Petaling Jaya, 27 February 2018: Paramount Corporation Berhad (PCB) today announced its full year financial results for FY2017, posting a strong 62% growth in Profit Before Tax (PBT). Group PBT increased from RM112.5 million in FY2016 to RM182.2 million in FY2017, with a net profit of RM150.3 million on the back of a 32% increase on Group revenue to RM758.3 million compared to the previous year (FY2016: RM573.1 million).
This announcement follows on the heels of Paramount’s 4Q2017 results which recorded a 33% Group revenue growth amounting to RM239.7 million (4Q2016: RM179.7 million) and a Group PBT of RM37.7 million (4Q2016: RM37.8 million).
A single tier final dividend of 6.0 sen per share has been proposed for the financial year ended 31 December 2017 (2016: 6.0 sen). In addition, the Board also declared a single tier special dividend of 7.5 sen attributable to the gain derived from the disposal of the Sri KDU school campus to a REIT under its asset-light strategy.
Paramount’s Group Chief Executive Officer, Jeffrey Chew said, “The Group turned in a strong performance in 4Q2017, laying a solid foundation for long-term and sustainable growth. Even with the challenging market conditions, property sales hit a record high while Paramount Education turned in a satisfactory set of results, despite unabated competition in the tertiary sector.”
Revenue for the property division increased by 25% attributable to higher sales recorded from Utropolis Batu Kawan and Sejati Residences developments and higher progressive billings registered from Greenwoods Salak Perdana. PBT for the division increased marginally by 3% at RM85.2 million (FY2016: RM82.5 million) mainly due to the higher PBT registered from the property development, off-set by lower Profit Before Tax of RM1.1 million (FY2016: RM4.9 million) registered by the construction division and higher Loss Before Tax (LBT) of RM9.8 million (FY2016: RM6.1 million) from the property investment division attributable to its commencement of operations in 2Q2016.
“Overall the property outlook continues to improve albeit growth has remained slow and steady. The market continues to be driven by affordable homes as evidenced by Paramount Property’s strong lock-in sales in FY2017 from launches such as Utropolis Batu Kawan in Penang and Greenwoods Salak Perdana in Sepang. Moving forward, we will continue to maintain our successful formula of offering a wide breadth of products at different price points and at different locations to suit the needs of the market,” shared Chew.
Paramount’s current line-up of property developments include Atwater, Section 13 in Petaling Jaya, an integrated development with serviced apartments which include senior friendly living features, corporate offices, and retail components ; Berkeley Uptown in Klang, a 33.3-acre integrated development located at Jalan Goh Hock Huat, anchored by Sri KDU International School; and [email protected] Salak Perdana, the latest parcel to be launched comprising 204 freehold double-storey terrace homes.
Paramount Education, comprising the pre-school, primary and secondary as well as tertiary segments, also saw an impressive 54% increase in revenue registering RM234.7 million (FY2016: 152.4 million) attributed to post-acquisition contribution from the R.E.A.L Education Group (REAL) amounting to RM79.1 million and higher revenue contribution from Sri KDU’s primary and secondary school as well as higher enrolment of new students in KDU University College (KDUUC). PBT for the division excluding non-recurring gain of asset disposal, increased by 41% to RM38.9 million (FY2016: RM27.6 million), as a result of lower LBT from KDU University College and REAL’s PBT of RM14.2 million.
On the education front, Chew said, “Competition will remain intense amidst a highly price-sensitive environment which is further saturated by an influx of new market entrants competing for students. As such, growing student numbers is expected to remain challenging.”
However, he reported that Paramount Education’s prospects remain good, particularly with the increase in new student enrolment of 12% and student population of 10% for KDU University College compared to the previous year. “We are constantly looking out for opportunities to differentiate and grow. For instance, our enlarged K-12 offering offers plenty of potential in the kindergarten and enrichment segments where there are numerous possibilities for student continuity and retention,” Chew said.
He added that continuous efforts are also being made within the tertiary segments to drive the performance of Paramount’s education division. These include identifying unique selling propositions for selected flagship departments or schools, while reinvigorating local and international marketing strategies to further build the KDU brand.