Eco World International Berhad announced its results for 2Q 2024 where it recorded loss before tax of RM13.9 million compared to loss before tax of RM2.1 million in 2Q 2023,
The goup this was mainly due to lower gross profit as the stocks in the Australian projects are largely fully sold, impairment loss on amount owing by EcoWorld London as the joint venture continues to invest resources to procure better planning consents for its remaining projects and lower foreign exchange gains from appreciation of British Pound (GBP) against Ringgit Malaysia on conversion of GBP denominated bank balances in 2Q 2024 compared to 2Q 2023.
Comments on EcoWorld International’s performance by Dato’ Teow Leong Seng, President & CEO, as at 31 May 2024, sales are on track and we have reduced the value of unsold completed stocks to about RM400 million of which the Group’s effective share is approximately RM300 million. The Board is maintaining our target of generating excess cash of up to RM500 million by selling our completed stocks.
Such excess cash will be distributed to shareholders in tranches over 2024 and 2025, with the 1st tranche amounting to RM144 million to be paid in July 2024, following the declaration of the 6 sen 1st Interim Dividend to shareholders by the Board in 2Q 2024.
Construction costs in the UK have continued to climb despite softening of home prices in the recent
months. Given the uncertainties related to policy direction as the UK heads to a general election in July
2024 and market expectations of rate cuts in the later part of 2024, homebuyers will take longer time to
transact as they wait for policy clarity and lower mortgage rates. 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. While the current environment is challenging, the UK real estate market nonetheless
presents opportunities in the longer term, judging from the strong rental rates in London. The Group will
proceed with launches when cost pressures stabilise and the expected returns of undertaking such
launches can be forecast with greater certainty
