Petaling Jaya, 26 August 2015: Paramount Corporation Berhad (PCB) today announced its financial performance for 1H2015, delivering a 21% growth on group revenue compared with the corresponding period last year. Combined revenue from both its property development and education divisions was RM280.3 million for the period January 1–June 30, 2015, compared with RM232 million in 1H2014. Concurrently, group Profit Before Tax (PBT) increased by 15% to RM55.7 million (1H2014: RM 48.6 million).
Announcing the Group’s 1H2015 results, PCB’s Group Chief Executive Officer Jeffrey Chew said that the Group had laid a good foundation in 1Q2015 with the spurt of commercial property sales ahead of the implementation of the Goods & Services Tax (GST) regime, as well as the increase in recruitment numbers at its new KDU University College (KDU UC) campus in Paramount Utropolis, Glenmarie. This, he added, helped mitigate the softened customer demand in 2Q, when buyers were still adjusting to the implementation of the GST and the effects of the slowing Malaysian economy.
“We are re-strategising our property product pipeline by adapting launches to suit market demand, and offering attractively priced properties in growth locations. Of the Group’s four existing residential developments, three offer price points from RM300,000 to below RM1 million, which will appeal to the current market.
“We will also be launching our second township in the Klang Valley later this year, in Salak Perdana, Sepang. The first phase will comprise value homes priced not more than RM500,000. We are confident that with this combination of property projects, and the steady income from our education division, which is more resilient to market cycles, our performance for 2015 will be within our expectations,” he said.
1H2015 revenue from Paramount Property, PCB’s property division, was RM206.1 million, an increase of 24% from RM165.6 million in 1H2014. This was mainly attributable to higher sales and progressive billings registered from on-going projects namely Sejati Residences in Cyberjaya, Paramount Utropolis in Glenmarie and Sekitar26 Business in Shah Alam. As a result of the higher revenue, PBT for the division increased by 19% to RM46.2 million (1H2014: RM38.7 million).
Paramount Education, PCB’s education division, registered revenue of RM73.6 million for 1H2015, an increase of 13% from the same period last year (1H2014: RM65.3 million) due to higher revenue from the Sri KDU primary and secondary schools, as well as the tertiary schools. While the Sri KDU primary and secondary schools and KDU College Penang recorded higher PBT’s compared with the corresponding period last year, KDU UC incurred higher losses due to the onset of depreciation charges and interest costs on its new campus this year. Overall, PBT for Paramount Education decreased marginally by 6% to RM12.3 million (1H2014: RM13.1 million).
Overall, the performance of the Group in 2Q2015 was within expectations. Group revenue for 2Q2015 was RM115.3 million, a decrease of 13% from 2Q2014 (2Q2014: RM133.2 million), due principally to the cessation of the external construction business. Group PBT was RM22.1 million, a decrease of 11% from 2Q2014 (2Q2014: RM24.8 million), which registered a gain of RM2.6 million from the disposal of lands.
Revenue for Paramount Property in 2Q2015 was RM77.7 million, a decrease of 22% from 2Q2014 (2Q2014: RM99.5 million) due to the Group’s cessation of its external construction business. However, revenue from property development was maintained at about that of the previous year’s corresponding quarter. PBT for Paramount Property was RM17.2 million, a decrease of 15% from 2Q2014 (2Q2014: RM20.2 million) due to the lower contributions from the construction business and the Bandar Laguna Merbok development, as this development nears completion.
Revenue for Paramount Education (comprising the primary and secondary schools and tertiary schools) was RM37.4 million, an increase of 13% from 2Q2014 (2Q2014: RM33 million), due to the higher revenue from both the primary and secondary schools and tertiary schools stemming from higher new student enrolments. As a result of the higher revenue, PBT for the Education Division increased marginally by 5% to RM6.1 million (2Q2014: RM5.8 million).