Petaling Jaya, 14 November 2017: Paramount Corporation Berhad (Paramount) today announced its 9M2017 results for the financial year ending 31 December 2017, posting a group revenue of RM518.6 million and a Profit Before Tax (PBT) of RM144.4 million.
Compared with the corresponding period last year, group revenue increased by 32% (9M2016: RM393.4 million) with higher contribution from both the property and education divisions while PBT increased by 93% (9M2016: RM74.7 million).
Revenue for the property division, increased by 25% to RM350.9 million (9M2016: RM279.5 million) attributable to the higher sales and progressive billings from the Utropolis Batu Kawan, Sejati Residences and Greenwoods Salak Perdana developments. PBT for the division, however, decreased by 7% to RM49.0 million (9M2016: RM52.6million) due to higher losses recorded by the retail mall, Utropolis Marketplace and the lower contribution from the construction businesses. On a more positive note, the Utropolis Batu Kawan, Sejati Residences and Greenwoods Salak Perdana developments contributed higher PBT for 9M2017.
Education division revenue grew by 48% to RM167.7 million (9M2016: RM113.3 million) attributable to REAL Education’s revenue contribution of RM52.5 million as well as higher revenue contribution from Sri KDU and KDU University College stemming from higher new student enrolments. Excluding non-recurring gain, PBT for the division of RM31.2 million was 63% higher compared with 9M2016 (9M2016: RM19.2 million) mainly due to REAL Education’s PBT contribution of RM9.7 million and the lower losses from KDU University College.
Announcing the Group’s 9M2017 results, Paramount’s Group Chief Executive Officer, Jeffrey Chew said “The substantial revenue growth was contributed by the record property sales of RM633 million for 9 months in comparison to RM403 million for the full year of 2016 and by the new stream of income from REAL Education that the Group has acquired earlier this year.”
For the 3Q2017 period, the Group recorded a significantly higher revenue of RM191.1 million an increase of 42% compared with the corresponding year (3Q2016: RM134.8 million) with higher contribution from both the property and education divisions. The Group delivered a higher PBT of RM101.5 million (3Q2016: RM21.7 million) following the completion of Sales and Leaseback agreement with Alpha REIT to dispose of the Sri KDU campus under its asset-light strategy which generated a gain on disposal of RM77.8 million.
Revenue for the property division increased by 26% to RM123.1 million (3Q2016: RM97.4 million) attributable to strong sales and higher level of work progress at the Utropolis Batu Kawan, Sejati Residences and Greenwoods Salak Perdana developments. In line with this, PBT for the division also improved by 11% to RM18.7million (3Q2016: RM16.8 million).
Revenue for education division was significantly higher at RM68 million (3Q2016: RM37.3 million) mainly attributable to REAL Education’s revenue contribution of RM29.6 million as well as higher revenue from Sri KDU. Meanwhile, revenue from the tertiary segment maintained. Excluding the non-recurring gain, PBT for the division was RM12.6 million an increase of 168% growth compared to 3Q2016, which is largely due to REAL Education’s PBT contribution and improved performance of KDU University College in Glenmarie. KDU University College has begun seeing improvement in its performance and had managed to narrow its losses following conscious efforts in cost optimisation and more targeted marketing and promotional activities during the year.
On prospects, Chew remained optimistic on the Malaysian property market. “The encouraging response from the market is positive and the demand for mid-priced and affordable homes has increased.” he said. Given this, the prospect for property division is expected to benefit from the positive market sentiment by promoting and developing properties that are affordably priced and innovatively conceptualised.
On the education front, he elaborated that business remained very competitive and increasingly price-sensitive, with tertiary education providers actively offering promotions and discounts. The K-12 education units will be the main focus, with R.E.A.L Education Group added to Paramount’s fold and Sri KDU’s excellent reputation, with this strong value proposition it will drive the performance of the Paramount Education division, he said.