EcoFirst's 1Q earnings down 43% as revenue falls

KUALA LUMPUR (Oct 26): EcoFirst Consolidated Bhd's net profit for the first quarter of financial year 2017 fell 43% to RM1.33 million from RM2.34 million in the corresponding quarter last year, as revenue contracted.

For the three months ended Aug 31, 2016, EcoFirst's revenue declined 25% year-on-year to RM17.54 million from RM23.33 million, the group's bourse filing today showed.

Revenue for the quarter came mainly from the group's Upper East @ Tiger Lane project in Ipoh, Perak, and the recurring income of two malls, i.e. the South City Plaza in Seri Kembangan, Selangor, and the 1Segamat Mall in Segamat, Johor.

"The 529 units [of] luxury condominiums at the Upper East project has progressed according to schedule and contributed to 62% of the group's revenue, with RM2 million profit before tax (after finance cost) to the group's results," said EcoFirst.

With the Upper East project targeted to be completed by February 2017, EcoFirst said contribution from the project is expected to be significant in the ensuing period as billings increase and additional sales are targeted.

"Rental income derived from operating its two retail malls will also continue to substantially contribute to EcoFirst's income," it said.

1Segamat Mall will continue to contribute to its performance in FY17 until the sale of the mall is completed in the last quarter of that financial year, it added. The mall is in the midst of being sold to Hektar Real Estate Investment Trust for RM104 million.

Meanwhile, it updated that development of the group's new land bank in Ampang Ukay (totalling 62 acres now, with another 25 acres pending completion) has commenced with Phase 1, known as Liberty Arc@Ampang Ukay.

"Construction on site has started with earthworks already completed whilst piling is now in progress. Sales launch for the SOHO units is expected to be in November 2016 and profit contribution is expected to come on stream in the second half of the financial year," it added.

At market close today, EcoFirst's share price gained one sen or 3.8% to settle at 27.5 sen, valuing the group at RM216.85 million. — theedgemarkets.com