Eco World Development's 1Q net profit down 10% to RM57m on impairment recognition

KUALA LUMPUR (March 23): Eco World Development Group Bhd (EcoWorld) kicked off its first four months of its financial year 2023 with RM1.35 billion sales — up from the RM1.28 billion it achieved in the same period for FY2022 — representing 38.5% of the group's annual sales target of RM3.5 billion.

Its Eco Business Parks industrial segment recorded the highest sales, contributing RM616 million, making up 46% of total year-to-date sales achieved, boosted by strong demand from local and international industrialists.

Sales of residential homes, meanwhile, totalled RM548 million in the first four months of FY2023, with sustained interest in upgrader products.

“The group’s highly diversified product range, which now includes sizeable industrial and commercial portfolios to add to our large residential base, enabled us to achieve RM1.35 billion sales in the first four months of FY2023,” said EcoWorld president and chief executive officer Datuk Chang Khim Wah in a statement on Thursday, following the release of the group's first quarter results.

It made a net profit of RM57 million for the first three months of FY2023 ended Jan 31, 2023 (1QFY2023), down 10% from RM63.36 million a year ago, due to the recognition of an RM81 million impairment of its investment in Eco World International Bhd in the previous quarter.

Quarterly revenue slipped 8.5% to RM484.7 million from RM533.4 million a year ago, amid lower contributions from several parcels, which were substantially completed in FY2022.

Revenue was also affected by the earlier Chinese New Year celebrations in January 2023, which slowed down work progress during the festive season. This is expected to normalise and pick up in the upcoming quarters, EcoWorld's bourse filing showed.

According to Chang, EcoWorld has many new launches lined up for 2023, starting with its popular duduk apartments, which are compact homes, initially targeting younger homeowners in the Klang Valley.

Such homes will soon be available in Iskandar Malaysia and Penang. “Designed with all of life’s necessities while still being attainable from a pricing standpoint, duduk offers ideal homes for urbanites of every age,” he said.

Shares in EcoWorld traded at half sen or 0.71% higher at 70.5 sen at the time of writing on Thursday, giving the company a market capitalisation of RM2.06 billion.