KUALA LUMPUR: Eco World Development Group (EcoWorld Malaysia) and Eco World International Bhd (EcoWorld International), which are targeting to achieve RM12 billion combined sales over two financial years FY2019 –FY2020, are expected to achieve better earnings in FY2019 compared with FY2018 with its high unbilled sales.
EcoWorld Malaysia chairman Tan Sri Liew Kee Sin said EcoWorld Malaysia registered RM3.1 billion sales in FY2018 while EcoWorld International recorded RM3.3 billion sales.
Prospects of both companies are undergirded by the record high levels of locked-in progress billings of RM6.44 billion (EcoWorld Malaysia) and RM6.62 billion (EcoWorld International) respectively as at Oct 31, 2018, which provides clear earnings visibility for FY2019 – FY2020.
This position will be further strengthened by additional sales achieved in FY2019 especially after EcoWorld Malaysia kicks off its HOPE campaign and additional en-bloc sales to institutional investors for another two to three built-to-rent (BTR) sites sealed by EcoWorld International.
“We’ll do better (earnings wise for FY2019), looking at our unbilled sales. We’re the only guy with this unbilled sales, especially EcoWorld International, and we’ve been keeping all this unbilled sales as we can’t recognise it until completion. Now we can finally recognise the completion,” Liew told a press conference here today.
He expects 2019 to be an equally tough year like 2018 with Brexit in the UK, stamp duty issues in Australia, US-China trade war and the uncertainty in Malaysia over policies for investment.
He said Eco World International, which turned profitable in FY2018, has its focus on the UK that comes with a million dollar BTR market.
“We’re going after the UK market, where margins are better. The market is much deeper and stronger despite Brexit,” said Liew.
EcoWorld International is acquiring land in the UK for the BTR business. EcoWorld London already has existing sites with the potential to deliver over 3,000 BTR units, which the group intends to realise over the next two to three years.
For the fourth quarter ended Oct 31, 2018, Eco World Malaysia’s net profit more than doubled to RM68.53 million from RM33.71 million a year ago mainly thanks to its share of results from joint-ventures, against a revenue of RM607.58 million, which was 33% lower compared with RM904.06 million in the previous year’s corresponding quarter.
For the full year period, its net profit fell 21% to RM165.59 million from RM209.65 million a year ago, while revenue fell 26% to RM2.17 billion from RM2.94 billion.
Meanwhile, Eco World International saw a net profit of RM70.08 million for the fourth quarter compared with a net loss of RM32.56 million a year ago, mainly due to recognition of revenue and profit by its joint venture projects in the UK following completion and commencement of handover of units sold to customers. Its revenue also increased significantly to RM4.89 million from RM27,000.
For the full year period, it posted a net profit of RM35.24 million compared with a net loss of RM87.63 million, while revenue went up 10 folds to RM4.90 million from RM488,000 a year ago.
