Eco World De­vel­op­ment earn­ings up 76%

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

The Star Malaysia - StarBiz - - Front Page - By M. HAFIDZ MAHPAR hafidz@thes­tar.com.my

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.

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