard, the EcoWorld brand’s remaining GDV to be developed amounts to approximately RM86.5 billion on a combined basis — this will assure the sustainability of the Group’s local and international business model for many years to come.”

EWI's shares closed up 3 sen or 2.8% at RM1.10 for a market capitalisation of RM2.64 billion.