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Property News

Windfall for shareholders as Eco World International’s dividend tops RM935mil

Eco World International president and CEO Teow Leong Seng said shareholders can look forward to potentially more dividends in FY2024. (EcoWorld pic)

PETALING JAYA: Shareholders of Eco World International Bhd (EWI) can look forward to even more dividends after the property developer declared a second tranche dividend of RM144 million to add to the first tranche of RM792 million declared last month, bringing the grand total to RM936 million.

That’s not all as its president and CEO Teow Leong Seng said today that shareholders can look forward to “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,” he said in a statement accompanying the results of its third quarter ended July 31 (Q3 FY2023).

“The appreciation of the British pound since Q4 FY2022 when we first announced our intention to distribute excess cash back to shareholders has increased the ringgit value of the group’s remaining unsold completed stocks,” he added.

In late August, EWI declared a bumper dividend of RM792 million, or 33 sen per share, following the completion of its capital reduction exercise on Aug 3.

Based on its share capital of 2.4 billion, the second tranche of RM144 million translates into a dividend of 6 sen per share.

EWI said today it expects total dividends payable from its excess cash, including the RM792 million payable in September, to exceed the original estimate of RM900 million.

As at July 31, the group’s cash balance stood at RM801.3 million compared with RM614.2 million at end-October last year.

Teow said as of Aug 31, EWI and its joint venture (JV) have approximately RM1.1 billion in completed and nearly-completed stocks available for sale.

“EWI achieved RM1.003 billion in sales plus reserves of RM157 million in 10 months of FY2023, adding up to a total of RM1.16 billion. This places the group largely on track to achieve the sales target of RM1.4 billion for FY2023.

“With regard to new launches, these will continue to be put on hold until market conditions improve and cost pressures stabilise. As a result, the immediate working capital requirements of the group will be lower than originally estimated,” he said.

During its third quarter, the developer paid off borrowings of RM744.05 million, and is now debt free.

EWI recorded a lower net loss of RM12.3 million in Q3 FY2023 from RM56.68 million a year ago, amid foreign exchange gains from repayment of shareholder’s advances from EcoWorld-Ballymore and bank balances conversion from the British pound to ringgit.

Quarterly revenue fell 9.65% to RM31.17 million from RM34.5 million a year earlier because of discounts given to accelerate sale of remaining units sold in the current quarter.

Gross profit subsequently fell 51.8% to RM3.71 million, from RM7.7 million in the same quarter last year.

The group’s revenue consists of proceeds from property sales from the West Village and Yarra One projects in Australia, and fees for marketing services by a subsidiary to the group’s JV on property sales in the UK.

EWI’s shares rose 4.5 sen or 13.8% to 37 sen, giving it a market capitalisation of RM888 million.

Source: FMT News

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