Paramount 1Q profit doubles as its property business has fewer operational disruptions

KUALA LUMPUR (May 30): Property developer Paramount Corp Bhd's net profit for the first quarter ended March 31, 2022 (1QFY22) jumped to RM5.02 million from RM2.29 million a year prior, on stronger contribution from its property division amid fewer operational disruptions following the reopening of the economy as the country transitions into endemicity.

The group's revenue grew 10.73% to RM168.1 million from RM151.81 million, its bourse filing showed. Earnings per share rose to 0.81 sen from 0.37 sen. No dividend was declared.

The company attributed the improved financial performance to higher profit from the property division, though its performance for the quarter was also dampened by the higher loss before tax (LBT) reported by the investment and others division.

"Among factors that contributed to the higher LBT were the depreciation expense and finance cost in respect of the Mercure Kuala Lumpur Glenmarie Hotel, which had its soft opening in November last year," it said.

Its property division pulled in revenue of RM163.9 million for 1QFY22, up 10% from the same period last year when it recorded RM149.6 million, due to a larger base of ongoing development projects.

"The top three revenue contributors in (the first quarter) were ATWATER development in Selangor, Sejati Lakeside development in Selangor and Bukit Banyan development in Kedah," it said.

Its coworking division pulled in revenue of RM2.2 million for 1QFY22, 57% higher than the RM1.4 million previously, mainly due to higher contribution from its Tropicana Gardens outlet as well as revenue from Scalable Malaysia — Paramount’s end-to-end consult, design, build and manage workspace solutions provider.

In a separate statement, Paramount Group CEO Jeffrey Chew said the reopening of the economy bodes well for the property market and hoped that the group could regain its strong sales momentum that was disrupted by the pandemic.

"The 1QFY22 gross domestic product (GDP) expansion of 5%, coupled with increasing normalisation in economic activity, especially with the reopening of international borders and improving labour market conditions, are positive indicators,” he said.

He added that despite the Overnight Policy Rate (OPR) hike of 25 basis points, the prevailing low interest environment remains conducive for property demand. "Malaysians with financial means will still look to property as a hedge against inflation," he said.

Nevertheless, the group is still mindful that the property sector's recovery could be dampened by Covid related uncertainties, aggressive interest rate hike, rising cost of living and lower spending power.

Meanwhile, he said the group plans to launch six projects, including new phases of existing projects, this year, with a collective estimated gross development value of RM1.3 billion.

Among the new projects lined up are: the Arinna Kemuning Utama smart homes in Shah Alam, The Atera, a transit-oriented development project in Petaling Jaya situated next to the Asia Jaya Light Rail Transit Station, and the Sejati Lakeside 2 landed homes in Cyberjaya.

Shares in Paramount closed 1.5 sen higher at 74.5 sen on Friday (May 27), giving it a market ccapitalisation of RM460.20 million.

Edited by Tan Choe Choe

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