EcoWorld 1Q profit comes in three times higher on stronger JV profit

This article first appeared in The Edge Financial Daily, on March 29, 2019.
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KUALA LUMPUR: Eco World Development Group Bhd’s (EcoWorld) net profit for the first quarter of financial year 2019 (1QFY19) ended Jan 31, 2019 came in three times higher at RM30.32 million, compared with the RM9.77 million it recorded a year ago, thanks to higher share of profit from its joint ventures (JVs).

Earnings per share rose to 1.03 sen, from 0.33 sen previously, its quarterly results announcement to Bursa Malaysia showed.

Revenue came in at RM491.23 million during the quarter, 5.4% lower than RM519.22 million in the previous corresponding quarter.

Notably, its share of profit from JVs, both locally and abroad, came in at RM24.02 million, versus a share of loss of about RM3 million in the year-ago quarter.

EcoWorld said the main projects that contributed to its revenue and profitability in 1QFY19 were Eco Majestic, Eco Forest, Eco Sanctuary and Eco Sky in the Klang Valley, Eco Botanic, Eco Spring, Eco Summer, Eco Business Park I, Eco Business Park II, Eco Tropics and Eco Business Park III in Iskandar Malaysia and Eco Meadows and Eco Terraces in Penang.

“Revenue recorded by the group’s Malaysian JVs, namely Eco Grandeur, Eco Horizon, Eco Ardence and Bukit Bintang City Centre totalled RM296 million, of which the group’s effective share (unconsolidated) amounted to RM154 million,” it said.

“The international JV Eco World International Bhd (EWI) continued to record profit in 1QFY19, following the commencement of delivery of completed units at London City Island and Embassy Gardens in 4QFY18. This enabled the group to record RM6.1 million as its share of EWI’s profit in 1QFY19, as compared to a share of loss of RM2.7 million in 1QFY18,” it added.

In a media statement, EcoWorld said the group and EWI are keeping to the target of achieving RM6 billion sales each or a combined of RM12 billion over the two financial years of FY19 and FY20, despite a slow start to FY19.

“The quiet period experienced in the first four months of FY19 was not unexpected. Our highly successful #OnlyEcoWorld campaign, which enabled the group to record RM1.9 billion sales in the final four months of FY18, ended on Oct 31, 2018. There was also a temporary lull in buying activities after the National Home Ownership Campaign (NHOC) was announced on Nov 2, 2018, as buyers took the time to check out the best deals available in the market,” said EcoWorld president and CEO Datuk Chang Khim Wah.

“We are pleased to note, however, that following the launch of the NHOC on March 1, 2019, sales have picked up again,” Chang said on prospects for the year.

EcoWorld’s share price declined by 0.5 sen or 0.55% to 90 sen yesterday, with a market capitalisation of RM2.65 billion.