Friday, 27 July 2018

(The Star) Stronger earnings expected for Eco World International

PETALING JAYA: Eco World International Bhd (EWI) is expected to see a significant earnings turnaround in financial year 2018 (FY18) as well as stronger earnings in the following year, says CGS-CIMB Research.

The research house said yesterday the stronger FY19 earnings should be underpinned by the handover of London City Island (LCI) blocks B,C,D,E,F, and Embassy Gardens’ (EG) Block A05.

However it trimmed its FY19-FY20 earnings per share forecast by 2%-3% against the backdrop of a weakening pound.

The research house maintained its “add” call on the counter with a higher target price of RM1.28.

EWI was incorporated in 2013 and currently has seven ongoing property development projects in London, UK, and two projects in Australia.

Out of the seven UK projects, three are developed by its 75%-owned JV EcoWorld Ballymore and the remaining four are under the newly acquired 70%-owned JV EcoWorld London (EWL).

The current total gross development value (GDV) in the UK is £2.4bil and A$558mil in Australia.

EWI started handing over the first tower (Block A) of LCI since mid-July 2018, while the handover for LCI’s Block M will commence in August 2018.

The company is also handing over EG’s Block A04 in September 2018.

“These projects should enable the group to convert a substantial portion of unbilled sales into revenue (via JV), thereby allowing EWI to recognise its maiden earnings in FY18,” it said.

The research house said the recently-acquired EWL sites are also likely to contribute additional earnings in FY18- FY19 but expects the contributions to be largely offset by the higher overhead for EWL’s development management company.