KUALA LUMPUR (June 21): Eco World International Bhd posted a narrower net loss of RM4.56 million or 0.19 sen loss per share for the second quarter ended April 30, 2023 (2QFY2023) compared with RM67.35 million or 2.81 sen loss per share a year earlier.

The improvement was due to higher foreign exchange (forex) gain as the British pound strengthened against Ringgit Malaysia, higher interest income following capital contribution repayments from the UK joint ventures and lower finance costs due to the group’s progressive repayment of loans.

In the previous year's corresponding quarter, the group provided an impairment loss on the investment in its 75%-owned Ecoworld Ballymore, EWI informed Bursa Malaysia on Wednesday.

For the nine-month period ended April 30, EWI trimmed its net loss to RM35.38 million from RM82.01 million a year ago.

Compared with the immediate preceding quarter, EWI’s net loss decreased from RM30.82 million in 1QFY2023, as revenue increased from RM22.37 million.

Looking ahead, EWI said it is on track to achieve its full-year target sales of RM1.4 billion with total sales including reserves of RM918 million achieved as on May 31. It added that its focus on selling its completed stocks have generated substantial cash.

“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 on 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 on April 30, 2023. This is a 218% increase from the net cash (including cash at JVs) position as on Oct 31, 2022,” the group said in a statement.

EWI added that given that sales of its remaining completed stocks are the key determinant for distributions to shareholders, the group will continue to offer attractive incentive packages to buyers and maintain its marketing campaigns, as well as 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 said.

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

Touching on the group’s proposed capital reduction of RM1.5 billion, EWI president and CEO Datuk Teow Leong Seng said the majority of the group’s shareholders voted in favour of the exercise at the extraordinary general meeting (EGM) held on Monday (June 19).

“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 on April 30, 2023, we are well on track to be able to declare a first tranche dividend amounting to at least RM300 million in the near term,” he added.

EWI closed flat at 60 sen on Wednesday, valuing it at RM1.43 billion. Year-to-date, the stock has risen 50%.