Eco World Development earnings up 76%

Property developer’s revenue rises 12% to RM2.03bil

PETALING JAYA: Eco World Development Group Bhd (EWM) posted a 76% jump in net profit to RM175.94mil for the nine-month period ended July 31 on the back of a 12% higher revenue of RM2.03bil.

The property developer maintained the better year-to-date results despite its third-quarter (Q3) profit being weighed down by finance costs and a share of initial losses in relation to joint ventures (JVs) and associated firms.

In its interim financial report to Bursa Malaysia yesterday, EWM said its Q3 net profit was 41% lower at RM26.09mil due partly to finance costs incurred on new term loans taken to fund the investments in and advances to JVs and associated companies.

Another reason for the drop was an RM11.75mil share of the initial losses incurred by JV companies – Eco World International Bhd (EWI), Eco Grandeur Sdn Bhd, Eco Ardence Sdn Bhd and BBCC Development Sdn Bhd – pending the start of profit recognition from its property development.

However, revenue for the quarter was 5% higher at RM762.92mil compared with the same period last year due to a higher percentage of completion compounded by a higher number of sold units.

EWM noted that the higher year-to-date earnings were largely due to the inclusion of a gain on dilution of equity interest in wholly-owned Paragon Pinnacle Sdn Bhd, which arose in the first quarter of financial year 2017 (FY17) after the Employees Provident Fund took a 40% stake.

Paragon Pinnacle is the developer of the 1,400-acre Eco Grandeur mixed residential and commercial development and 518-acre Eco Business Park V in Kuala Selangor.

The company also said that up to Aug 31, year-to-date group sales amounted to RM2.39bil, 9% higher than the RM2.20bil achieved in the corresponding period in FY16.

EWM’s 27%-owned associate firm EWI, which was listed in April and has development projects in London and Sydney, also reported its Q3 results yesterday.

It announced a lower loss attributable to equity holders of RM24.2mil in Q3 compared with a loss of RM46.4mil a year earlier, achieved on a revenue of RM97,000 versus RM288,000 previously.

EWI said the lower loss was mainly due to unrealised foreign-exchange differences as a result of the appreciation in the exchange rate of the pound in the quarter.

“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,” it noted.

The group’s revenue for the quarter came about from fees for marketing services rendered by a subsidiary of the group’s JV in respect of property sales of its projects in the United Kingdom.

For the nine-month financial period to July 31, EWI slashed its loss by 67% to RM55.08mil on 8% lower revenue of RM461,000.

In a separate filing with the exchange, EWI said Datuk Heah Kok Boon had resigned as its non-executive director effective yesterday to focus on his executive role in EWM. Heah is an executive director and chief financial officer at EWM.

Meanwhile, EWM executive director Datuk Voon Tin Yow has been appointed as EWI non-executive director.