Shah Alam: Eco World Development Group Berhad (EW Berhad) announced today that for its financial year ending 31 October 2016, the Group had successfully achieved its sales target of RM4 billion with sales in the final quarter of FY2016 exceeding cumulative sales for the first three quarters of the financial year.
The target of RM4 billion for FY2016 was set having regard to expected sales from projects development managed by EW Berhad in Malaysia + 40% of sales achieved by its Bukit Bintang City Centre (BBCC) joint-venture + a proportionate share of sales secured by Eco World International Berhad (EW International).
EW Berhad also saw a 195% surge in its Profit After Tax from RM43.9 million in FY2015 to RM129.3 million in FY2016. During the 12 months ended 31 October 2016, the Group achieved Profit Before Tax (PBT) of RM193.2 million on the back of revenue totalling RM2,546.4 million. This represents a 161.3% increase in PBT and 48.7% increase in revenue as compared to the preceding year.
Total Gross Sales achieved in Malaysia in FY2016 (including 100% of BBCC sales) amounted to RM3.82 billion whilst EW International recorded sales of GBP441 million (equivalent to RM2.25 billion based on exchange rates as at 31 October 2016). This brings the combined value of total products sold under the EcoWorld brand name in Malaysia and abroad to RM6.07 billion.
"The RM6.07 billion combined Malaysian and International sales achieved in FY2016 caps off another outstanding year for the EcoWorld Group and the third consecutive year in which Team EcoWorld has managed to not just overcome market conditions but also deliver on the challenging targets set,"said Tan Sri Liew Kee Sin, Chairman of EW Berhad.
Liew attributed EcoWorld's ability to consistently meet and exceed its sales targets both in Malaysia and abroad to the Group's strong branding, loyal customer following and the unique value propositions offered by each project launched. He said it also demonstrated Team EcoWorld's execution capability in quickly bringing to market highly sought-after developments which meet the lifestyle needs and aspirations of its target customer base.
Commenting on the sales achieved in Malaysia, Dato' Chang Khim Wah, President & CEO of EW Berhad noted that the total gross sales achieved in FY2016 of RM3.82 billion is 26% higher than sales achieved by the Group in FY2015 of RM3.02 billion
"This remarkable result was made possible only with the unstinting support of our customers who came out in droves at every launch throughout the year and especially during the EcoWorld's Firsts Campaign held in September 2016. We are extremely encouraged by the faith and confidence they have placed in us as many are first time homeowners and upgraders looking for their dream home and we are delighted that they have chosen EcoWorld to create it for them," he said.
The EcoWorld's Firsts Campaign saw the launch of a total of four projects in the Klang Valley, Iskandar Malaysia and Penang offering a diverse range of products designed to meet the business and lifestyle needs of different segments of the property market namely:
- Eco Grandeur on the North-West corridor of the Klang Valley which is a 1,400 acre mass township catering to first-time homeowners and upgrader
- Eco Ardence, a luxury development spread across 534 acres situated just off the Setia Alam - NKVE interchange in Shah Alam;
- Eco Business Park (EBP) II situated within the fast-growing Flagship E zone in Iskandar Malaysia offering world-class green industrial facilities with EcoWorld's innovative Flexi-Space Concept to meet the business needs of SMEs & MNCs;
- Eco Bloom @ Eco Meadows in Penang comprising affordable condominium units with a wide range of lifestyle amenities in addition to the convenience provided by the retail portion of the development situated below.
Sales contributed by the new projects launched as part of the EcoWorld's Firsts Campaign amounted to RM912 million. The Group's ongoing projects and the official launch of BBCC also contributed to the strong numbers recorded in the fourth quarter.
In FY2016, sales in the Klang Valley totaled RM2.473 billion. This massive increase of 57% from the RM1.579 billion recorded in FY2015 was due to ongoing sizeable contributions from both Eco Majestic and Eco Sanctuary as well as the launch of three new joint-venture projects, namely Eco Grandeur, Eco Ardence and BBCC.
