KUALA LUMPUR (June 28): Eco World Development Group Bhd's (EcoWorld) net profit rose 2.3% to RM34.45 million in the second financial quarter ended April 30, 2018 (2QFY18) from RM33.68 million a year ago, on contribution from its projects in the Klang Valley, Iskandar Malaysia in Johor, and Penang.

This resulted in higher earnings per share of 1.17 sen for 2QFY18 from 1.16 sen for 2QFY17.

EcoWorld also achieved sales of RM923 million as at April 30, 2018 on its Malaysian projects.

Quarterly revenue, however, fell 2.6% to RM498.69 million in 2QFY18 from RM670.02 million a year ago.

In a filing with Bursa Malaysia today, EcoWorld said the lower quarterly revenue was due to the majority of projects undertaken by the group's subsidiaries having handed over the initial phases of properties that were sold.

"Since 2QFY17, close to 7,500 units have been or are in the process of being delivered to customers," it added.

For the cumulative six months (1HFY18), EcoWorld saw its net profit dropped 60.9% to RM58.54 million from RM149.85 million a year ago, while revenue fell 15.9% to RM1.06 billion from RM1.26 billion in 1HFY17.

The group explained that the lower earnings for 1HFY18 were largely due to the inclusion of a gain on dilution of equity interest in its unit Paragon Pinnacle Sdn Bhd, which arose in 1QFY17.

"While sales interest had picked up following the group's successful Chinese New Year campaign and good response to the various localised marketing activities at its project sites in the Klang Valley, Iskandar Malaysia and Penang, buying momentum waned in the lead-up to the country's 14th general election (GE14)," said EcoWorld.

"Uncertainties on the outcome of GE14 caused many customers to hold back from making commitments to purchase in the month of April up until early May 2018.

"Following the announcement of the GE14 results, there has been a notable shift in the public mood with greater optimism and renewed confidence expressed by many regarding their personal futures and that of their families going forward. Nevertheless, May 2018 continued to be a very quiet month on the sales front as most Malaysians were still caught up with post-election news fever," it added.

Going forward, EcoWorld said the group's profit will increasingly be derived from projects undertaken by its various joint ventures (JVs).

"As at April 30, 2018, three of the group's Malaysian JVs have commenced revenue and profit recognition, enabling RM9 million to be recognised as the group's share of profit from its Malaysian JVs versus a loss of RM5.3 million in 2QFY17," it noted.

EcoWorld said its international JV, Eco World International Bhd (EWI), is also expected to turn profitable in the second half of this year when projects undertaken by its JVs, namely London City Island and Embassy Gardens, are completed and handed over starting 3QFY18.

For 2QFY18, EWI continued to record a pre-profit recognition loss in contrast to the gain taken up in 2QFY17, largely due to the effect of foreign exchange movements, EcoWorld added.

EcoWorld shares ended the morning session down one sen or 0.81% at RM1.23, with 35,300 shares done, bringing a market capitalisation of RM3.65 billion.