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Tuesday, 31 July 2018

(The Edge Financial Daily) EcoFirst targets M240m sales for FY19

BY WONG EE LIN

KUALA LUMPUR: EcoFirst Consolidated Bhd aims to achieve a sales target of RM240 million for the financial year ending May 31, 2019 (FY19), driven by sales from two ongoing developments the company has in Selangor and Perak.

The two developments are Phase 1 of Ampang Ukay, known as Liberty @ Ampang Ukay, and Kondominium Kelab Golf — formerly known as Upper East @ Tiger Lane — in Ipoh, Perak.

Speaking to reporters at a media briefing yesterday, its group chief executive officer Datuk Tiong Kwing Hee said the property developer achieved RM158 million sales from Liberty @ Ampang Ukay in FY18.

As at June 30, 2018, Liberty @ Ampang Ukay was about 95% sold. Hence, the property developer is confident that the remaining 5% would be sold in FY19. At present, Liberty @ Ampang Ukay is about 41% completed and is on track to meet its full completion in November 2019.

Additionally, Tiong said EcoFirst is planning to launch the second phase of Ampang Ukay in the second half of 2019.

“We are planning three blocks of larger-sized condominium units which we believe will be priced to offer excellent value to the target market,” Tiong added.

Still in planning stage, the second phase of Ampang Ukay units will range from 1,600 sq ft to 2,300 sq ft, and will be priced at about RM450 per sq ft. The entire Ampang Ukay project carries a gross development value of over RM5 billion, which is expected to be realised over 12 to 15 years.

Currently, property development contributes to 88% of EcoFirst’s revenue, while property investment and management contribute 10% and 2% respectively.

EcoFirst’s net profit for the fourth quarter ended May 31, 2018 grew 8.7% year-on-year (y-o-y) to RM9 million from RM8.28 million due to lower marketing cost, though revenue fell 7.4% y-o-y to RM60.71 million from RM65.55 million.

For its full FY18, EcoFirst’s net profit soared 176.5% y-o-y to RM44.6 million from RM16.13 million, as revenue jumped 42.5% y-o-y to RM181.23 million from RM127.21 million.

However, excluding the one-off gain from a compulsory land disposal of RM28.4 million to the government, EcoFirst would have only seen a marginal 0.4% increase in net profit. The disposed land is for the upcoming Sungai Besi-Ulu Klang Elevated Expressway.

When asked if EcoFirst will be able to maintain the same margin in the next financial year, Tiong said: “Hopefully we can. We will definitely work very hard.”

On the proposed exemption of building materials such as bricks, steel and cement from the new sales tax, Tiong said EcoFirst will wait for further details from the government. These materials were previously taxed 6% under the goods and services tax.

Nevertheless, Tiong said any savings from lower building material costs shall be passed back to the purchasers to make house prices more competitive. However, EcoFirst will first have to “relook into the numbers”, to maintain a similar margin.

Moving forward, Tiong said EcoFirst is in discussion on a potential joint venture and is eyeing possible land deals in the Klang Valley, but he did not elaborate.

While the company has yet to decide on a fixed dividend policy, he said shareholders can expect dividends as soon as the next six months.

EcoFirst shares closed half a sen or 1.64% higher at 31 sen yesterday, with a market capitalisation of RM240.95 million.