KUALA LUMPUR: Eco World International Bhd (EWI) posted a net profit of RM182,000 from a net loss of RM30.82 million in the first quarter ended Jan 31, 2024, lifted by foreign exchange gains.
In a filing with Bursa Malaysia today, EWI said gains in the foreign exchange was due to the appreciation of British pound against the ringgit.
This was spurred by the repayment of advances from the joint venture company Ecoworld-Ballymore and the conversion of British pound-denominated bank balances.
Group revenue jumped 41.6 per cent to RM31.67 million from RM22.37 million driven by the sale of higher priced commercial units.
The group's finance costs were lower as it had fully paid off all borrowings by the end of 2023.
EWI achieved RM243 million in sales plus reserves of RM203 million, bringing total sales for the first months of FY2024 to RM446 million, with Embassy Gardens being the largest contributor at RM105 million, followed by RM75 million from Wardian and RM20 million from Yarra One.
Following the distribution of a RM144 million dividend during the first quarter of FY2024, EWI still had a net cash balance of RM211 million as at Jan 31 this year.
EWI president and chief executive officer, Datuk Teow Leong Seng said the group is steadily advancing in its efforts to monetise inventories.
As of Feb 29, EWI held about RM650 million of completed and nearly-completed stocks available for sale, with the group's effective share amounting to around RM500 million.
"Sales of completed stocks are estimated to generate excess cash up to RM500 million for the group over 2024 and 2025.
"The board intends to distribute the excess cash to shareholders and we are seeking approval in our annual general meeting next week to undertake a second capital reduction exercise to enable such distribution," Teow said.
Teow said the ongoing challenges of high living costs and elevated interest rates are suppressing demand from potential homebuyers.
As such, all launches for the remaining sites continue to be put on hold, pending review of their feasibility in view of the ongoing weak sentiment among homebuyers and significant cost inflation.
"The decision to proceed with launches will be contingent upon an improvement in market conditions, stabilisation of cost pressures, and meeting the expected returns required," he added.