29 Oct 2018, The Malaysian Reserve
Ecofirst Consolidated Bhd is expected to announce its first dividend to shareholders next year.
EcoFirst group CEO Datuk Tiong Kwing Hee said the dividend payment is as promised to the shareholders and it will be paid within 12 months.
“The first dividend will, of course, begin with a smaller sum as part of our dividend policy. Then, every year we would seek to slowly increase the dividend as the company progresses and makes more money,” he told the media at a press conference after the company’s AGM in Subang, Selangor, last Friday.
Tiong, however, did not disclose the amount and when the dividend would be disbursed.
The property developer saw continued profitability in its first quarter (1Q), posting a net profit of RM4.7 million despite a softer property market.
For the quarter ended Aug 31, 2018, EcoFirst’s revenue amounted to RM44.7 million.
In the previous corresponding quarter, the group saw a revenue of RM44.8 million and restated net profit of RM5.7 million following the adoption of Malaysian Financial Reporting Standards framework with effect from June 1, 2018.
Tiong said the company’s continued track record of profitability is credited to efficient management of resources, agile cost structure and ability to maintain low gearing.
“We are very calculative as a management team. That’s why we get all these good results. We value our shareholders who have invested in us,” he said.
Tiong added that with 95% of Phase 1 of its flagship project, Liberty@Ampang Ukay sold, it showed EcoFirst’s ability to tap into the underserved segments of the market and produce the right products to meet customer demand.
“Liberty is progressing well according to schedule and we’re on track to meet its full completion in November 2019.
“With increased progress billings in tandem with completed stages of Liberty, our focus is to ensure fast turn-around on Liberty, which keeps our cashflow healthy,” he said.
Tiong said although the property market is a bit down at the moment, the company has no plans to venture into other businesses.
“We will stick to our current business model where we make 10% from our investment properties and 90% from our property developments. We need this fast turnaround cashflow to pay down our debts,” he said.
EcoFirst is now working on Phase 2 which is being planned as a lower density development with three blocks proposed and offering larger- sized units that would suit young growing families.
“EcoFirst expects Phase 2, which will be priced to offer excellent value to the target market, to build on the success of Liberty. The target is to launch Phase 2 in the 3Q of 2019,” he explained.
With a stable stream of income expected from Ampang Ukay over the next 10 years, EcoFirst is also looking to create additional value through strategic initiatives and partnerships with renowned developers for a competitive edge, Tiong said.
As the last large freehold land on the borders of Ulu Kelang, EcoFirst’s 87-acre (35.21ha) Ampang Ukay project will be the main driver of growth over the medium-to long-term period, with over RM5 billion in estimated gross development value.
When asked whether EcoFirst is putting much focus on its development projects in the Ampang Ukay area which could pose as a risk, Tiong said the company is targeting opportunities to develop small pockets of land in prime neighbourhoods for quick turn-around and steady cashflow.
“We are looking at pockets of land elsewhere. These pockets of land do not belong to us, but we have approval to launch the project immediately.
“We may opt for a joint venture or negotiate to buy over majority stakes. Some, we takeover 100%,” he said.
Tiong said this business model will come in very handy and help create better values for its shareholders.
“Being nimble and agile, we are confident we can turn a good profit on such developments,” he said, adding that the pockets of land range from three to 20 acres.
Tiong is hoping the government will not introduce any additional real estate taxes in the upcoming Budget 2019, as this could weigh heavily on the sluggish property market.
“We believe continued focus on housing affordability is still needed and hope the government will allow provisions that will help Malaysians buy homes and secure housing loans. These measures could potentially boost the real estate sector,” he said, adding that the company is in the early stage of discussion with the Selangor government to undertake affordable housings.