Industrial land sales boost EcoWorld net profit in 1QFY2025; declares one sen interim dividend

• Gross profit increased 19.3% to RM153.17 million, as the group achieved a higher gross profit margin of 28.4%, up from 23.9% a year earlier.

KUALA LUMPUR (March 20): Eco World Development Group Bhd (KL:ECOWLD) posted a 15.4% year-on-year (y-o-y) increase in net profit for the first quarter ended Jan 31, 2025 (1QFY2025) to RM80.34 million, driven by two major industrial land sales and stronger contributions from its projects in Johor.

Quarterly revenue was up marginally to RM539.63 million in 1QFY2024, compared with RM537.79 million a year ago, the property developer’s filing on Bursa Malaysia showed.

Gross profit increased 19.3% to RM153.17 million, as the group achieved a higher gross profit margin of 28.4%, up from 23.9% a year earlier.

The group’s projects in Iskandar Malaysia contributed RM353.42 million in revenue, an increase of 3.9% y-o-y, while the Klang Valley recorded RM176.98 million, down 8.8% from a year earlier. Revenue from Penang surged 156% to RM9.23 million, boosted by new launches.

The board declared a first interim dividend of one sen per share, payable on April 22, with an ex-date of April 8.

President and chief executive officer Datuk Chang Khim Wah said EcoWorld had a strong start to the financial year ending Oct 31, 2025 (FY2025). According to him, the group has secured RM1.93 billion in sales within the first four months of FY2025, equivalent to 55% of the full-year sales target of RM3.5 billion.

The industrial segment was the largest sales contributor during the four months between November 2024 and February 2025, bringing in nearly RM1 billion. The sales were driven by two major land sales to Microsoft Payments Malaysia and Pearl Computing Malaysia, which contributed RM693.9 million and RM266.1 million, respectively. The combined value of these transactions amounted to RM960 million.

Projects in Iskandar Malaysia contributed RM1.14 billion or 59% of the group’s total sales, followed by 34% from the Klang Valley and 7% from Penang. 

"More notably, within a relatively short span of only nine months from June 2024 to February 2025, we have successfully entered into four deals to sell industrial lands to market leading data centre players, generating total sales value of RM1.59 billion," he said in a separate statement. 

"This attests to the suitability of our business parks, whether in Iskandar Malaysia or the Klang Valley, as ideal sites for digital and high-tech operations and it also speaks of Malaysia’s continued attractiveness to hyperscalers for data centre operations," Chang added.

Chang noted that EcoWorld was also expanding its recurring income portfolio, including an agreement with Pearl Computing to build and lease the shell and core of data centres on a 92.44-acre site in Eco Business Park V. The 20-year lease, with an option for renewal up to 10 additional years, is estimated to generate up to RM4.8 billion in rental income.

Looking ahead, Chang said EcoWorld plans to continue expanding its investment assets over the next three to five years, with a target of 20% to 30% of future earnings coming from recurring income sources.

"This will further enhance EcoWorld’s earnings stability and cash flow certainty going forward, giving us increased capacity to reward shareholders with continued growth and good dividends," he said.   

Shares of EcoWorld declined two sen or 1.04% to close at RM1.90 on Thursday, with a market capitalisation of RM5.64 billion.

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