• Loss is partly due to fewer handovers of properties sold in Australia in the current quarter.

KUALA LUMPUR (Sept 14): Eco World International Bhd (EcoWorld International) today announced a loss before tax of RM55.45 million in 3Q2022 compared to profit before tax of RM10.33 million in 3Q2021.

According to a media release on the results, EcoWorld International stated that the loss is partly due to fewer handovers of properties sold in Australia in the current quarter.

“Profit margins on several ongoing projects in the United Kingdom have also been revised due to increase in costs as the Covid-19 pandemic and wider economic headwinds have caused supply chain challenges, longer construction timeframe, delay in completions and price inflation,” said EcoWorld International.

Meanwhile, the group also revealed that its balance sheet continues to strengthen as the strategy of monetising its assets “records steady progress”.

“This is evidenced by the significant reduction in the group’s gross and net gearing levels to 0.20 times and 0.07 times respectively, as at July 31, 2022,” it said.

EcoWorld International has total sales plus reserves of RM2.090 billion as at Aug 31, 2022, which is 58% more than RM1.326 billion recorded in the same period of FY2021.

“Embassy Gardens and London City Island remain the biggest contributors to sales and reservations, with RM625 million and RM345 million recorded respectively.

“The launch of New Road Triangle in London in August 2022 also contributed RM268 million, following the en-bloc sale of the project’s open market as well as affordable housing components,” said EcoWorld International.

Property sales activities in the UK and Australia “have generally improved compared to FY2021, however, markets remain challenging with cost increases exceeding house price growth”, it added.

“Our 10-month sales and reserves of more than RM2 billion is broadly in line with our sales target and substantially higher than what was achieved in the same period last year. The sustained demand for our properties has contributed to the good progress made on our monetisation strategy of selling our completed stocks to accelerate cash build-up. “Accordingly, we are well-positioned to be able to meet our pledge of returning a portion of the excess cash generated to our shareholders within the next one to two years,” said president & CEO, Datuk Teow Leong Seng.

Leow also noted that on the expansion front, EcoWorld International is reassessing the development plans of future launches and “will continue to be very selective as we evaluate potential opportunities for land acquisition… given the highly fluid operating environment ”.

“Whilst this does limit the group’s development activities in the near term, continued prudence is necessary given the macroeconomic uncertainties,” he explained.

“Meanwhile, as we focus on realising the value of our remaining completed stocks in London and Australia, we will be generating substantial cash reserves. Based on what has been achieved to date, which is reflected in our low net gearing of only 0.07 times, we expect to turn net cash positive by early FY2023.

“This will place us in good stead to be able to take advantage of any attractive landbanking opportunities that may emerge once the market enters recovery mode and inflationary pressures as well as supply chain issues normalise,” Teow added.

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