EcoFirst 4Q net profit surges over 600% on fair value gain

KUALA LUMPUR (July 30): EcoFirst Consolidated Bhd posted a 657% jump in net profit to RM15.9 million for its fourth quarter ended May 31, 2021 (4QFY21) from RM2.1 million in the previous year’s corresponding quarter, boosted by a fair value gain of RM13.7 million.

Excluding the fair value gain, the group’s net profit would have come in at RM2.2 million, comparable to that of 4QFY20’s, despite a steep 42% drop in quarterly revenue, as it saw a near 72% decline in cost of sales to RM4.66 million from RM16.48 million, while other operating expenses more than halved to RM1.15 million.

Quarterly revenue fell to RM14 million from RM24.3 million, EcoFirst said in a statement, due to the postponement of new development launches and lower contribution by the property development segment, which continue to be negatively affected by the Covid-19 pandemic.

“The general property sector has been severely affected by the prolonged Covid-19 pandemic and the lockdown measures introduced to contain the spread of infections.

“We’re not spared from the impact of the pandemic, as the group has to postpone its new launches amidst the reimposition of the Movement Control Order (MCO),” EcoFirst group chief executive officer Datuk Tiong Kwing Hee said yesterday.

For the full FY21, EcoFirst’s net profit fell 19% to RM13.8 million from RM17.1 million, while its cumulative revenue dropped 71% to RM42.57 million, from RM150 million.

Looking ahead, the group expects demand for affordable products to remain robust, adding that it has restrategised majority of its products and pricing to below RM500,000 per unit for its upcoming launches.

This shift in focus to the mass market segment will help drive the group’s growth going into FY22, it said.

EcoFirst’s upcoming launches include its Sungai Besi development, located in the Chan Sow Lin area, as well as another project in Damansara Damai.

The group has also been acquiring new tracts, including the seven parcels of commercial land in Sungai Buloh it bought for RM70 million in January this year, for which the group is in the midst of submitting the development plans to the relevant authorities.

In April, the group entered a conditional share sale agreement for the acquisition of a 51% stake in BCM Holdings Sdn Bhd, which is the beneficial owner of two contiguous parcels of freehold land located in Sungai Besi, measuring 4.18 acres.

“Our focus on developing high-value land in strategic areas with attractive pricing and development features tailored to the requirements of the mass-market segment will help drive earnings recovery in the upcoming financial year,” said Tiong.

EcoFirst shares closed unchanged at 38.5 sen yesterday, giving it a market capitalisation of RM330.77 million.