This year, Eco World Development Group Bhd (EcoWorld) takes home The Edge Billion Ringgit Club (BRC) award for highest growth in profit after tax over three years among property companies with a market capitalisation of below RM3 billion.
While this marks the first time the company has won in this category, EcoWorld is not a first-time winner for BRC, having clinched accolades three times between 2014 and 2016.
Indeed, it is no small feat to remain profitable amid the soft property market and lingering impact of the Covid-19 pandemic.
The group’s net profit rose from RM93.5 million in FY2018 to RM203.4 million in FY2019, dipping slightly in FY2020 to RM160.2 million before rebounding slightly in FY2021 with a net profit generation of RM182.7 million. This reflects a risk-weighted three-year profit after tax compound annual growth rate (CAGR) of 25%, according to the awards methodology, placing the property player ahead of peers.
In its 2020 annual report, EcoWorld said that particular year was unlike any other in which the property player had to navigate market challenges and uncertainties arising from the pandemic, which upended the best-laid plans of most businesses.
Against the backdrop of this highly challenging environment, EcoWorld still delivered RM2.3 billion in sales for FY2020, which was 15% higher than the sales target of RM2 billion. Eco World International, its 27%-owned joint venture, achieved RM1.4 billion in sales, which was 25% higher than FY2019.
As the economy regained momentum in 2021, EcoWorld’s revenue rebounded slightly to RM2.04 billion. The same year, the property player achieved RM3.5 billion in sales, which is markedly higher than both the sales target set for FY2021 of RM2.87 billion and actual sales achieved in FY2020 of RM2.3 billion.
Eco World International achieved RM1.4 billion sales in FY2021.
Along with the group’s improved balance sheet and cash position, the board also declared total dividends of four sen per ordinary share in FY2021, which is double the amount declared in FY2020. The total dividend payout is about RM117.8 million, representing a payout ratio of 64%.
The group shows no signs of slowing down as EcoWorld Malaysia’s 10-month year-to-date (YTD) sales have already reached RM3.44 billion against a full-year sales target of RM3.5 billion.
YTD net profit stood at RM155.43 million against RM139.92 million posted a year ago even as revenue grew to RM1.48 billion compared with RM1.37 billion posted in the same period last year.
In its latest financial report for the third quarter ended Oct 31, 2022, EcoWorld said sales performance in all three regions continued to grow, with projects in the Klang Valley and Iskandar Malaysia accounting for 55% and 31% of total sales respectively, while projects in Penang made up the balance of 14%.
Sales increased RM1.27 billion from June to August, with contributors to sales including projects from the Klang Valley such as Eco Ardence, Eco Majestic, Eco Grandeur and Bukit Bintang City Centre (BBCC).
The group’s township and business park projects in the southern region of Iskandar Malaysia recorded sales of RM444.75 million between June and August 2022, enabling total YTD sales to exceed RM1 billion.
The higher demand for more aspirational properties across the group’s projects in Iskandar Malaysia is mainly attributable to the return of many Malaysians working in Singapore following the reopening of the country’s borders on April 1, 2022. The border reopening has also driven up demand for the group’s industrial properties.
Up north in Penang, Eco Horizon saw sales further increase by RM144.45 million from June to August 2022 as units in its second phase of Co-Homes (priced above RM527,000) were quickly snapped up.
Its total YTD sales from Eco Horizon stand at RM447.52 million. This is a sizeable sum from a single township, as an increasing number of Penangites are drawn to the group’s flagship on the mainland, boosted by the thriving Batu Kawan industrial hub located adjacent to the project.
For EcoWorld International, property sales activities in the UK and Australia have also improved, enabling EcoWorld International to record sales plus reserves of RM2.090 billion, which is 58% more than the RM1.326 billion recorded in the same period of FY2021.
Based on the above and the strong sales momentum achieved throughout FY2022, with good growth recorded across all three geographic regions and in every market segment, the outlook for EcoWorld Malaysia remains bright — making it a strong contender for next year’s awards.