Paramount Corp eyes profit boost with EWI stake, targets 30% earnings from overseas projects by 2030

• Paramount chief executive officer Jeffrey Chew Sun Teong: “We have grown five times over the last ten years and reached RM1 billion in sales. We are not going to grow five times more in Malaysia over the next ten years. So, we want to see a layer of non-Malaysian contribution coming in.”

KUALA LUMPUR (June 6): Real estate developer Paramount Corp Bhd (KL:PARAMON) is aiming for 30% of its annual profit to stem from overseas property projects by 2030, supported by its recent acquisition of a 21.5% stake in Eco World International Bhd (EWI) (KL:EWINT), as domestic orders are expected to saturate.

“We have grown five times over the last ten years and reached RM1 billion in sales. We are not going to grow five times more in Malaysia over the next ten years. So, we want to see a layer of non-Malaysian contribution coming in,” said Paramount chief executive officer Jeffrey Chew Sun Teong. (picrtured)

Chew said Paramount’s only overseas property project is a 29-storey condominium in Bangkok, developed through a joint venture with a Thai developer in 2020, with revenue expected to be recognised over the next two financial years, contributing roughly 2% to the group's profit.

He said the company is gearing up for overseas expansion, with its stake acquisition in Eco World International Bhd (EWI) — which focuses on real estate development in the United Kingdom and Australia — expected to contribute roughly 20% of its profit.

Chew also said Paramount will likely get "one or two" board seats, depending on EWI's decision, after Paramount emerged as the second largest shareholder in the company last month.

Furthermore, Chew said Paramount is looking to invest in offshore property projects that are of a smaller scale.

“It could be industrial factories, commercial complexes or small residential projects. We plan to enter on a structured equity level for a short-term basis between one to five years so that we can get returns on a project basis,” he told reporters during a briefing after the group's annual general meeting.

“We are working with various partners across countries such as the US, the UK, Singapore, Japan and maybe one or two European countries. All are established markets,” he said. “We are putting our bets, 80% on developing markets, and 20% on established markets.”

For the financial quarter ended March 31, 2024 (1QFY2024), net profit fell 33.44% to RM7.71 million from RM11.58 million a year earlier, as Paramount’s property segment was hit by lower work progress and sales.

Revenue of its property segment declined 13% to RM161.8 million, from RM185.8 million in 1QFY2023. Chew attributed the decline to the delay in property launches, adding that the group shall see stronger performance in the coming quarter.

For FY2023, Paramount's revenue jumped 19.4% to RM1.01 billion from RM847.46 million, due to higher property sales. Net profit surged 37.6% to RM82.94 million from RM60.2 million, partly due to disposal gains of its education business investments.

For the full year ending Dec 31, 2024 (FY2024), the group is targeting property launches amounting to RM2.4 billion and total sales amounting to RM1.4 billion.

“We have seen the property demand increasing by 20% over the past two years, while the supply has declined by 25% as developers were careful with their positioning. We are very confident in achieving our target for the year,” Chew added.

Meanwhile, EWI returned to the black in its first financial quarter ended Jan 31, 2024 (1QFY2024), with a net profit of RM182,000, compared to a RM30.82 million net loss in 1QFY2023.

Revenue jumped 41.6% to RM31.67 million from RM22.37 million previously, driven by the sale of higher-priced commercial units.

Shares of Paramount rose one sen to RM1.12 at Thursday's market close, valuing the group at RM697.45 million. Meanwhile, shares of EWI closed up half a sen at 39.5 sen, valuing the group at RM936.15 million.

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