KUALA LUMPUR: EcoWorld International Bhd (EWI) slipped into the red with a net loss of RM67.35 million for the second quarter ended April 30, 2022 from a net profit of RM11.30 million in the same quarter a year ago.
In a filing with Bursa Malaysia today, the property developer said the negative performance was mainly due to lower profit contribution from projects in Australia in line with lower revenue, share of losses in joint ventures (JVs), as well as impairment on investment worth RM36.16 million in its JV company, EcoWorld (EW)-Ballymore in London.
EWI saw its revenue shrank to RM33.08 million from RM107.56 million previously, mainly due to lesser number of units sold handed over to customers as the majority of the units were handed over in the last financial year.
For the cumulative six months ended April 30, 2022, EWI recorded a net loss of RM82.01 million against a net profit of RM67.34 million previously, while revenue dipped to RM82.32 million from RM410.83 million in the same period last year.
Commenting on the performance, president and chief executive officer Datuk Teow Leong Seng said the company saw a resurgence in demand over the last seven months but selling prices had not increased at quite the same pace.
"Market sentiment continues to be weighed down by inflationary concerns and rising interest rates, compounded by geo-political tensions caused by the ongoing conflict between Russia and Ukraine," he said in a separate statement.
Despite the lackluster performance, EWI said it is on track to achieve its sales target of RM2 billion for the financial year ending Oct 31, 2022 (FY2022).
"Total sales plus reserves as at May 31, 2022 (seven months) add up to RM1.53 billion, which is 52 per cent more than RM1.01 billion recorded in the same period of FY2021," the statement said.
Moving forward, EWI said the group plans to monetise completed stocks in the United Kingdom (UK) and Australia and this is expected to generate substantial cash reserves.
"A portion of the funds generated from the sales of completed stocks will be earmarked for reinvestment, with the balance to be repatriated to Malaysia for a planned distribution to shareholders within the next one to two years," the statement said.
According to the group, EW-Ballymore currently has about 400 million pounds (1 pound:RM5.33) worth of completed properties, which are readily monetisable for further distributions to the group. Gross and net gearing levels of the group remain low at 0.30 times and 0.23 times, respectively.