EcoWorld International’s 1Q net loss narrows to RM14.66m, records 68% higher sales

KUALA LUMPUR (March 17): EcoWorld International Bhd (EWI) narrowed its net loss to RM14.66 million in the first quarter ended Jan 31, 2022 (1QFY22) from RM56.26 million in 4QFY21 mainly due to lower share of losses in its joint venture.

The group also attributed the lower net loss to higher contributions from West Village and Yarra One, which were partially offset by lower realised and unrealised gain on foreign exchange and other income.

Earnings per loss was trimmed to 0.61 sen from 2.34 sen in the immediate preceding quarter, EWI’s filing with the bourse on Wednesday (March 16) showed.

Quarterly revenue climbed 41.73% quarter-on-quarter to RM49.24 million from RM34.75 million.

On a year-on-year basis, the group sank into the red compared with a net profit of RM56.03 million in 1QFY21 mainly due to lower revenue and profit recognition from Yarra One and West Village as fewer sold units were handed over during the period. Meanwhile, the company’s revenue tumbled 83.76% from RM303.28 million previously.

EWI said the group’s sales in the first four months of FY22 were 68% higher than the sales recorded in the same period in FY21. In addition, it delivered RM685 million sales based on contracts exchanged in the first four months of this year.

According to the group, it also has a strong reservation pipeline of RM393 million — total sales including reserves as at Feb 28, 2022 adds up to RM1.077 billion.

Whilst the near-term market outlook continues to be challenging, with concerns regarding the potential escalation of the current Russia-Ukraine conflict compounding supply chain constraints and fears of rising inflation rates, EWI said it has certain inherent advantages.

“EcoWorld International had a good start to FY22 as the attractive incentive packages being offered to customers led to a resurgence in buying interest particularly for our London City Island and Embassy Gardens projects. Local demand in Australia has also been recovering steadily which contributed to the RM685 million sales secured in the first four months of this financial year,” said President and CEO Datuk Teow Leong Seng in a separate statement.

The company’s projects in Australia are fully completed while its major projects under the EcoWorldBallymore joint venture are very close to achieving full completion, he noted.

“The impact of an inflationary environment could therefore favour us as our selling prices stand to benefit from rising property prices while our costs on the completed and near-completed projects are largely shielded from inflationary pressure.

“We do however acknowledge the uncertain market environment caused by rising geo-political tensions — against such a backdrop the strategic decision we made at the end of 2021 to accelerate cash recoupment via the sale of our completed units, remains very sound,” said Teow.

Teow added that the group will continue to see good interest from investors, both institutional and retail, for its projects in the UK and Australia.

“This includes several large offers which we are currently assessing. Should we decide to proceed with these offers, our plans to repatriate the capital which we have invested in our completed projects could be accelerated,” Teow commented.

Teow reiterated that it remains the board’s intention to sell the remaining units in the EcoWorldBallymore and Australian projects in the next two to three years with a key goal of making further distributions to shareholders after setting aside a portion of the capital recouped from these completed projects to be reinvested for future growth.

He also mentioned that the group’s other UK joint-venture, EcoWorld London, had successfully obtained the planning permission for its Woking site located in Surrey, which has an estimated gross development value of around £350 million (RM1.92 billion) .

Management is targeting to finalise the development programme and launch the project by late calendar year 2022 if market conditions are conducive.

The launch of Woking will mark the EWI’s maiden expansion beyond the city of London in the UK.

EWI shares closed unchanged at 42 sen, with a market capitalisation of RM1.01 billion.

Edited by Lam Jian Wyn

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