KUALA LUMPUR (Aug 22): Paramount Corp Bhd’s net profit for its second quarter ended June 30, 2019 (2Q19) fell 32.7% to RM28.47 million from RM42.3 million in 2Q18 in the absence of a one-off disposal gain.
This was despite revenue rising 3.26% to RM287.44 million from RM278.37 million last year.
Meanwhile, earnings per share (EPS) for the quarter declined to 6.57 sen from 9.88 sen a year ago.
Paramount Corp declared a first interim dividend of two sen which has an entitlement date of Sept 10 and is payable on Sept 25.
In contrast, the group declared a single-tier dividend of 2.5 sen this time last year.
2QFY19 revenue inched 3.26% higher to RM287.44 million from RM278.37 million last year.
The group attributed its higher quarterly revenue following better contributions from both its property and education divisions, but noted the disposal of 9.4 acres of industrial land in Kota Damansara (KD Land) — which saw RM92.1 million in revenue and RM43.2 million in profit before tax (PBT) — increased 2QFY18 profit.
“The gain of RM43.2 million from the disposal of the Kota Damansara land in 2Q2018 creates the impression that our profitability has dropped. The fact is, excluding the profit from the Kota Damansara land disposal, we would have increased our PBT by 81% from RM35.6 million in 6M2018 to RM64.4 million in 6MFY19,” said Paramount Group CEO Jeffrey Chew in a statement.
For the first half of the financial year ending Dec 31, 2019 (1HFY19) net profit declined 29.71% to RM34.63 million from RM49.27 million last year.
Half-year EPS declined to 8.02 sen from 11.56 sen registered a year prior.
Revenue for the period increased 8.68% to RM478.88 million from RM440.61 million.
On its prospects, Chew said the group expects the property segment to remain soft, but the lowering of the base lending rate (BLR) following Bank Negara Malaysia’s reduction in the overnight policy rate combined with the Government’s extension of the Home Ownership Campaign to Dec 31, 2019 is expected to improve consumer and sentiment and raise property purchases.
As of 1HFY19, the group’s total unbilled property sales stood at RM978 million.
Chew added that following the divestment of its controlling stake in Paramount Education Sdn Bhd, Paramount Education (Klang) Sdn Bhd and Sri KDU Sdn Bhd for a proposed cash consideration of RM540.5 million — which is expected to be completed in 4QFY19 — the group will hold a 20% stake in its pre-tertiary business.
Meanwhile, it sold its controlling stake in its tertiary education division to Australian University of Wollongong-owned company UOWM Sdn Bhd for RM38.5 million in November 2018.
Following the expected completion of the transaction, the group will maintain a 35% equity interest in KDU University College Sdn Bhd and KDU University College (PG) Sdn Bhd.
“Barring unforeseen circumstances, the group is expected to deliver a better financial performance for the financial year ending 31 December 2019,” said Chew
Shares in Paramount closed unchanged today at RM1.30, giving the company a market capitalisation of RM788.69 million, with some 666,900 shares transacted.
As published: https://www.theedgemarkets.com/article/paramount-corp-2q-net-profit-falls-3271-rm2847m-absence-oneoff-disposal-gain