Paramount Corp 4Q net profit up 25%, proposes 6 sen dividend

KUALA LUMPUR (Feb 28): Paramount Corp Bhd's net profit rose 24.6% to RM30.05 million in the fourth quarter ended Dec 31, 2018 (4QFY18) from RM24.12 million a year ago,

Paramount group chief executive officer Jeffrey Chew (pictured) said the property developer achieved sales target of RM1 billion, surpassing last year’s results by 23%.

The group also reported higher earnings per share of 7.02 sen for 4QFY18 compared with 5.69 sen for 4QFY17.

Quarterly revenue increased 7.6% to RM256.77 million from RM238.69 million a year ago, on higher contribution from its property and education divisions.

In a filing with Bursa Malaysia today, Paramount said revenue of the property division increased by 10% year-on-year to RM186 million in 4QFY18, mainly from the Greenwoods, Salak Tinggi and the Utropolis Batu Kawan, Penang developments.

"The education division recorded a revenue of RM70.8 million in 4QFY18, marginally higher fromRM69.6 million a year ago, mainly due to the lower amortisation of goodwill arising from the acquisition of the R.E.A.L Education Group," it added.

The group has proposed a final dividend of 6 sen per share for the financial year ended Dec 31, 2018 (FY18), subject to the approval of the shareholders at the forthcoming annual general meeting.

The improved quarterly performance, however, failed to lift Paramount's net profit for full FY18, which fell 29% to RM94.93 million from RM133.65 million in the previous year. Revenue, however, grew 19% to RM907.67 million from RM763 million in FY17.

Going forward, Chew said the group foresees the property sector to remain soft, but there is hope for recovery given the initiatives introduced by the government in Budget 2019.

"Moving forward, Paramount will continue to pursue our tried and tested strategies, albeit adopting a more cautious approach in responding to market conditions.

"At the same time, we will explore opportunities to unlock the value of our investments in line with our strategic plan of becoming a pure-play property company,” he said in a separate statement.

Paramount plans to launch seven projects including new phases of existing projects in 2019, with an estimated gross development value (GDV) of RM1.3 billion.

This includes expanding its footprint to Klang, Selangor with an integrated property-education development project of 33.3 acres located at Jalan Goh Hock Huat, which will be anchored by a new 1,500-student capacity Sri KDU International School campus.

ATWATER Section 13, Petaling Jaya commercial development will be launched to complement the residential units that were 84% sold last year.

Up north, Paramount will be launching the third phase of its Utropolis serviced apartments in Batu Kawan. The opening of the KDU Penang University College, Batu Kawan campus is also targeted for September.

Chew said Paramount will also be replenishing its land bank in 2019 by another 41.4 acres in Cyberjaya, Selangor with a projected GDV of RM570 million pursuant to the expected completion of the land sale and purchase in 1Q 2019.

"The group is working towards launching the first phase of the development in 4Q 2019 in line with the strategy to improve the speed to market for better cost management," he added.

In line with the group’s asset light strategy, Paramount will jointly develop a transit-oriented development with projected GDV of RM1 billion in Section 14, Petaling Jaya with the land owner, Kumpulan Hartanah Selangor.

On the co-working space front, the group is planning to open another three co-working sites in 2019, expanding its footprint in the Klang Valley.

Shares in Paramount closed five sen or 2.27% lower at RM2.15 today, with 59,500 shares traded, giving it a market capitalisation of RM942.2 million. — theedgemarkets.com

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