KUALA LUMPUR: Better property sales has boosted Eco World Development Group Bhd's (EWDG) fourth quarter profits ended October 2017 to rise 14.85 per cent to RM33.71 million from RM29.35 million a year ago.
Projects contributed to fourth quarter profits are Eco Majestic, Eco Sanctuary and Eco Sky in the Klang Valley, Eco Botanic, Eco Spring, Eco Summer, Eco Business Park 1, Eco Tropics and Eco Business Park III in Iskandar Malaysia as well as Eco Meadows and Eco Terraces in Penang.
Revenue for the quarter rose 16.87 per cent to to RM899.02 million, higher than RM740.99 million, previously.
EDWG's higher fourth quarter revenue is bumped up by higher percentage of completion achieved by the projects, compounded by a higher number of sold units having attained the criteria for profit recognition.
However, profits could have been higher if not for lower margin products (Rumah Mampu Milik and Rumah Selangorku) launched last year in compliance with the government’s regulations on affordable housing.
EDWG's chief executive officer Datuk Chang Khim Wah said his team, in Malaysia, succeeded in achieving its RM4 billion sales target in the year ended October 2017.
Together with the RM2 billion sales recorded by Eco World International Bhd (EWI), sales achieved in the year ended October 2017 by its subsidiaries and joint-ventures totalled RM6 billion.
"This is the third consecutive year EcoWorld Brand sales have exceeded the RM6 billion mark," he told reporters at a briefing here today.
Asked on outlook for the current year ending October 2018, Chang said EWDG is determined to achieve RM3.5 billion in sales, while acknowledging the challenging real estate market.
"Key to achieving our sales target is having the right product in strategic areas and being innovative. We'll continue to enhance security, infrastructure and amenities such as schools and healthcare facilities for home buyers," he said.
Also present at the briefing was EWI president and chief executive officer Datuk Teow Leong Seng.
With unbilled property sales of RM6.4 billion as of October 2017, Chang said the group continues to focus on existing projects in Penang, Johor Baru and in the Klang Valley.
He said sales in the UK remain steady with continuing interest in all three ongoing projects despite Brexit uncertainties.
"This demonstrates the underlying strength of the London residential market," he said.
"This year, EWI is on track to hand over two blocks within the London City Island project and one block of Embassy Gardens.
Underlying demand for residential units in London remains strong fuelled by the economic strength of the UK and high employment rates," Teow said.
Today, EWI announced narrowing of losses in its fourth quarter ended October 2017 to RM32.56 million from RM55.06 million, a year ago.
The narrowing of losses was due to strengthening of the British Pound and savings on finance cost following full settlement of group borrowings upon receipt of initial public offering proceeds in April 2017.
EWI's fourth quarter revenue ended October 2017 fell to RM27,000 from RM183,000 previously.
The revenue drop was due to fees for marketing services rendered by a subsidiary to the Group’s joint venture in respect of property sales of its projects in the UK.
Teow explained EWI is still booking losses because profits from property sales in the UK and Australia can only be reflected upon completion of projects.
On outlook for the current year ending October 2018, Teow said he is hopeful of EWI garnering RM2 billion in sales (excluding sales from its new joint-venture with Be Living).
Today, EWI formalised its deal with UK-based Willmott Dixon Holdings Ltd's property development arm Be Living Holdings Ltd to jointly develop 12 sites in Greater London and the South East of England to a tune of £2.6 billion.
The partnership will see EWI buying into 70 per cent of Be Living.
Upon completion of the acquisition of its 70 per cent stake in Be Living’s residential development business and the new project in Macquarie Park, Teow said EWI will have nine projects in the UK (with the possibility of adding on another six sites from the Be Living Stage 2 acquisitions) and three projects in Australia.