Paramount maintains 1Q earnings as RM1.47 bil unbilled sales provide visibility despite softer revenue

PETALING JAYA (May 23): Paramount Corp Bhd maintained stable first-quarter earnings for the period ended March 31, 2026, supported by resilient property contributions and a sizeable unbilled sales pipeline, despite lower revenue amid a more measured launch strategy and softer market conditions.

Net profit attributable to shareholders stood largely unchanged at RM14.4 million compared with RM14.43 million a year earlier, while revenue declined 29.7% to RM152.2 million from RM216.5 million, according to the group's Bursa Malaysia filing yesterday. Profit before tax eased 17.7% to RM18.6 million from RM22.6 million previously.

Despite the lower top line, Paramount continued to generate positive earnings while maintaining strong operating cash flow and expanding its landbank. The group attributed the weaker performance to fewer ongoing projects, the absence of new launches during the quarter, slower revenue recognition from projects in early construction stages, and softer sales amid geopolitical uncertainties.

Property division remains key earnings driver

Paramount's property segment remained the group's largest earnings contributor, generating RM140.1 million in revenue and RM22.6 million in profit before tax during the quarter.

Although segment revenue fell 31.9% from a year earlier, the group said this was mainly due to a more cautious launch programme and the timing of construction progress recognition for several sizeable high-rise developments. The company noted that revenue recognition for such projects typically accelerates during mid-to-late construction stages.

The quarter's main contributors were The Atera in Selangor, Bukit Banyan in Kedah, and The Ashwood in Kuala Lumpur.

Sales during the quarter reached RM152 million in gross development value (GDV), driven mainly by existing launches and completed inventories, including:

(1) The Atera in Petaling Jaya
(2) Bukit Banyan in Sungai Petani
(3) Sejati Residences in Cyberjaya
(4) Commercial units at Atwater in Petaling Jaya

No new projects were launched during the quarter, compared with RM62.4 million in launches a year earlier. The Ashwood — launched in May 2024 — also contributed minimally as the luxury high-rise development became fully sold during the quarter.

As at March 31, 2026, Paramount's unbilled sales stood at RM1.47 billion, comprising RM1.276 billion from the central region and RM198 million from the northern region, providing a degree of near-term earnings and cashflow visibility.

Coworking expansion weighs on near-term earnings

The group's coworking division recorded lower revenue of RM4.7 million versus RM6.6 million previously, mainly due to the absence of design-and-build contributions from Scalable Malaysia. Loss before tax widened slightly to RM0.8 million from RM0.5 million, partly reflecting additional fixed costs from newly opened coworking spaces.

Paramount continued expanding the Co-labs Coworking network during the quarter, including its first outlet outside the Klang Valley at Mid Valley Southkey in Johor Bahru, alongside a new single-tenant workspace at KL Eco City.

The group plans to grow its recurring income base through a hospitality-oriented coworking concept at select prime locations, with a flagship space targeted to commence operations at Sunway Square, Subang Jaya, in mid-2026.

Investment segment improves

The investment and other businesses segment delivered improved performance, with revenue rising 11% to RM8.1 million from RM7.3 million previously. Loss before tax narrowed significantly to RM3.3 million from RM7.9 million, supported by improved contributions across business units and earnings from newly acquired associate Envictus International Holdings Ltd.

On a quarter-on-quarter basis, Paramount's profit before tax fell from RM69.3 million in the preceding quarter, which had benefited from RM49.8 million in gains from the disposal of investment properties.

Launch pipeline and landbank expansion

Looking ahead, Paramount plans to concentrate most of its launches in the second half of 2026, when market visibility and buyer confidence are expected to improve.

Planned launches include:

(a) A new development in Kulim, Kedah, intended to benefit from ongoing expansion activity around Kulim Hi-Tech Park
(b) A landed residential project in Section U9, Shah Alam
(c) Two blocks of high-end serviced apartments in Kuala Lumpur's U-Thant enclave, expanding the group's presence following the success of its fully sold developments, The Ashwood and The Atrium

The group said these projects are expected to launch following completion of the relevant land acquisitions.

As at March 31, 2026, Paramount had 617.2 acres of undeveloped land, including newly acquired land in Kulim, Kedah. The group has also signed five land purchase agreements pending completion, which would add another 78.3 acres with an estimated GDV of RM3 billion.

Whilst acknowledging heightened geopolitical uncertainties and more cautious consumer sentiment, Paramount said it remains focused on disciplined cost management, accelerating sales conversion, and maintaining a market-responsive launch strategy.

Strong operating cash flow

Despite lower earnings, Paramount generated RM128.8 million in net cash from operating activities during the quarter, compared with a net operating cash outflow of RM2.6 million a year earlier. Cash and bank balances stood at RM321.9 million as at March 31, 2026.

Total borrowings increased to RM1.28 billion from RM1.06 billion a year earlier, mainly due to financing raised for strategic investments and land acquisitions, including funding for the acquisition of a 28% stake in Envictus International Holdings, Sukuk Wakalah issuance for refinancing purposes, and Sukuk Murabahah issuance for landbank acquisitions.

Net assets per share eased slightly to RM2.36 from RM2.40 at end-December 2025. The board did not recommend any dividend for the quarter.

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