Maybank IB noted the losses deepen for Eco World International but sales, however, came in above, in the property developers’ latest earnings report.
The 4QFY22 core net loss of RM54m widened and was higher than expected said the house, FY22 property sales of MYR2.16b were however above expectations, As for 2023, the management has set a lower sales goal of MYR1.4b.
Excluding RM42m one-off losses (forex and impairment losses), Ecoworld’s 4QFY22 core net loss of RM54m took FY22 core net loss to RM156m (FY21: MYR99m core net profit). This was 77%/56% above the consensus for FY22 net loss forecasts. Maybank suspects the variance in losses was due to the lower-than-expected profit margin at Embassy Garden and higher-than-expected finance costs.
With the securing of RM2.16b new property sales for the year or 8% above its RM2b sales goal, the group has actually set a lower sales target of RM1.4b for 2023 due to “zero” new launches. Given ongoing macroeconomic uncertainties, the developer’s focus will remain on cash preservation and clearing its completed stocks noted the research house.
In view of this latest development, Maybank is raising its FY23/24 loss projections by 3.9%/82.2% after it noted on the delaying of launches in Macquarie Park, Sydney, and projects under EcoWorld London.
