PETALING JAYA: Eco World Development Group Bhd’s (EcoWorld) net profit for the third quarter ended July 31, 2017 fell 41.47% to RM26.09 million from RM44.58 million a year ago due to finance costs and share of initial losses incurred by joint venture (JV) companies.
In a filing with Bursa Malaysia yesterday, EcoWorld said it incurred finance costs during the quarter on new term loans taken to fund the investments in and advances to JV and associated companies.
The lower profit was also due to a share of the initial losses incurred by JV companies namely Eco World International Bhd (EWI), Eco Grandeur, Eco Ardence and BBCC pending commencement of property development profit recognition.
Revenue for the quarter rose 4.89% to RM762.92 million from RM727.34 million a year ago due to a higher percentage of completion compounded by a higher number of sold units having attained the criteria for profit recognition.
For the nine months ended July 31, 2017, net profit rose 76.07% to RM175.94 million from RM99.93 million a year ago while revenue rose 12.2% to RM2.03 billion from RM1.81 billion a year ago.
During the quarter, EcoWorld achieved RM772 million in sales from its domestic projects, 40% higher than the RM552 million achieved a year ago. Up to Aug 31, 2017, its year-to-date sales amounted to RM2.393 billion, 9% higher than the RM2.202 billion achieved a year ago.
The group said it remains well-positioned to achieve its sales target of RM4 billion from domestic projects for financial year ending Oct 31, 2017 based on upcoming launches of three new projects namely Eco Forest, Eco Business Park V and Eco Horizon.
The group’s unbilled sales as of Aug 31, 2017 stood at RM6.22 billion. It has a total of 5,426.6 acres of undeveloped land.
Meanwhile EWI, EcoWorld’s 27%-owned JV, narrowed its net loss in the third quarter ended July 31, 2017 to RM24.2 million from a net loss of RM46.41 million a year ago mainly due to unrealised foreign exchange differences as a result of appreciation in exchange rate of the British pound during the quarter.
Revenue fell 66.32% to RM97,000 from RM288,000 a year ago. EWI said revenue and profits associated with the group’s property development activities will be recognised by its subsidiary and JV when the construction of the relevant units are completed and delivered in the first half of 2018.
For the nine months ended July 31, 2017, net loss narrowed to RM55.08 million from RM165.03 million a year ago while revenue fell 7.8% to RM461,000 from RM500,000 a year ago.
EWI achieved RM1.56 billion worth of sales in the first 10 months of the financial year, of which RM1.5 billion were locked-in during the first three quarters of the financial year. Total cumulative sales rose to RM7.26 billion as at Aug 31, 2017 due to the strengthening of the British pound and Australian dollar against the ringgit.
The group’s share of cumulative unbilled sales as at Aug 31, 2017 amounted to RM5.68 billion. For the remaining two months of the financial year, EWI said it will work towards achieving its sales target of RM2.5 billion with several international roadshows planned to promote its UK projects.
EcoWorld’s share price rose 0.63% or 1 sen to close at RM1.59 yesterday with a total of 330,500 shares traded, giving it a market capitalisation of RM4.68 billion.
EWI’s share price rose 0.93% or 1 sen to close at RM1.09 yesterday with a total of 363,400 shares traded, giving it a market capitalisation of RM2.59 billion.
Source: The Sun Daily