EcoWorld Malaysia achieved Profit After Tax (PAT) of RM203.4 million
EcoWorld International achieved PAT of RM190.3 million

KUALA LUMPUR: Eco World Development Group Berhad (EcoWorld Malaysia) and Eco World International Berhad (EcoWorld International) announced their results for the 4Q FY2019. For the full financial year 2019, EcoWorld Malaysia achieved PAT of RM203.4 million while EcoWorld International’s PAT was RM190.3 million.

Key highlights include the following:

EcoWorld Malaysia

• Revenue and gross profit in 4Q 2019 grew by 96% and 57% respectively, compared to 4Q 2018. This is due to higher percentage of completion and higher sales secured by ongoing projects of the Group’s subsidiaries such as Eco Majestic, Eco Forest, Eco Sanctuary and Eco Sky in the Klang Valley, Eco Botanic, Eco Spring, Eco Summer, Eco Business Park I, Eco Business Park II, Eco Tropics and Eco Business Park III in Iskandar Malaysia and Eco Meadows in Penang.

• The Group’s share of the results of its Malaysian joint-ventures increased by 355% in 4Q 2019 compared to 4Q 2018. The increase is the result of stronger sales as well as greater progress of works achieved by Eco Grandeur, Eco Business Park V, Eco Horizon, Eco Ardence and Bukit Bintang City Centre (BBCC).

• The Group’s Cash position, Gross and Net gearing continued to improve. As at 31 October 2019 the net gearing position is 0.70 times as compared to 0.77 times at the end of the previous financial year. Shareholder’s funds now stands at RM4.538 billion with net asset per share having increased steadily from RM1.47 for FY2018 to RM1.54 for FY2019.

• EcoWorld Malaysia’s effective stake in the future revenue of its subsidiaries and joint ventures as at 31 October 2019 remains high at RM5.16 billion, which gives good earnings visibility.

EcoWorld International

• PAT of RM118.8 million was recorded in 4Q 2019, a substantial increase as compared to PAT of RM12.8 million reported for 4Q 2018. This strong performance is due to higher recognition of revenue and profit by its joint venture projects in the United Kingdom (UK) following completion and commencement of handover of open market sale units sold to customers as well as revenue and profit recognition of EcoWorld London’s Built-to-Rent (“BtR”) sales.

• The Group’s joint-ventures recorded total revenue of RM3,758.50 million during the year, of which the Group’s effective share (unconsolidated) amounted to RM2,661.75 million.

• EcoWorld International’s effective stake in the future revenue of its subsidiaries and joint ventures as at 31 October 2019 also remains high at RM5 billion with excellent near-term earnings visibility from sizeable handover of properties in both UK and Australia.

The strong performance achieved in FY2019 will help sustain earnings growth momentum and contribute towards both companies’ aim to be in a position to declare their first dividend in FY2020.

Comments on EcoWorld Malaysia’s performance for FY2019 and prospects for FY2020

Dato’ Chang Khim Wah, President & CEO of EcoWorld Malaysia said: “The extremely strong results for this financial year, with every component from Revenue to Gross Profits, Share of results of joint-ventures (both local & international) as well as PBT and PAT registering marked increases, demonstrates the depth and resilience of our business.”

“Team EcoWorld’s agility in adapting to changes in the market place to overcome the many challenges of the past two years has enabled us to substantially strengthen our balance sheet. This is evidenced in the growth of our net assets per share to RM1.54 and reduction in net gearing to 0.70 times.”

“Our early investment in the digital space has also exponentially increased our market reach and yielded much greater intelligence on customer requirements and aspirations. This enabled us to plan more effective campaigns that truly resonate with our target customer base as well as new products and services which they really need and want.”

Among the campaigns and initiatives unveiled by EcoWorld Malaysia this year are:
• Life@EcoWorld encompassing the Group’s ongoing efforts to provide a wide range of holistic services and amenities carefully curated to suit the lifestyles of the specific customer base at its various projects.

• #SENANGjer campaign to communicate to young Malaysians, especially Bumiputra purchasers, on the benefits and ease of owning an EcoWorld property. This is in light of the attractive packages offered by the Group in conjunction with the Home Ownership Programme with EcoWorld (HOPE) launched at the start of the year coupled with the various incentives available under the Government’s National Home Ownership Campaign (NHOC).

• On the product front ErgoHomes @ Eco Forest provided an innovative new take on terrace living offering customisable internal spaces, communal and private gardens at an affordable price point.

• EcoWorld also introduced its Design2Own app to empower customers to co-create the internal layout of their dream home thereby increasing options available to cater to a wider target audience.
FY2019 also saw the largest number of completions and handover of properties sold by the Group. A total of 5,763 units comprising 3,367 landed homes, 1,844 apartments, 429 commercial and 123 industrial units were handed over during the year. Since FY2016 more than 16,400 properties have been delivered to customers with high occupancy rates achieved which have resulted in thriving EcoWorld communities being established in the Klang Valley, Iskandar Malaysia and Penang.

