KUALA LUMPUR (May 24): Paramount Corp Bhd’s first quarter net profit dropped 11.46% to RM6.17 million from RM6.96 million a year earlier.

The group said that while its property division reported higher profit, its education segment saw a decrease in earnings.

Quarterly revenue rose 18% to RM191.44 million from  RM162.25 million previously, thanks to higher contribution from the property division.

The property division saw its revenue increasing 34% to RM122.1 million from RM91.3 million previously.

The segment’s profit before tax increased 68% to RM14.6 million from RM8.7 million a year ago.

The group said the higher earnings were due to the completion of the Utropolis Glenmarie development, as well as contributions from the new phases launched, namely Greenwoods, Salak Tinggi, and Utropolis Batu Kawan, Penang.

Meanwhile, Paramount’s education segment recorded lower revenue of RM69.3 million compared with RM70.8 million a year earlier.

The segment’s profit before tax for the quarter stood at RM9.6 million down from RM12.7 million in the corresponding quarter last year.

This was due to lower contributions from Sri KDU Sdn Bhd, R.E.A.L Education Group and KDU University (PG) Sdn Bhd. However, these lower contributions were cushioned by KDU University College Sdn Bhd’s improved performances arising from higher student enrolment.

In a separate statement, Paramount Group chief executive officer Jeffrey Chew said that while the property market is expected to remain soft, Bank Negara Malaysia’s 25 basis point cut in its overnight policy rate would result in lower loan instalments, boding well for property consumption.

“We look forward to launching seven developments including new phases of existing projects this year, while adopting a more cautious approach in response to market conditions,” he said.

Construction has commenced on the new 1,500-student capacity Sri KDU International School in Berkeley Uptown Klang. When completed, the school is expected to increase Sri KDU’s total capacity by about 50%. The first intake in Berkeley Uptown will be in January 2021, said Chew.

He noted that the education space remains challenging and that price pressure present in the segment will continue.

Its strategic partnership with the University of Wollongong is expected to be completed in the third quarter, and the asset securitisation proposal involving the sale of university campuses and leaseback by tertiary institutions is also expected to be completed by then, and result in recurring rental income for the group.

Paramount’s share price closed 0.48% or a sen lower at RM2.08 yesterday, giving the group a market capitalisation of RM905.69 million.

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