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PETALING JAYA (June 26): EWI Capital Bhd (formerly Eco World International Bhd) is repositioning its portfolio towards income‑generating office assets even as near‑term earnings remain weighed down by impairments and foreign‑exchange losses.
For the second quarter ended April 30, 2026 (2QFY2026), the group posted a net loss of RM30.9 million versus a net profit of RM2.3 million a year earlier, mainly due to non‑cash impairment charges and currency movements. For the first half of the financial year (1HFY2026), EWI Capital recorded a cumulative net loss of RM41.7 million, compared with a RM1.5 million loss in the corresponding period last year.
In a filing with Bursa Malaysia yesterday, the group said it had recorded no consolidated revenue for the quarter and period under review as its overseas development projects are held through joint ventures that are not consolidated line‑by‑line.
However, it reported other income of RM0.7 million in 2QFY2026 and RM1.4 million in 1HFY2026, primarily from finance income, against administrative and general expenses of RM6.2 million and RM10.4 million respectively.
The quarter’s loss before tax was driven mainly by a RM13.7 million impairment on a disposal group held for sale – the subsidiary that owns the Macquarie Park site in Sydney — and a RM8.0 million impairment on amounts owing by its UK joint venture Eco World London Development Company group, compared with RM1.4 million in the same quarter a year earlier.
The group also recognised a foreign‑exchange loss of RM1.6 million in the quarter and RM2.2 million in the first half, reversing gains booked in the previous corresponding periods, while incurring finance costs of RM2.0 million in 2QFY2026 and RM3.1 million year‑to‑date.
At joint‑venture (JV) level, EWI Capital said revenue totalled RM15.6 million in 1HFY2026, of which its effective share on an unconsolidated basis was about RM10.9 million, down from RM145.4 million and RM103.6 million respectively a year earlier.
The group noted that unsold completed inventories at its UK joint ventures have been progressively reduced, leading to lower sales, while fixed overheads and the lack of new launches have pressured margins. Once its investment in the JV was fully written down, the group stopped recognising share of JV losses, with subsequent losses reflected as impairments on JV advances.
Despite the near‑term losses, EWI Capital’s balance sheet remains asset‑backed. Net assets attributable to owners of the company stood at RM673.7 million as at April 30, 2026, compared with RM720.8 million at Oct 31, 2025, translating into net assets per share of 28 sen versus 30 sen previously.
Total assets rose to RM920.2 million from RM836.3 million, mainly due to the recognition of RM286.7 million in other investments, while total liabilities increased to RM245.8 million from RM114.7 million following the drawdown of an Australian‑dollar term loan of RM197.3 million to partly fund its subscription into TrustCapital Australian Office Fund No. 3 (AOF3).
EWI Capital said the term loan is secured against its subscription in AOF3 and supported by a corporate guarantee from the company, bringing group borrowings to RM197.3 million as at end‑April from nil at the previous financial year‑end.
Cash and cash equivalents stood at RM125.8 million, versus RM195.8 million previously, after net cash used in operating activities of RM3.7 million and net cash used in investing activities of RM255.8 million were partly offset by RM189.5 million net cash generated from financing activities during the period.
On the sales front, EWI Capital said it had recorded RM18 million in sales based on contracts exchanged during the first seven months of FY2026. Together with RM11 million in reservations, total sales to date stood at RM29 million.
As at May 31, 2026, it said 99% of launched units had been sold, with completed units available for sale valued at about RM107 million, comprising roughly 55% commercial and 45% residential units.
The group acknowledged that the London residential market remains challenging, especially for flats and maisonettes, citing the latest UK House Price Index, and noted that rising construction costs in the UK and higher interest rates in Australia continue to squeeze development margins and homebuyer affordability.
Against this backdrop, it is pivoting more decisively towards investment‑style income.
EWI Capital said it has invested A$100 million (approximately RM277 million) into AOF3, which has acquired an office building at 750 Collins Street in Melbourne that is currently leased to Monash University, and that the asset is expected to generate immediate income for the fund, with a maiden distribution anticipated in the second half of FY2026.
The group cited Knight Frank as saying that annual net effective rent growth has remained robust across major Australian CBD office markets, with demand concentrated in well‑located, higher‑quality buildings, and noted that best‑in‑class assets in core CBD locations are expected to see relatively stable yields in a supply‑constrained environment.
EWI Capital said this AOF3 investment forms an integral part of its strategy to chart a return to profitability by focusing on income‑generating office assets rather than undertaking new residential developments in a more challenging market.
The move effectively sees the group recycle capital from development land into stabilised, tenant‑backed income streams in markets where office fundamentals remain supportive.
On its remaining UK portfolio, the group said the Griffin Park site at Kew Bridge has obtained planning permission, while the Duffy site is expected to receive planning approval by the end of FY2026. It added that the board is evaluating the feasibility of proceeding with the Griffin Park development while also exploring potential disposal options to accelerate monetisation, giving it flexibility to either build out or cash out depending on market conditions and risk‑adjusted returns.
In respect of the Macquarie Park site, EWI Capital said shareholders have approved its disposal for A$32 million, with proceeds to be used primarily to partially repay borrowings undertaken to fund the AOF3 investment.
The group expects this redeployment of capital to AOF3 to deliver higher risk‑adjusted returns compared to developing the site, in line with its shift towards an asset‑light, income‑focused model.
No dividend was declared for the quarter or half‑year under review. The group reported a basic loss per share of 1.29 sen for 2QFY2026 and 1.74 sen for 1HFY2026, compared with earnings per share of 0.10 sen and a loss per share of 0.06 sen respectively a year earlier.
The board said the interim financial report was approved on June 25, 2026, and that the group’s audited financial statements for FY2025 carried an unqualified audit opinion.
Separately, EWI Capital announced the appointment of Tee Kim Xiong as deputy chief executive officer with effect from yesterday.
The company said Tee, 37, holds a Bachelor of Commerce degree from the University of South Australia and has nearly 15 years’ experience in corporate and investment banking with CIMB Bank Bhd, where he was involved in initial public offerings, mergers and acquisitions and fundraising exercises for sectors including property development, real estate investment trusts, construction and infrastructure.
It added that he briefly served as CEO of a private real estate asset management company prior to joining EWI Capital, and that his appointment is expected to strengthen the group’s execution of its capital‑recycling and income‑generation strategy.
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