Eco World Development has made the announcement of its results for 2Q 2022 today. The company has recorded RM2.170 billion sales in seven months of FY2022 which places it well on track to achieve the full year sales target of RM3.5 billion. While Revenue in 2Q 2022 was higher than in 2Q 2021 by 20.6%, whilst gross profit in 2Q 2022 was higher than in 2Q 2021 by 54.8%. While Gross profit margin also improved to 23.1% in 2Q 2022 vs 18.0% in 2Q 2021 as measures implemented to increase efficiency and control costs enabled savings to be realised.
Share of results from joint ventures (JVs) were lower due to, higher proportion of near completed properties sold and cost savings realised last year on matured phases at Eco Ardence and Eco Grandeur which contributed to the higher share of results from Malaysian JVs of RM38.6 million in 2Q 2021 vs RM16.3 million in 2Q 2022; and share of loss of RM15.6 million in Eco World International Berhad (EcoWorld International) in 2Q 2022 vs share of profit of RM9.5 million in 2Q 2021. This was mainly due to an impairment loss recognised by EcoWorld International on its EW-Ballymore JV in London, revision of project profit margins, higher inventory holding costs and fewer handovers of properties to its customers in 2Q 2022.
Despite recording a loss in 2Q 2022, EcoWorld International is on track to meet its sales target of RM2 billion, with sales and reservations totalling RM1.5 billion achieved in seven months of FY2022. Further, with its project level bank borrowings on its Australian projects and EW-Ballymore JV fully repaid, EcoWorld International reiterated its intention to repatriate a portion of the substantial cash it expects to generate from the monetisation of its completed stocks for distribution to its shareholders within the next 1-2 years.
Meanwhile, the company’s Profit After Tax (PAT) increased by 8% in 2Q 2022, even after taking up its share of EcoWorld International’s loss. This was on the back of PAT contributed by its Malaysian operations which grew by 86.7% to RM61.2 million in 2Q 2022 vs RM32.8 million in 2Q 2021.
Its cash and bank balances increased to RM904.4 million whilst Net Borrowings and Net Gearing reduced to RM1.7 billion and 0.36 times as at 30 April 2022. Future Revenue remains high at RM3.9 billion as at 31 May 2022 giving good near-term earnings visibility. EcoWorld Malaysia has declared a 2 sen interim dividend in the current quarter.
