EcoFirst Profit Falls As KL48 Approaches Completion
EcoFirst Consolidated Bhd reported a sharp decline in earnings for the fourth quarter ended May 31, 2026, as lower progress billings from its KL48 condominium development in Sungai Besi reduced property development revenue.
The group’s unaudited net profit fell 96.6% to RM485,000 from the corresponding quarter a year earlier.
Quarterly revenue declined 74.4% to RM40.8 million, compared with RM159.39 million previously.
EcoFirst attributed the weaker performance mainly to the remaining phases of KL48 nearing completion, which resulted in lower revenue recognition from ongoing construction progress.
No dividend was declared for the quarter.
The result reflects a common earnings transition for property developers when a major project moves towards completion before the next development begins making a meaningful contribution.
KL48 Contributes Lower Progress Billings
KL48 is one of EcoFirst’s key residential developments in Sungai Besi, Kuala Lumpur.
Property developers generally recognise revenue progressively as construction advances, subject to the relevant accounting treatment and fulfilment of sales conditions.
During the earlier stages of a project, increasing construction progress can support stronger billings and revenue recognition.
As KL48 approaches completion, less unrecognised revenue remains available from sold units. This naturally reduces the amount that EcoFirst can recognise from the project during each reporting period.
The decline therefore does not necessarily indicate that KL48 has encountered a new sales or construction problem.
Instead, it shows that the development is moving beyond its main revenue-recognition phase while EcoFirst prepares newer projects to replace that contribution.
The key issue for the group is the timing gap between KL48’s declining earnings contribution and the launch and construction of its next development pipeline.
Full-Year Revenue And Profit Also Declined
For the 12-month financial period ended May 31, 2026, EcoFirst recorded net profit attributable to shareholders of RM16.16 million.
This represented a 35.1% decline from RM24.89 million in the previous corresponding period.
Revenue fell 31.5% to RM310.72 million from RM453.91 million.
The full-year decline was less severe than the fourth-quarter contraction because KL48 continued contributing more substantially during the earlier part of the financial period.
However, the figures confirm that EcoFirst is entering a transition stage.
The group will need new launches and construction progress to rebuild development revenue after the completion of KL48.
This makes the planned Ellington @ Jade Hills launch and the longer-term Ampang Ukay landbank increasingly important to EcoFirst’s future earnings profile.
Property Investment Income Remains Stable
Although property development revenue weakened, EcoFirst’s property investment segment recorded a modest improvement.
Segment revenue increased to RM17.61 million from RM16.17 million.
The increase was supported by improved rental rates at South City Plaza and higher occupancy at Liberty Arc in Ampang Ukay.
This recurring rental income provides some stability while development revenue fluctuates between project cycles.
Property investment income is generally more predictable than development earnings because it is generated through operating assets and tenant leases rather than property sales and construction milestones.
However, EcoFirst’s rental contribution remains relatively small compared with the revenue previously generated by KL48.
It can soften the impact of the development slowdown, but it is unlikely to replace a major residential project on its own.
The longer-term value will depend on whether the group can continue improving occupancy, rental rates and the quality of its investment portfolio.
Margin Improves Through Value Engineering
EcoFirst’s gross profit margin improved to 18% from 16%.
The company attributed the increase to project cost savings achieved through value engineering.
Value engineering involves reviewing construction methods, specifications, materials and design details to reduce costs without materially compromising the intended function or quality of the development.
For a project nearing completion, successful cost control can protect margins even when revenue recognition declines.
This is a positive operational point within an otherwise weaker earnings result.
Still, buyers should distinguish developer-level cost savings from the quality of the completed property.
The relevant measure for KL48 purchasers will be whether the final workmanship, specifications and common facilities remain consistent with the sale and purchase agreement and marketing commitments.
For shareholders, the improvement demonstrates that EcoFirst maintained some cost discipline despite lower revenue.
Ellington @ Jade Hills Planned For Q3 2026
EcoFirst plans to launch Ellington @ Jade Hills in Kajang during the third quarter of 2026, subject to regulatory approvals.
The mixed-use development has an estimated gross development value of RM400 million.
Ellington is expected to become the group’s next notable project after KL48, although its financial contribution will depend on the actual launch date, buyer response and construction progress.
A project launch does not immediately produce the full GDV as recognised revenue.
Sales must first be secured, while revenue is generally recognised progressively as the development advances.
This means EcoFirst may continue experiencing a softer development contribution during the early stage of Ellington’s launch cycle.
The project’s pricing, unit mix, surrounding supply and position within Jade Hills will influence whether it can achieve sufficient sales momentum.
Kajang and the wider Southern Klang Valley offer a large residential catchment, but buyers also have substantial choice across completed homes, township projects and new high-rise developments.
Ampang Ukay Provides A Longer-Term Pipeline
EcoFirst also highlighted its remaining 67-acre freehold landbank in Ampang Ukay.
The land is intended to support a phased integrated township with an estimated GDV exceeding RM8 billion over approximately 15 years.
This is significantly larger than the proposed Ellington development and represents the group’s main long-term landbank opportunity.
Ampang Ukay benefits from proximity to established Kuala Lumpur and Selangor residential areas, but the eventual value of the site will depend on planning approvals, infrastructure, access and project phasing.
A RM8 billion GDV should not be interpreted as near-term revenue.
Large integrated developments require substantial upfront spending on roads, utilities, earthworks, common infrastructure and amenities.
They are also exposed to changes in market demand, financing costs and competing supply over a lengthy development period.
The landbank nevertheless gives EcoFirst a sizeable future pipeline beyond KL48 and Ellington.
Financial Year End Changed To November
EcoFirst has changed its financial year end from May 31 to Nov 30.
As a result, its next audited financial statements will cover an 18-month period from June 1, 2025 to Nov 30, 2026.
Subsequent financial years will end on Nov 30.
This accounting change may make direct year-on-year comparisons less straightforward during the transition period.
Investors should take care when comparing revenue, profit and project contributions across reporting periods of different lengths.
The longer financial period may include a broader portion of Ellington’s potential launch activity, depending on whether approvals and sales proceed according to the current schedule.
However, the change itself does not alter the underlying economics of EcoFirst’s projects.
What Investors Should Watch Next
The first issue is the final completion and handover progress of KL48.
A smooth completion can support buyer confidence, collections and the group’s development track record.
The second is whether Ellington @ Jade Hills receives the necessary approvals and launches in the third quarter as planned.
The project’s sales performance will determine how quickly EcoFirst can begin replacing the revenue contribution previously generated by KL48.
The third issue is rental performance at South City Plaza and Liberty Arc.
Further improvements in occupancy and rental rates could strengthen recurring income, although the segment remains smaller than property development.
The fourth issue is the Ampang Ukay master plan.
Investors should watch for confirmed development phases, infrastructure plans, product positioning and the timeline for the first launches.
Conclusion: EcoFirst Enters A Project Transition Period
EcoFirst’s sharp fourth-quarter earnings decline was driven mainly by KL48 approaching completion and generating lower progress billings.
The result reflects a transition between major development cycles rather than a new project launch or land transaction.
Recurring rental income from South City Plaza and Liberty Arc provided some support, while improved cost management lifted the group’s gross profit margin.
The next stage of EcoFirst’s growth will depend on the successful launch and execution of Ellington @ Jade Hills, followed by the phased development of its 67-acre Ampang Ukay landbank.
For now, the group faces a timing gap between KL48’s declining contribution and the point when new projects can generate meaningful sales and recognised revenue.