All of the above contributed to EcoWorld Malaysia’s RM2.7 billion sales achieved in FY2019. Sales momentum picked up noticeably with a monthly average of RM383 million sales recorded in the final two months of the financial year vs an average of RM284 million per month from March – August 2019 following the official launch of the NHOC.

“This is a very encouraging trend which sets us on a good path towards achieving the RM6 billion combined 2-year sales target set for FY2019 & FY2020,” said Chang.

Moving into FY2020, EcoWorld for Generations was launched to communicate the Group’s ability to offer a product to suit the needs of every generation, both from a demographic and psychographic (i.e. based on shared interests, lifestyles, passions) standpoint. The Group will also be introducing a new range of homes priced from RM300,000 – RM450,000 soon to take advantage of the excellent infrastructure and lifestyle amenities already in place at its various projects. This new brand will provide a greater element of choice to customers to decide how they want to live to further extend and broaden the Group’s market appeal and set it on a strong and sustainable growth path in the years ahead.

Comments on EcoWorld International’s performance for FY2019 and prospects for FY2020

Dato’ Teow Leong Seng, President & CEO of EcoWorld International said: “EcoWorld International crossed another major milestone this year when we handed over the 1,000th private residential unit to our purchaser. The timely completions of Block A05 of Embassy Gardens (EG) and Block E of London City Island (LCI), in the fourth quarter of FY2019 enabled us to record more than RM100 million increase in PAT as compared to the same period last year. This contributed strongly to the RM190.3 million PAT we were able to achieve for the full financial year 2019.”

As at 31 October 2019, the Group has five projects that have commenced handover (LCI, EG, Kensal Rise, Millbrook Park, and Aberfeldy Village) and keys to 1,141 residential units have been delivered to its purchasers.

“We are also very pleased that the rate of contract completion has been well within our expectations. In addition, occupancy of units handed over at London City Island and Embassy Gardens continue to exceed 90%. This clearly demonstrates that our emphasis on placemaking at all our projects have resulted in highly liveable enclaves with good quality properties that are able to match the exacting standards of Londoners and the international community residing there.”

On the sales front, EcoWorld International recorded RM1.123 billion sales in FY2019. Sales rate of the Group’s higher-end products in London is still being affected by the ongoing Brexit-related uncertainties.

However, there are signs that this segment of the market may have bottomed as the house price index of Inner London rose 2.6% in September 2019 from the trough in March 2019.

“Apart from the recovery we are seeing at the upper end of the London property market, our mid-mainstream products continued to deliver strong performance, as evidenced by the 67% rise in sales of products priced from GBP500 psf to GBP800 psf in FY2019. Our Built-to-Rent business is also progressing well, with profit recognition having commenced on the two parcels sold to Invesco Real Estate last year and numerous enquiries from other institutional investors which we expect to be able to progress with, once greater clarity is obtained on the Brexit timeline.”

The property market sentiment in Sydney and Melbourne also continue to recover. Various market observers have reported improved activities and positive price growth over the past several months. This augurs well for the Group’s operation in Australia and the timing of recovery could prove to be opportune for the planned launch of Macquarie Park, currently scheduled for FY2021.

“Based on the improving market outlook, we are maintaining our combined 2-year sales target of RM6 billion earlier announced for FY2019 and FY2020. Apart from riding on the recovery of the general London, Sydney and Melbourne markets to secure more open market sales, we will continue to pursue sizeable Build-to-Rent deals in the UK to achieve the sales target.”

The Group will also work towards delivering Wardian, West Village, Yarra One and the last residential block in London City Island in FY2020. This will enable a significant portion of the RM5.0 billion effective share of future revenue to be translated into revenue and profits from joint ventures in FY2020 thereby sustaining the earnings growth momentum of the Group in the new financial year.

Comment from Tan Sri Liew Kee Sin, Chairman of EcoWorld Malaysia

“The outstanding results announced by both EcoWorld Malaysia and EcoWorld International today speaks volumes about the strength of the EcoWorld brand and the customer following we have been able to garner not just in Malaysia but also in the United Kingdom and Australia. On a combined basis,EcoWorld Malaysia and EcoWorld International’s effective share of future revenue from locked-in sales as at 31 October 2019 is RM8.8 billion and to date we have handed over more than 17,500 properties to our customers in Malaysia and the United Kingdom after only six years in operation.”

“That these remarkable outcomes have been achieved amidst the most turbulent times for the property sector in every market we operate in is a strong testament to the creativity, resilience and agility of Team EcoWorld. I am confident that our team’s tenacity and never-say-die attitude will continue to power us on to overcome every challenge and make the most of every opportunity in the years ahead.”