EcoWorld Malaysia in its Q3 financial report said the group is well on track to exceed its full year sales target of RM3.5 billion, with RM3.44 billion sales recorded in 10 months. Revenue of RM444 million was 1.1% lower than 3Q 2021 however gross profit of RM104.3 million was 22.1% higher. This is due to the improvement in gross profit margin to 23.5% in 3Q 2022 vs 19% in 3Q 2021.
The Group’s share of the results of its Malaysian joint ventures (JV) of RM27.2 million was higher by 123.5% as compared to 3Q 2021, driven by higher site progress and realisation of cost savings of completed and near completion phases. EcoWorld Malaysia recorded a share of loss of RM12 million in Eco World International Berhad (EcoWorld International) in 3Q 2022. This was due to lower profit contribution from Australian projects following substantial handovers in FY2021 and revision of profit margins on JV projects in the United Kingdom in 3Q 2022.
Notwithstanding the loss, the developer recorded RM46.4 million Profit After Tax (PAT) which is 32% higher than the preceding year due to strong PAT growth of 96% by the Group’s Malaysian operations. This brings the cumulative 3Q YTD (9 months) 2022 PAT to RM155.4 million.
EcoWorld attributes the higher PAT in 3Q 2022 to Malaysian operations due to, improvement in gross profit margins, and increased contributions from local JVs, further cost savings achieved on selling & administrative expenses, and reduced finance costs as borrowings were steadily pared down.
The balance sheet also continues to strengthen as at 31 July 2022 as evidenced by the reduction of Gross and Net gearing levels to 0.55 times and 0.35 times respectively, and a reduction in Bank Borrowings to RM2.6 billion vs RM2.9 billion at the start of FY2022 and an increase in Cash and Bank balances to RMM954.3 million vs RM784.7 million at the start
of FY2022. The Group’s near-term earnings visibility has also improved with Future Revenue increasing to RM4.2 billion as at 31 August 2022.
Based on this the Board has declared a 2nd interim dividend of 1 sen per share in the current quarter. This brings total dividends declared to date for FY2022 to 3 sen per share.
The Group had a great three months from June to August 2022 which saw sales increasing by RM1.27 billion. As a result, we managed to reach 98% of our full year sales target in just 10 months of FY2022,” said Dato’ Chang Khim Wah, President & CEO of EcoWorld Malaysia.
“Every region and market segment performed well. Projects in the Klang Valley recorded RM660 million, Iskandar Malaysia contributed RM445 million and Penang achieved RM165 million in sales during the 3-month period,” he mentioned.
