Paramount 9M property sales hit record RM633m

KUALA LUMPUR (Nov 15): Paramount Corp Bhd, which said yesterday its net profit rose over seven times for the third quarter ended Sept 30, 2017 (3QFY17) following the sale of its Sri KDU campus, has achieved record high property sales of RM633 million for the first nine months of financial year 2017 (9MFY17).

The tally is 57% higher than the RM403 million it recorded for the entire FY16, according to its group CEO Jeffrey Chew in a statement.

The group’s net profit for 3QFY17 jumped to RM85.76 million from RM11.16 million last year, after incorporating the gain from a campus disposal. Quarterly earnings per share bumped up to 20.21 sen from 2.64 sen earlier.

Revenue climbed 42% y-o-y to RM191.1 million from RM134.78 million, with higher contributions from both its property and education divisions, its Bursa Malaysia filing showed.

Its property-division revenue grew 26% to RM123.1 million on strong sales and a higher level of work progress of three key developments, which boosted profit before tax (PBT) for the division by 11% to RM18.7 million.

Meanwhile, its education revision revenue rose 82.3% to RM68 million, mainly attributable to REAL Education Group’s revenue contribution of RM29.6 million and higher revenue from Sri KDU.

Excluding non-recurring gains, PBT for the division was RM12.6 million, up 168% from a year ago, said Paramount.

For 9MFY17, Paramount’s net profit jumped 143% to RM108.72 million from RM44.76 million last year, while revenue climbed 32% to RM518.59 million from RM393.41 million. Its top line was boosted by the record 9MFY17 property sales and by the new stream of income from REAL Education that the group acquired earlier this year, said Chew.

Excluding the non-recurring disposal gain, its education division enjoyed a 63% PBT growth during the period, mainly due to REAL Education’s PBT contribution of RM9.7 million and lower losses of KDU University College, the group said.

But its property-division PBT dipped 7% in the period due to higher losses recorded by retail mall Utropolis Marketplace and a lower contribution from the construction business. “On a more positive note, the Utropolis Batu Kawan, Sejati Residences and Greenwoods Salak Perdana developments contributed higher PBT for 9MFY17,” the group said.

On prospects, Chew remained optimistic about the Malaysian property market. “The encouraging response from the market is positive, and demand for mid-priced and affordable homes has increased,” he said.

However, on the education front, he said business remained competitive and increasingly price-sensitive, with tertiary education providers actively offering promotions and discounts.

Nevertheless, the K-12 education units will be the group’s main focus, with REAL Education and Sri KDU supporting its performance, said Chew.

Shares in Paramount closed two sen or 1.14% lower at RM1.73 yesterday, giving the group a market capitalisation of RM734.03 million.

This article first appeared in The Edge Financial Daily, on Nov 15, 2017.

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