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EcoWorld International expects total dividends from its excess cash to exceed initial estimate of RM900 mil

KUALA LUMPUR (Sept 20): Eco World International Bhd has recorded a lower loss before tax of RM10.11 million in 3Q2023 compared to LBT of RM55.45 million in 3Q2022, it announced to day.
According to the company, this is mainly due to foreign exchange gains arising from repayment of advances by EcoWorld-Ballymore and conversion of British pound sterling denominated bank balances vs foreign exchange losses in 3Q2022; lower finance costs following full settlement of all borrowings during the current quarter; lower share of losses in EcoWorld London in 3Q2023 and higher interest income from funds placements following repayment of shareholder’s advances by its UK joint ventures.
EcoWorld International achieved RM1.003 billion sales plus reserves of RM157 million in 10 months of FY2023, adding up to total of RM1.161 billion. This places the group largely on track to achieve the sales target of RM1.4 billion for FY2023.
Embassy Gardens, which generated RM525 million sales, was the biggest contributor to sales, followed by Wardian (RM172 million), London City Island (RM109 million) and Yarra One (RM64 million).
As at July 31, 2023, EcoWorld International had net cash of RM801 million. Including its effective share of net cash balances at JV entities, total net cash balance stands at RM831 million.
The substantial cash generated from sales of the group’s completed stocks enabled the board to declare a dividend amounting to RM792 million, which will be paid to shareholders on Sept 29, 2023.
The steady sales progress also resulted in the actual dividend distribution of RM792 million being significantly higher than the initial estimate of the first tranche dividend of at least RM300 million to be paid to shareholders following the completion of its capital reduction exercise.
“The appreciation of the British pound sterling since 4Q2022 when we first announced our intention to distribute excess cash back to shareholders has increased the RM value of the group’s remaining unsold completed stocks,” said Datuk Teow Leong Seng, president & CEO of EcoWorld International.
As at Aug 31, 2023, EcoWorld International and its joint ventures have approximately RM1.1 billion of completed and nearly-completed stocks that are available for sale, of which the group’s effective share of these stocks is approximately RM800 million.
“We will continue to focus on monetising our stocks with the aim of distributing more excess cash back to shareholders. With regard to new launches, these will continue to be put on hold until market conditions improve and cost pressures stabilize. As a result, the immediate working capital requirements of the group will be lower than originally estimated.
“Accordingly, subject to sales of our remaining stocks proceeding as planned and the continued strength of the British pound sterling, we currently expect that total dividends payable from the group’s excess cash (including the RM792 million to be paid in September 2023) should exceed the original estimate of RM900 million we had earlier announced. In this regard, management is working towards declaring a 2nd tranche dividend of RM144 million^ from our excess cash in December 2023 with potentially more to come in FY2024.
“This is consistent with our intention to progressively distribute the bulk of the proceeds received from the monetisation of stocks (less our reduced working capital requirements) to our shareholders as dividends over time,” added Teow.
^ The figures within the paragraph represents internal management targets and it does not for all intents and purposes constitute a declaration of dividend by the Company under paragraph 8.26 of the Main Market Listing Requirements.
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Source: EdgeProp.my

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