KUALA LUMPUR (March 20): Eco World International Bhd (EWI) returned to the black with a net profit of RM182,000 for the first quarter ended Jan 31, 2024 (1QFY2024), after nine consecutive quarters of losses. 

The group, which mainly develops real estate in the UK and Australia, posted a RM30.82 million net loss in the previous year’s corresponding quarter. 

EWI told Bursa Malaysia that earnings for 1QFY2024 were boosted by foreign exchange gains due to the appreciation of the British pound against the Malaysian ringgit as a result of the repayment of advances made by its joint venture company Ecoworld-Ballymore and the conversion of British pound-denominated bank balances. 

In addition, the group’s finance costs were also lower as it had fully paid off all borrowings by the end of 2023. 

Revenue, meanwhile, jumped 41.6% to RM31.67 million from RM22.37 million previously driven by the sale of higher priced commercial units. 

EWI achieved RM243 million in sales plus reserves of RM203 million, bringing total sales for the first months of FY2024 to RM446 million, with Embassy Gardens being the largest contributor at RM105 million, followed by RM75 million from Wardian and RM20 million from Yarra One. 

According to EWI's president and chief executive officer, Datuk Teow Leong Seng, the group is steadily advancing in its efforts to monetize inventories.

As of Feb 29, EWI holds approximately RM650 million worth of completed and nearly-completed stocks available for sale, with the group's effective share amounting to around RM500 million.

“Sales of completed stocks are estimated to generate excess cash up to RM500 million for the group over 2024 and 2025. 

“The board intends to distribute the excess cash to shareholders and we are seeking approval in our Annual General Meeting next week to undertake a second capital reduction exercise to enable such distribution,” Teow said. 

Looking ahead, Teow cautioned that the ongoing challenges of high living costs and elevated interest rates are suppressing demand from potential homebuyers.

As such, all launches for the remaining sites continue to be put on hold, pending review of their feasibility in view of the ongoing weak sentiment among homebuyers and significant cost inflation. 

“The decision to proceed with launches will be contingent upon an improvement in market conditions, stabilisation of cost pressures, and meeting the expected returns required,” he added. 

Shares of EWI closed up half a sen or 1.47% to 34.5 sen on Wednesday, giving the group a market capitalisation of RM816.17 million.