KUALA LUMPUR: Eco World International Bhd (EWI) is geared to sell its completed stocks and generate up to RM500 million in surplus cash, which will be distributed to shareholders in tranches over 2024 and 2025.
The first tranche, amounting to RM144 million, is scheduled for July 2024, following the declaration of a six-sen first interim dividend to shareholders in the second quarter of 2024.
EWI reported RM433 million in sales exchanges and RM85 million in reserves for the first seven months of its financial year ending Oct 31, 2024 (FY24).
According to a company statement, Embassy Gardens led sales with RM166 million, followed by Wardian with RM153 million and Millbrook Park with RM41 million.
As of April 30, 2024, EWI's total cash balance, including net cash from joint ventures, stood at RM349 million.
EWI president and chief executive officer Datuk Teow Leong Seng said that the group's full-year sales targets are on track as of May 31, 2024.
He noted that EWI has reduced the value of unsold completed stocks to about RM400 million, with the group's effective share being about RM300 million.
EWI recorded a higher pre-tax loss of RM13.9 million in 2Q 2024 compared to a pre-tax loss of RM2.1 million in 2Q 2023.
The increased loss was attributed to lower gross profit due to the complete sale of stocks in its Australian projects, an impairment loss on amounts owed by EcoWorld London, and lower foreign exchange gains from the appreciation of the British Pound against the ringgit.
Teow noted that construction costs in the UK continue to rise despite a recent softening in home prices.
He said that uncertainties related to the upcoming UK general election in July 2024 and anticipated rate cuts later in 2024 have caused homebuyers to delay transactions.
"As such, the current environment remains unconducive for the group to undertake launches in the near term. We are monitoring market conditions closely and finding ways to improve the profitability of our remaining projects," he said.
Despite the challenges, Teow highlighted the long-term opportunities in the UK real estate market, particularly with strong rental rates in London.
EWI plans to proceed with new launches once cost pressures stabilise and expected returns become more predictable.
The group has 18 existing and upcoming projects in the UK and Australia, with a total gross development value of GBP4.6 billion and AU$700 million, respectively.