KUALA LUMPUR (Aug 23): Paramount Corp Bhd, which reported a lower second-quarter (2Q) net profit yesterday following the absence of a disposal gain, announced that Benjamin Teo Jong Hian, the son of chairman and executive director Datuk Teo Chiang Quan, has joined the group’s board of directors as an executive director.
An honour’s graduate in politics and sociology, the 30-year-old started in Paramount as a management trainee in 2012. Rising through the ranks over the years, he became chief executive officer (CEO) of Paramount Property Development Sdn Bhd (PPD) in March 2018.
PPD is the group’s subsidiary undertaking Paramount’s Atwater integrated development in Section 13, Petaling Jaya, Selangor. It is slated to become Paramount’s signature property development project in the Klang Valley due to its strategic location and high-value proposition.
“As PPD’s CEO, Teo (Jong Hian) spearheaded the successful launch of Atwater, and he will be overseeing this development as well as all other developments to be undertaken by PPD,” the group said in a filing with Bursa Malaysia yesterday.
Before helming PPD, the group said Jong Hian was the director of innovation for the group’s property division (Paramount Property), where he led his team in exploring new concepts to enhance Paramount Property’s offerings, including Co-labs Coworking, a co-working office space total solutions provider growing from a space in 2016 to four spaces to date, with an almost full occupancy at its space in The Starling Mall, Petaling Jaya.
Jong Hian currently has a 0.128% direct interest in Paramount, and an indirect 0.063%. His father controlled a 27.477% stake as at July 31.
Separately, Paramount said its net profit for the second quarter ended June 30, 2019 (2QFY19) fell 32.7% year-on-year to RM28.47 million from RM42.3 million, as the previous year’s profit was boosted by the disposal of a 9.4-acre (3.804ha) industrial plot in Kota Damansara, Petaling Jaya.
Its quarterly revenue rose 3.26% to RM287.44 million from RM278.37 million last year, following better contributions from its property and education divisions. It declared a first interim dividend of two sen per share, payable on Sept 25.
“The RM43.2 million gain from the disposal of the Kota Damansara land in 2QFY18 creates the impression that our profitability has dropped. The fact is, excluding the profit from the Kota Damansara land disposal, we would have increased our PBT (profit before tax) by 81% from RM35.6 million for 6MFY18 (the cumulative six months of financial year 2018) to RM64.4 million for 6MFY19,” said Paramount group CEO Jeffrey Chew in a statement, referring to an 18% PBT drop to RM64.41 million for 6MFY19, from RM78.79 million for 6MFY18.
Hence, its net profit for the first half of FY19 (1HFY19) retreated 29.71% to RM34.63 million from RM49.27 million a year ago, despite revenue growing 8.68% to RM478.88 million from RM440.61 million. In the cumulative period, it achieved property sales of RM310 million.
Chew said the group expects the property segment to remain soft, but noted the lowering of the base lending rate following a reduced overnight policy rate, combined with the government’s extension of the Home Ownership Campaign to Dec 31 is expected to improve consumer sentiments and raise property purchases.
As at end-June, the group’s unbilled sales stood at RM978 million. “Barring unforeseen circumstances, the group is expected to deliver a better financial performance for FY19,” Chew added.
Paramount shares closed unchanged yesterday at RM1.30, with a market capitalisation of RM788.69 million.
This article first appeared in The Edge Financial Daily, on Aug 23, 2019.