EcoWorld International’s total net cash balance exceeds RM700m

• On track to declare 1st tranche dividend of at least RM300 million.
• EcoWorld International stated that it is on track to achieve its full year sales target of RM1.4 billion, with sales achieved of RM619 million plus reserves of RM299 million, totalling RM918 million in 7 months of FY2023.

KUALA LUMPUR (June 22): Eco World International Bhd announced its results for 2Q2023 yesterday.

In a media release, EcoWorld International stated that it is on track to achieve its full year sales target of RM1.4 billion, with sales achieved of RM619 million plus reserves of RM299 million, totalling RM918 million in 7 months of FY2023.

The developer’s focus on selling completed stocks have generated substantial cash, it revealed.

Since turning net cash positive in 4Q FY2022, the group’s total cash, deposits and other investments have further increased to RM922 million (excluding cash held at JV entities) as at April 30, 2023. This exceeds remaining borrowings by RM652 million.

Including the group’s effective share of net cash balances at JV entities, the Group’s total net cash balance stands at RM727 million as at April 30, 2023. This is a 218% increase from the net cash (including cash at JVs) position as at Oct 31, 2022.

On June 19, 2023, shareholders of EcoWorld International approved its Proposed Capital Reduction exercise, paving the way for the planned distribution of excess cash back to shareholders in the form of dividends.

EcoWorld International aims to declare a 1st tranche dividend of at least RM300 million in the near term while working towards achieving the RM900 million total distribution target set for 2023.

EcoWorld International recorded a loss before tax of RM2.12 million in 2Q2023 as compared to a LBT of RM66.53 million in 2Q2022. The lower LBT was mainly due to:

* higher foreign exchange gain as the GBP strengthened against Ringgit Malaysia;

* higher interest income following capital contribution repayments from the UK JVs; and

* lower finance costs as a result of the Group’s progressive repayment of loans.

In addition, in 2Q2022 the group had provided an impairment loss on its investment in Eco WorldBallymore which contributed to the higher loss recorded in the previous year corresponding quarter.

“On June 19, 2023, shareholders holding 99.992% of EcoWorld International’s voting shares voted in favour of the group’s Proposed Capital Reduction, at the company’s Extraordinary General Meeting.

“This signifies near unanimous support for the group’s plans to concentrate our efforts on the monetisation of our completed stocks, cash preservation and generation with a view towards distributing excess cash back to shareholders,” said Datuk Teow Leong Seng, president & CEO of EcoWorld International.

“With the approval of our shareholders secured we expect to be able to complete our Proposed Capital Reduction by August 2023. Thereafter, based on the group’s substantial net cash reserves of more than RM700 million accumulated as at April 30, 2023, we are well on track to be able to declare a 1st tranche dividend amounting to at least RM300 million in the near term.

“We will also be working towards achieving the RM900 million total distribution target set for 2023,” added Teow.

“With total sales (including reserves) of RM918 million achieved as at May 31, 2023, EcoWorld International is on track to meet its sales target of RM1.4 billion for FY2023,” stated the group.

“Given that sales of its remaining completed stocks are the key determinant for distributions to shareholders, EcoWorld International will continue to offer attractive incentive packages to buyers and maintain its marketing campaigns.

“In addition, it is also exploring various options including bulk offers to accelerate sales. These initiatives are expected to sustain the sales momentum enabling conversion of remaining stocks to cash despite the softening in real estate demand following hikes in interest rates and cost of living pressures in the UK and Australia,” it added.