2018 will be a period of consolidation for EcoWorld

KUALA LUMPUR (Jan 24): Eco World Development Group Bhd will hold off on launching any sizeable projects this year as it focuses on strengthening its balance sheet and consolidating its landbank.

“We have invested a lot in the last five years. This year, half of our investment phase is already over (and) existing projects are starting to return cash,” its president and chief executive officer (CEO) Datuk Chang Khim Wah told reporters on the sidelines of the Invest Malaysia 2018 conference today.

"What this means is that half of EcoWorld’s projects would have exited the investment phase this year, following the completion of the first handovers. By 2019, the projects — which have entered the growth or matured phase — would have increased to 70%.

“This improves both the earnings visibility and cashflow generation potential of the projects, which will in turn bring down the group’s gearing position,” he added. EcoWorld’s net gearing ratio currently stands at 0.71 times.

To date, EcoWorld has 8,126.4 acres in its landbank, 18 ongoing projects and two more in the pipeline.

EcoWorld is targeting sales of RM3.5 billion in the current financial year ending Oct 31, 2018 (FY18), slightly lower than the RM4 billion target for FY17.

Chang said the lower sales target is not due to the slowdown in the property market, rather the anticipated global and local uncertainties this year.

Eco World International Bhd (EWI) president and CEO Datuk Teow Leong Seng said the company will recognise its maiden profits in FY18, following the scheduled handovers of two blocks of apartments at its London City Island Phase 2 project, and one block of the Embassy Gardens Phase 2 project in the UK.

EWI is targeting to achieve sales of RM2.5 billion in FY18, unchanged from FY17.

It plans to launch one or two sites of the 12 sites in Greater London and the southeast of England which it is jointly developing with UK-based developer Be Living Holdings Ltd this year. It currently has 18 on-going projects in the UK and Australia.

As at 4.59pm, EcoWorld shares were unchanged at RM1.43, with 544,100 shared traded, for a market capitalisation of RM4.21 billion, while EWI shares were up 2 sen or 1.8% at RM1.13, with 1.91 million shares done, valuing it at RM2.71 billion. — theedgemarkets.com

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