EcoWorld confident of achieving sales target of RM4 billion for financial year 2016 EPF expresses interest to work with EW Berhad on three development projects
Eco World Development Group Berhad [EW Berhad] today announced that as at 31 May 2016, year-to-date Group sales amounted to RM1.315 billion which has exceeded sales secured during the corresponding period in FY2015 of RM1.187 billion.
Of the total sales of RM1.315 billion achieved up till 31 May 2016, RM687 million came from projects in the Klang Valley, RM583 million came from projects in Iskandar Malaysia and the remaining RM45 million was contributed by projects in Penang.
During the 6 months ended 30 April 2016, the Group achieved a PBT of RM83.0 million on the back of revenue totalling RM1,078.1 million, representing an 256% increase in PBT and 87% increase in revenue as compared to the same period in the preceding year.
Ongoing projects which contributed to the revenue and gross profit achieved included Eco Majestic and Eco Sky in the Klang Valley and Eco Botanic, Eco Spring, Eco Summer and Eco Business Park I, Eco Tropics and Eco Business Park III in Iskandar Malaysia.
“We are encouraged that the Group’s performance has held up strongly despite the challenging market conditions. This shows that demand for well planned, landed, gated & guarded townships with appealing concepts that enjoy good accessibility remains very resilient,” said Dato’ Chang Khim Wah, President & CEO of EWB.
In the Klang Valley, the Group’s Eco Majestic (launched in May 2014) and Eco Sanctuary (launched in June 2015) townships continue to lead the way with cumulative sales of RM1.9 billion and RM989 million, respectively, as at 31 May 2016. At Eco Majestic, the bulk of the bookings received on the Karisma Apartments in February 2016 were successfully converted into sales which boosted the steady performance of its existing launch phases. Similarly, Eco Sanctuary’s launch of its 2 and 3-storey lifestyle shop offices called Eco Somerset in mid-May 2016 further contributed to the good sales results.
In Iskandar Malaysia, the Group’s sales momentum continues to be sustained. Eco Business Park I launched a small parcel of shop offices to complement its cluster and semi-d factories, the first phase of which is being delivered to purchasers. Eco Spring, which will be handing over its first phase of homes in FY2017, launched a small parcel of shop offices known as Eco Palladium. The shop offices at both projects were well received, and upon completion, will add to the commercial vibrancy of their respective sites. More recently, Eco Tropics in Pasir Gudang introduced its second phase of terraced homes in May 2016 to an overwhelming response with more than RM100 million sales secured over a single weekend.
Up north in Penang, where the Group has only two active projects, namely Eco Meadows on the mainland and Eco Terraces on the island, the focus was on selling remaining units from its earlier launches.
“Based on the positive traction gained by the Group’s existing projects along with exciting plans for the rest of the year, we are on track to achieve our ambitious RM4 billion sales target for FY2016,” said Chang.
He shared that sales achieved to-date were contributed by the Group’s 11 ongoing projects following numerous Group-wide and localised marketing campaigns. These include colourful and creative events such as the Seasons Flower Show, Colours of Spring Festival, Yokoso Japan @ BBCC and Hallyu Korea @ Eco Sky which were held from January through to May 2016. The marketing momentum continued in the month of June with group-wide celebrations of World Environment Day and the innovative EWRO Fest, launched in conjunction with the ongoing European Football Championships, which saw each project promote a different European country. All these events successfully drew huge crowds of visitors to the various project sites thereby significantly increasing the Group’s customer database.
For the second half of the financial year ending 31 October, the Group is targeting to officially launch its BBCC joint-venture development at the heart of Kuala Lumpur as well as Eco Business Park II in the Senai Corridor of Iskandar Malaysia. Both these projects are expected to do well based on the encouraging number of registrants and continuing enquiries received.
BBCC will be launching “The Stride” strata offices, a 45-storey block offering medium size individual office suites with premium grade facilities such as a grand lobby, shared meeting and conference facilities and security features. These well-designed suites have garnered extensive interest, particularly from business owners and entrepreneurs currently based around the Bukit Bintang area. Registrants for the strata offices have been drawn to the development’s winning concepts which combine design excellence with world class work, leisure, entertainment and residential offers within a hyper-connected site with multiple transportation options by road and rail.
Following the launch of its strata offices, BBCC will be launching two blocks of serviced residences offering apartments for inner city-living with sizes starting from 450 sq ft upwards. These smaller units are ideal for singles and working professionals seeking a vibrant city lifestyle with conveniences such as public transport connectivity, work, shopping and entertainment right at their doorsteps.
Eco Business Park II will be launching its 4-in-1 industrial / warehousing / showroom / retail cum office lots targeting Malaysian, Singaporean SMEs and MNCs keen to establish their operations in the Senai Corridor of Iskandar Malaysia. This will be the Group’s third business park launch in Iskandar Malaysia.
EW Berhad’s proposed subscription as a strategic investor in Eco World International Berhad (EWI) pursuant to its Proposed IPO is also expected to take place in the 2nd half of FY2016. In this regard, EW Berhad announced that it, together with Tan Sri Liew Kee Sin (Tan Sri Liew), is currently in discussions with a property group to co-anchor the Proposed IPO as strategic investors in EWI.
Dato’ Teow Leong Seng, President & CEO of EWI added that the above-mentioned property group would provide strong synergies with the strategic directions of EWI if they become a strategic investor.
EWI currently has three projects in London and one project in Parramatta, Sydney all of which were launched in 2015. Cumulative sales achieved as at 31 March 2016 from its four existing projects amounted to GBP837 million. Upon completion of EW Berhad’s subscription in EWI, the Group will be able to proportionately recognize the sales secured by EWI.
On the corporate and financial front the Group has also been taking proactive measures to fortify its balance sheet in support of its growth ambitions.
EW Berhad had earlier announced a proposed 25% private placement of shares which will be supported strongly by its major shareholders, Liew Tian Xiong and Sinarmas Harta. The proposed placement will strengthen EW Berhad’s financial position and capital base to help the Group fund its expansion plans as well as bridge the timing gap between the high level of sales locked-in to date and earnings recognition on the properties sold.
The Group’s plans to raise equity at the project level via its partnership for growth business model has also borne fruit following its invitation to the Employees Provident Fund Board (“EPF”) to jointly develop the following lands:
- 2,198.40 acres in Mukim Ijok, District of Kuala Selangor, Selangor to be developed into a township and business park known respectively as Eco Gardens and Eco Business Park V;
- 533.92 acres, next to Setia Alam in Mukim Bukit Raja, District of Petaling, Shah Alam, Selangor, which the Group will be developing into the Eco Ardence township
- 374.5 acres in Batu Kawan Penang which will be developed into two townships, Eco Horizon and Eco Sun
EPF has responded with a letter of expression of interest on a non-binding basis to participate in the joint-development of the above lands subject to conditions contained therein, details of which will be disclosed upon entry of the relevant agreements with the EPF.
“We are delighted that the EPF have expressed their interest to work with us to jointly develop our Eco Gardens & Eco Business Park V projects in Ijok and are also interested in exploring the opportunity to participate in the development of our latest projects namely Eco Ardence in Shah Alam as well as Eco Horizon and Eco Sun in Batu Kawan. We look forward to welcoming the EPF as our development partner and are confident that with their support, the Group will continue to grow from strength to strength,” said Tan Sri Liew Kee Sin, Chairman of EW Berhad.