KUALA LUMPUR (June 27): Eco World International Bhd's (EWI) net loss for the second quarter ended April 30, 2019 (2QFY19) narrowed to RM11.98 million from net loss RM26.46 million a year earlier.

Loss per share was 0.5 sen versus loss per share of 1.1 sen.

For the cumulative six months ended April 30, EWI posted net profit of RM10.78 million compared to net loss RM36.63 million a year earlier.

In a statement today, EWI said that whilst a net loss was recorded in 2QFY19 due to the completion method of earnings recognition adopted in the UK, the firm was on track to record substantially higher profit in the second half of FY19 (2HFY19) as compared to 1HFY19.

It said this is based on the targeted handovers of several additional residential blocks in the next few months mainly by London City Island and Embassy Gardens in the UK, which will enable profits from these sales to be recognised in the upcoming quarters of FY19.

EWI said it recorded RM586 million sales in the first seven months of FY19, a marked increase from the first four months' sales of RM146 million.

The developer said its new EcoWorld London joint-venture's products averaging from £500 psf to £800 psf contributed more than 50% of the sales achieved during this period.

EWI said this demonstrates the resilience of the mid-mainstream London market despite weak overall homebuyers' sentiment and Brexit uncertainties.

Meanwhile, it said EcoWorld London is actively pursuing new build-to-rent (BtR) opportunities to tap into the growing institutional demand for purpose-built BtR developments in the UK and targets to finalise the terms for a sizeable deal before the end of the year.

It said this is expected to contribute significantly towards the achievement of the two-year sales target of RM6 billion set for FY19 and FY20.

Commenting on its prospects, EWI president and chief executive officer Datuk Teow Leong Seng said the strong sales contributions by its new EcoWorld London projects over the last three months validate its strategic decision to venture into the mid-mainstream London residential sector where demand remains robust notwithstanding protracted Brexit headwinds.

"On the financial front, we are also expecting much better results for 2HFY19. Given the completion method of earnings recognition adopted for open market sales in the UK and Australia, profits for EcoWorld International are naturally lumpy.

"As at April 30, 2019, we have delivered 608 private units to our purchasers, the bulk of which took place in 4QFY18 and 1QFY19 — this accounted for the higher profits in those quarters. With several large residential blocks due to be handed over within the next few months, we should be able to recognise the profits from these units sold in 2HFY19," said Teow.

At the midday break today, EWI dipped 0.73% or 0.5 sen to 68 sen for a market capitalisation of RM1.63 billion.