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Paramount expects dampened performance in 3Q amid MCO reinstatement

KUALA LUMPUR (Sept 6): While Paramount had returned to the black in its second quarter ended June 30, 2021 (2QFY21), the group, which has joined a consortium to bid for a digital banking licence, said it is expecting its financial performance to be hampered in the subsequent quarter amid the Covid-19 pandemic and the ensuing lockdowns.

Paramount group chief executive officer Jeffrey Chew said 2021 will likely be a damper year for the group because of the prolonged pandemic.

“While the numbers seem to be quite good, I have to say that 2021 is actually going to be quite a damper year because of the continued prolonged Covid-19 pandemic and the lockdown,” he told the investment and media briefing on the group’s quarterly results.

Chew noted the Enhanced Movement Control Order (EMCO) enforced on certain localities in Selangor in July had resulted in the group having to stop work at five of its project sites.

In addition, Paramount also detected Covid-19 infections at several of its sites, which led to the sites being shut down in order to conduct testing on its workers.

Chew said it took some time to get operations at these affected sites up and running again every time they are shut down, although as of today, all of its construction sites are in operation.

“We are operating roughly at 60% capacity. We hope that by end-September we can move closer to 100%,” he explained, although he acknowledged that it would be challenging to return to full capacity given the prevailing supply chain issues faced by the property development and construction industry.

Chew stressed that the group has taken measures to meet all the standards set by the government, especially in terms of vaccinating its workforce.

For 2QFY21, the group posted a net profit of RM1.62 million, versus a net loss of RM4.01 million in the previous year’s corresponding quarter, due to the low base effect as Paramount was affected by the first MCO, which commenced in March 2020.

Its quarterly revenue almost doubled to RM127.45 million from RM64.2 million.

On a quarter-on-quarter basis, both its revenue and net profit fell 16% and 29.3% respectively.

Paramount's unbilled sales stood at RM1.03 billion as at June 30, marking the fourth consecutive quarter of unbilled sales exceeding the RM1 billion mark, Chew pointed out.

For the foreseeable future, however, Chew said property development will remain the main core business of Paramount.

“We do see ourselves expanding regionally, doubling up every three to five years if the market is good for the property business. It may not be the most profitable business in Malaysia, but it is profitable if you do it right,” he said.

In terms of launches for the second half of 2021, about 68% or RM646 million of launches comprise high rise projects, while the remainder would be made up of landed projects.

About 43% of these launches are new projects, while the rest are launches at existing projects. In total, the group is expecting to launch RM944 million in gross development value of projects for the latter half of the year.

Paramount rose 0.5 sen to 79 sen as at the noon break, giving a market capitalisation of RM489.17 million.

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