Declares 4.5 sen final dividend and 29 sen special interim dividend
Petaling Jaya, 28 February 2020: Paramount Corporation Berhad (Paramount) reported that the Group registered a 13% increase in profit attributable to ordinary shareholders at RM104 million for FY2019 (FY2018: RM91.8 million).
For 4Q2019, the Group’s profit attributable to ordinary shareholders recorded a 45% increase at RM39.1 million compared to the corresponding quarter last year (4Q2018: RM26.9 million).
Paramount also announced a 4.5 sen per share single tier final dividend for the financial year ended 31 December 2019, subject to shareholder’s approval in the coming annual general meeting.
Paramount Group CEO Jeffrey Chew said, “In spite of the challenging market conditions, the Group has performed commendably. We are starting 2020 on a strong financial footing with a stronger balance sheet and lower gearing following the completion of our pre-tertiary education business disposal. We are now focusing on new property projects, looking for land banks and going into joint ventures locally and overseas.”
Paramount had announced in June 2019 that RM177 million would be allocated as special dividend to shareholders after the divestment of controlling stakes in its pre-tertiary education business comprising Sri KDU Schools and the R.E.A.L Education Group to Prestigion Education Sdn Bhd. The transaction was completed on 20 February 2020.
Arising from this, the Board of Directors declared a special interim dividend of 29 sen per share for the financial year ending 31 December 2020 that will be paid to shareholders on 23 April 2020.
Continuing operations – Property division
For FY2019, revenue for the property division had risen by 11% to RM700.3 million (FY2018: RM631.2 million) contributed mainly by its developments at Utropolis Glenmarie, Shah Alam; Utropolis Batu Kawan, Penang and Greenwoods, Salak Tinggi, Sepang.
Excluding the gain from the disposal of the Kota Damansara land that was completed in 2Q2018, the FY2018 profit before tax (PBT) of the property division would RM87.2 million. Hence, the FY2019 PBT of RM117.5 million would be RM30.3 million or 35% higher.
Discontinued operations – Education division
For FY2019, the education division recorded a revenue of RM249.9 million which was 9% lower than the RM275.2 million achieved in FY2018. This is mainly due to the completion of the sale of its controlling stake in KDU university colleges (now known as UOW Malaysia KDU), in September 2019 (KDU Disposal).
PBT for the education division in FY2019 was 82% higher at RM74.6 million than that for FY2018 mainly due to the gain of RM25.4 million recognised for the KDU Disposal. The improved PBT was also contributed by the non-depreciation of Sri KDU and R.E.A.L Education Group assets pending completion of Paramount’s divestment of its controlling stake in the pre-tertiary education business.
Paramount maintains a 35% equity stake in the tertiary education business and a 20% equity stake in the pre-tertiary education business.
“We foresee that the property sector will remain soft. Nevertheless, the lower lending rate following the reduction in the Overnight Policy Rate by Bank Negara Malaysia in January 2020 and the recent Economic Stimulus Package are expected to improve consumer sentiments for the purchase of properties,” said Chew.
He added that Paramount will be launching six projects (including new phases of existing projects) to the tune of RM1.2 billion in gross development value (GDV).
“The Group’s total unbilled sales of RM913 million as of 31 December 2019 is also expected to contribute positively to the Group’s financial performance in the near future. In addition, several parcels of development land have been identified for sale,” he said.
In January 2020, Paramount ventured overseas when it acquired 49% equity interest in Navarang Charoennkorn Company Limited, a property developer from Thailand. Its maiden project, Na Reva, is a premium condominium project situated close to the Bangkok central business district and overlooking the Chao Phraya River. This was launched in February.
In line with global trends and the increasing demand for coworking spaces, the Group will also be focusing on expanding its footprint in the market with Co-labs Coworking adding a new location this year.
“Moving forward, the Group will continue to focus on driving better operational excellence and profitability while leveraging on synergies from our strategic partners,” said Chew.
Note to Editor:
Although Paramount had two core businesses (property and education) in FY2019, accounting reporting standards require that Paramount’s reporting of its Group revenue and Group PBT for FY2019 cover only its ‘continuing operations’, mainly property.
Contributions from the Education segment (which is now referred to as ‘discontinued operations’ following Paramount’s divestments) are not included in Group revenue and Group PBT. For like-to-like comparison, the FY2018 financial results have accordingly been restated in adherence to reporting standards.
The financial results for ‘discontinued operations’ are still reported, but below the profit after tax from continuing operations. The results of both continuing and discontinued operations are reflected in profit for the year.