Paramount Q2 earnings 134% higher on disposal of land

PETALING JAYA: Paramount Corp Bhd’s net profit for the second quarter to June 30, 2018 jumped 133.92% to RM42.3mil mainly attributable to the disposal of 9.4 acres of industrial land in Kota Damansara (KD). Without this contribution, profits would have been slightly lower.

Earnings per share jumped to 9.88 sen from 4.28 sen.

Meanwhile revenue jumped 46.72% to RM278.37mil backed by higher contributions from its education and property segments.

The company also announced a single tier interim dividend of 2.5sen per share.

In a statement to Bursa, Paramount said that the KD land disposal was to unlock the value of the land, and to utilise the cash proceeds to acquire new land bank that is able to generate higher returns within a shorter turnaround time and to reduce bank borrowings.

Excluding the KD land disposal, the profit before tax for the second quarter of 2018 was lower than the corresponding period in 2017 mainly due to many projects that had been handed over since the second quarter of the previous year.

“Conversely in the second quarter, there were many projects at the initial stage of the development such as AtWater, Petaling Jaya, and Keranji (a component of the Greenwoods township development) which have achieved encouraging sales to-date,” it said.

For the six month basis, net profit increased 86.22% to RM49.27mil contributed by the disposal of the KD land apart from better contribution from the education segment. Revenue increased 30.94% to RM440.61mil.

Paramount group chief executive officer Jeffrey Chew in a statement said the group’s property sales of RM598mil for the six month period was the Group’s record high.

Paramount launched 1,160 units in the first half of the year, and sold 858 units, inclusive of those launched earlier. It launched 698 units in Selangor, and achieved sales of RM448mil from the 528 units sold.

In Penang and Kedah, it launched 462 units, and sold 330 units worth RM150 million.

“The Group’s unbilled sales as at June 30 had also soared to RM866mil.

“This would contribute positively to our performance in the future. We target RM1bil sales this year, backed by new launches of about RM1.2bil.”

Encouraged by the strong take-up of the projects launched in March 2018, at Batu Kawan in Penang, Sepang, and Petaling Jaya, Chew said Paramount would launch the second phases of Suasana (at Batu Kawan) and Keranji (at Salak Perdana, Sepang), and the commercial development at Atwater (in Petaling Jaya) in the second half of the year.

Chew said Paramount would also launch later in 2018, a mixed development project around Klang’s main business and commercial area, where it would also build a new Sri KDU international school, thus deriving synergy from its property and education businesses.

Moving forward, Chew said that in line with Paramount’s asset-light strategy, it will continue to pursue sale and leaseback of its education assets, if such opportunities arise.

“For our property segment, we will build strategic partnerships to undertake development projects on joint-venture basis.

“In addition, the Group seeks to unlock value through the monetisation of land bank and strategic divestments,” said Chew.

Article from The Star