The Group's four townships in Iskandar Malaysia namely Eco Botanic, Eco Spring, Eco Summer and Eco Tropics and three business parks (EBP I, EBP II and EBP III) achieved total combined sales of RM1.199 billion in FY2016. This makes it the third consecutive year in which the Group has secured more than RM1 billion sales in Iskandar Malaysia, which is attributable both to EcoWorld's market leadership position and the depth of fundamental demand for landed township and business park products down south.
Contributions from Penang remain relatively small in FY2016 due to the current size of the Group's projects in the Northern region. This is set to increase with the acquisition of 375 acres in June on the Penang Mainland.
Apart from its achievements on the sales front, FY2016 was also notable for EW Berhad as this is the first year the Group handed over properties sold to its customers. The Group's projects in Iskandar Malaysia led the way with the first project to be delivered being EBP I at the start of the year followed by Eco Botanic in September 2016.
"The delivery of vacant possession of properties sold to our customers is a significant milestone for EcoWorld and marks our coming-of-age as a full-fledged developer. We are tremendously excited to welcome our very first purchasers into their homes and business premises and have established brand-new EcoWorld Residence Clubs (EWRC) at our various projects in preparation of this new chapter. Through the EWRC we aim to ensure that our customers receive the very best possible service to make their move into each and every EcoWorld development a delightful experience," said Chang.
On the international front, EW International's projects in the United Kingdom (UK) and Australia also performed well with total cumulative sales of GBP878 million and AUD253 million secured. This is equivalent to RM5.291 billion based on 31 October 2016 exchange rates (RM3.039 billion in FY2015 and RM2.252 billion in FY2016). Upon completion of EW Berhad's subscription for its 27% stake in EW International pursuant to EW International's Initial Public Offering (IPO), the Group will be entitled to recognise a proportionate share of the eventual earnings from the total cumulative sales secured by EW International.
In FY2016, EW International's sales were mainly contributed by its three projects in the UK, namely Embassy Gardens Phase 2, London City Island Phase 2 and Wardian London.
"Despite initial concerns regarding to the impact of the Brexit referendum on demand for UK properties, we are pleased to report that monthly sales achieved by EW International post-Brexit has exceeded monthly sales recorded pre-Brexit by a substantial margin. This demonstrates the inherent appeal of all three of our projects as well as London's resilience and enduring popularity as a global property investment destination," said Dato' Teow Leong Seng, President & CEO of EW International.
Going forward into FY2017, EW Berhad's pro-forma effective share of unbilled progress billings from its subsidiaries, joint-ventures and associates as at 31 October 2016 stands at approximately RM6.02 billion. This takes into consideration corporate proposals announced but not completed in FY2016, namely the proposed entry of the Employees Provident Fund Board as a 40% shareholder of Eco Grandeur and proposed subscription for 27% of the shares in EW International pursuant to EW International's Initial Public Offering (IPO).
The strong sales achieved in FY2016 together with the high level of pro-forma unbilled progress billings attributable to the Group as at 31 October 2016 provides substantial earnings visibility to anchor EW Berhad's growth prospects going forward.
For FY2017, EW Berhad targets to achieve RM4 billion comprising Gross Sales from all Malaysian projects development managed by it (including joint-ventures). In addition to this, it will be entitled a proportionate share of international sales achieved by EW International based on the Group's proposed 27% shareholding in EW International.
Sales from Malaysia will be contributed by EW Berhad's existing 15 projects along with the proposed launch of two new projects, namely Eco Forest in Semenyih and Eco Horizon on the Penang Mainland. On the international front, EW International's sales will continue to be anchored by its existing four projects and post-listing EW International will also be exploring new project acquisitions to continue to grow its development presence and market reach in its countries of focus namely the UK and Australia.
For FY2018, the Group intends to maintain the same target of RM4 billion Gross Sales from Malaysia + a 27% proportionate share of EW International sales.