Chang said EcoWorld Malaysia has entered a highly cash-generative phase of each project’s lifecycle.
PETALING JAYA: Eco World Development Group Bhd
(EcoWorld Malaysia) achieved RM3.61bil in sales for the financial year ended Oct 31, 2023 (FY23), exceeding its sales target of RM3.5bil.
In a statement, the group said sales were broad-based, with substantial contributions by each of the group’s four revenue pillars, namely its Eco Business Parks, Eco Hubs, Eco Townships and Eco Rise.
The group said its Eco Business Parks segment recorded RM1.04bil worth of industrial sales during the year, the highest in a single year, with exponential growth achieved over the last four years since FY20.
Its Eco Hubs segment saw RM515mil worth of commercial properties sold in FY23, which was 15% higher than FY22 and 33% above the average annual sales between FY20 and FY22.
EcoWorld Malaysia said it achieved total residential sales of RM2.05bil in FY23 from two revenue pillars, namely Eco Townships and Eco Rise.
“This year, EcoWorld Malaysia recorded RM1.47bil from sales of homes within its Eco Townships that were priced above RM650,000 and RM577mil from homes priced below RM650,000, mainly from the ‘duduk’ series of apartments.”
EcoWorld Malaysia also recorded high net profits from its Malaysian operations in FY23 of RM284.7mil, attributable to higher gross profit achieved and improved interest income earned.
“Net profit from Malaysian operations in the fourth quarter of 2023 (4Q23) amounted to RM92.8mil, largely on par with RM96.7mil in 4Q22.
“As at Oct 31, 2023, the group’s future revenue remains healthy at RM3.49bil, thereby providing clear earnings and cashflow visibility in the near and mid term.”
Additionally, the group said its balance sheet continued to strengthen with FY23 cash balances at its highest (RM1.36bil) and net gearing levels at its lowest in 10 years (0.25 times).
Premised on this, EcoWorld Malaysia declared a final dividend of two sen per share in 4Q23, bringing total dividends declared for FY23 to six sen per share.
In 4Q23, EcoWorld Malaysia said it reviewed the carrying values of its investment in Eco World International Bhd (EWI).
“A further impairment of RM82mil was recognised due to EWI’s reduced number of future projects and continued deferral of new launches; and the higher weighted average cost of capital applied to review the investment in EWI as a result of further increases in UK interest rates in FY23.”
Notwithstanding the impairment and share of EWI’s losses, EcoWorld Malaysia said it recorded a net profit of RM3.3mil in 4Q23.
“The group’s net profit for FY23 (including EWI) is RM189.3mil, 20% higher than FY22.”
Commenting on the group’s performance, EcoWorld Malaysia president and chief executive officer Datuk Chang Khim Wah said FY23 was a significant year for the group, as it marked the company’s 10th year in the industry.
“The group’s Malaysian operations achieved its highest ever profits, growing strongly from an annual average of RM53.7mil in its first three years as a property group to RM284.7mil in FY23.”
Given the maturity of the group’s current development portfolio, Chang said EcoWorld Malaysia has entered a highly cash-generative phase of each project’s lifecycle.
“In addition, future revenue as at Oct 31, 2023 remains healthy at RM3.49bil, providing clear earnings and cashflow visibility in the near and mid term.
“Accordingly, for FY24, the board is maintaining its sales target at RM3.5bil for its Malaysian operations, as the group focuses on sustainable growth by improving absolute returns from its valuable land bank.”
