Paramount's 1Q profit slides 14% without disposal gain

KUALA LUMPUR (May 17): Paramount Corp Bhd’s first quarter ended March 31, 2017 (1QFY17) net profit was 14% lower at RM8.29 million, compared with RM9.69 million a year ago, mainly due to absence of a one-off disposal gain from the sale of an apartment last year.

Revenue, however, grew 26% to RM142.94 million, from RM113.33 million, its Bursa Malaysia filing today showed.

In a separate statement, Paramount’s group chief executive officer Jeffrey Chew Sun Teong said the growth in revenue was primarily spurred by the strong 70% take-up rate of the group's newly-launched Utropolis Batu Kawan integrated development in Penang.

“Our property development strategy has been to offer a breadth of products at different price points and at different locations; all innovatively conceptualised to have a strong value proposition. This has proven to be effective, and we will continue on this trajectory,” he said.

Chew also said Paramount launched 725 units of property with a gross development value (GDV) of RM354 million in 1QFY17, comprising 61% condominiums, 26% landed residential and the balance in commercial properties.

“Although the strong sales experienced in 4QFY16 had continued into 1QFY17, we expect a cautious property market in 2017,” he said.

On the education front which contributed about 25% to the group’s total revenue, Chew said the division will continue to face challenges, particularly in the tertiary segment where competition is intense and highly price-sensitive, with education institutions slipping into price wars to compete for new students.

Hence, Chew said Paramount was stepping up local and international marketing efforts, strengthening relationships with recruitment agencies, while introducing new programmes and articulation into universities worldwide to provide more options for students wishing to continue their studies overseas.

“We are also continuing our pursuit of an asset-light strategy to improve the utilisation of real estate assets, which will enhance returns to capital employed and create long term shareholder value,” he said.

Paramount’s share price fell one sen or 0.53% to RM1.89 today, giving it a market capitalisation of RM806.16 million. Year to date, the counter has climbed 37% from RM1.37 on Jan 3. — theedgemarkets.com

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