Paramount 2Q net profit doubles on land disposal

KUALA LUMPUR (Aug 21): Paramount Corp Bhd’s net profit more than doubled for its second quarter ended June 30, 2018 (2QFY18) to RM42.30 million or 9.88 sen per share, from RM18.08 million or 4.28 sen per share a year ago, mainly driven by gains realised from a land disposal.

Quarterly revenue, meanwhile, increased 46.7% to RM278.37 million, from RM189.72 million in the same quarter last year.

The property developer declared an interim single tier dividend of 2.5 sen per share, payable on Sept 28.

In an exchange filing today, Paramount attributed improvement in its earnings to the disposal of a 9.4-acre industrial land in Kota Damansara, which had contributed revenue and a profit before tax of RM92.1 million and RM43.2 million respectively.

Excluding the land disposal, Paramount said profit before tax during the quarter under review was lower than 2QFY17, as many projects had been handed over since 2QFY17.

In comparison, projects during the quarter under review were at the initial development stage. These include AtWater, Petaling Jaya, and Keranji (a component of the Greenwoods township development), which it said has achieved encouraging sales to-date.

Meanwhile, profit before tax for its education division came in lower at RM9.5 million, compared with RM11.7 million previously, although revenue grew 5.4% to RM68.5 million on the back of higher student enrolment at KDU Unversity College in Glenmarie.

Paramount said this was largely due to the rental expense incurred by Sri KDU schools under the sale and leaseback agreement with Alpha Real Estate Investment Trust, which had commenced on Sept 30, 2017.

For the first half of the year (1HFY18), net profit stood 86.2% higher at RM49.27 million, from RM26.46 million in the same period last year. Cumulative revenue grew 30.9% to RM440.61 million, from RM336.51 million in 1HFY17.

In a separate statement, Paramount’s group chief executive officer Jeffrey Chew said property sales hit a record high in 1HFY18.

“The group’s unbilled sales as at June 30 had also soared to RM866 million. This would contribute positively to our performance in the future. We target RM1 billion sales this year, backed by new launches of about RM1.2 billion,” Chew added.

Paramount is seeking to unlock more value, through the monetisation of land bank and strategic divestments, he said.

“In line with our asset-light strategy, we will continue to pursue sale and leaseback of our education assets, if such opportunities arise. For our property segment, we will build strategic partnerships to undertake development projects on a joint-venture basis,” Chew said.

Shares of Paramount closed one sen or 0.54% higher at RM1.87 today, bringing a market capitalisation of RM800.87 million.

Article from The Edge