EcoFirst in pursuit of affordable housing to mitigate pandemic-hit earnings

PROPERTY developer EcoFirst Consolidated Bhd is poised for an earnings recovery with launches of new development focusing on affordable housing after its 3Q FY2021 ended Feb 28 fell into a quarterly net loss for the first time since 4Q FY2014.

EcoFirst slipped into a net loss of RM4.3 mil in 3Q FY2021 mainly due to the postponement in the launching of new development and lower revenue from its property development segment.

Its revenue plunged 89% year-on-year to RM4.5 mil in the 3Q FY2021 as a result of a delay in recognition of the sales of its property development, Liberty, as handing over of keys to homeowners was deferred following the re-imposition of movement control order (MCO 2.0).

Nevertheless, the group expects better prospects ahead with new development launches to escalate in 2H 2021.

“While we expect the property sector’s outlook to remain challenging, we are cautiously optimistic of a recovery in earnings from this quarter onwards as we convert our inventories into sales and resume our property development launches with a focus on affordable housing segment,” commented EcoFirst’s group CEO Datuk Tiong Kwing Hee.

Datuk Tiong Kwing Hee

“We are excited with the pipeline of projects that we have planned over the next three years.”

Among some of these launches include Phase 2 of the company’s flagship Ampang Ukay flagship development in 1H 2022 with gross development value (GDV) of RM1.3 bil after its Phase 1 (the Liberty project) posted a 100% take-up rate.

“We have also embarked on some land acquisition recently in Shah Alam, Sungai Buloh and Sungai Besi.,” noted Tiong.

“By stepping up our land acquisitions, this puts us in a better position to meet market demand with our new property products, prime location and affordable pricing.”

Additionally, EcoFirst plans to launch its new property development project in Shah Alam which boasts a GDV of RM311 mil by 1H 2021 following an acquisition of a plot of land measuring 4.75-acre in Cahaya SPK, Seksyen 9, Shah Alam on April 2.

Elsewhere, EcoFirst is currently drawing up a transit-oriented development (TOD) plan for its land in Sungai Buloh to obtain development approval from the local authorities.

The group has entered into a conditional sale and purchase agreement with Radiant Nature Sdn Bhd for the acquisition of seven parcels of commercial land in Sungai Buloh for a purchase consideration of RM70 mil at the beginning of 2021.

While Malaysia’s property sector is still expected to face some of the challenges from the property overhang, the affordable housing segment is in a sweet spot given the strong demand, supported by first-time homebuyers who are taking advantage of the incentives offered during the home ownership campaign (HOC).

Henceforth, EcoFirst’s new launches focusing on the affordable housing segment is poised to drive the group’s recovery after pandemic-hit earnings in the 3Q FY2021.

At today’s close of trading, EcoFirst was unchanged at 40 sen with 235,700 shares traded, thus valuing the company at RM333 mil. – April 22, 2021

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