- Group chief executive director and executive director Jeffrey Chew Sun Teong said the 10% targeted sales growth is “conservative”, considering weaker market sentiment this year compared to last year amid concerns over high inflation and economic prospects.
KUALA LUMPUR (June 15): Paramount Corp Bhd has set a sales target of RM1.2 billion for the financial year ending Dec 31, 2023 (FY2023), representing about a 10% increase against the RM1.1 billion sales achieved in FY2022.
Speaking at a press conference after the group's annual general meeting on Thursday (June 15), group chief executive director and executive director Jeffrey Chew Sun Teong (pictured) said the 10% targeted sales growth is “conservative”, considering weaker market sentiment this year compared to last year amid concerns over high inflation and economic prospects.
“The sentiment has changed in a way we do not deny. We do feel weaker market sentiment when compared to last year. But what is happening in the property industry itself is the supply has shrunk,” he said.
Citing the National Property Information Centre (Napic) report, Chew said the number of completed houses dropped to around 90,000 units during the Covid-19 period due to delays in construction and launches, as compared to around 120,000 units pre-pandemic in 2018 and 2019.
In FY2022, the property market was helped by the country's economic reopening, resulting in Paramount’s property sales surging more than 50% to RM1.1 billion or 1,612 units sold, compared to RM716 million or 1,062 units sold in FY2021.
This year, Chew is of the view that tight market supply and fears over price increases — due to rising operating costs — will continue to prompt home buying activity. Higher raw material prices and labour cost, as well as the impact from Covid-19, were among the reasons that led to property developers slowing down their new launches.
To encourage developers to gear up new property launches to fill the supply gap, Chew said property prices will have to increase by about 5% and 8%.
For the case of Paramount, average prices for new launches are expected to rise 8% to 10%, to account for the increase in operating costs, he shared.
“If the demand turns strong, I would expect RM1.5 billion in sales this year,” said Chew, noting that the group is targeting to launch new properties with a gross development value worth RM1.5 billion in FY2023, as compared to RM1.2 billion in FY2022.
With property sales projected to increase 10% this year, Chew expects the group to deliver better financial performance.
For the first quarter ended March 31, 2023 (1QFY2023), Paramount posted a net profit of RM11.58 million, more than double the RM5.02 million achieved in the same quarter last year. This was on the back of higher revenue of RM194.56 million, compared to RM168.10 million previously.
While the property business will continue to be the bread and butter for Paramount, the group is looking to expand its co-working business to ride on the recovery wave in the co-working industry.
It operates and manages 114,945 sq ft of co-working space in five locations in the Klang Valley. From there, it plans to expand in three locations this year, including one in Tropicana Garden, Kota Damansara. The other two locations are still under negotiations.
Its co-working space reported its maiden quarterly profit before tax of RM100,000 in 1QFY2023, against a loss before tax of RM300,000 in 1QFY2022, as revenue improved to RM2.9 million from RM2.2 million previously.
Shares in Paramount closed down 0.5 sen or 0.62% to 80.5 sen, translating into a market capitalisation of RM501 million.
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