Revenue up by 39% to RM218.9mil, sales up by 82%
PETALING JAYA, 27 November 2020: Paramount Corporation Berhad (Paramount) has reported a leap in its Profit Before Tax (PBT) from its continuing operations to RM36.6 million in 3Q2020 (3Q2019: RM7.4 million). The 394% jump, year-on-year (y-o-y), was attributed to higher profit contribution from its property division, lower non-recurring expenses, as well as lower interest expense.
Paramount’s revenue from continuing operations was 39% higher at RM218.9 million (3Q2019: RM157.1 million) while property sales rose by 82% y-o-y to RM312 million.
PBT for Paramount’s property division for 3Q2020 had doubled to RM36.8 million (3Q2019: RM18.2 million) on the back of higher revenue, and savings from cost optimisation and rationalisation efforts.
Its property division’s revenue had grown by 39% to RM216.5 million in 3Q2020 (3Q2019: RM155.4 million) with the biggest revenue contributions coming from Utropolis Batu Kawan in Penang, Bukit Banyan in Kedah and Greenwoods Salak Perdana in Selangor.
Paramount Group CEO Jeffrey Chew said, “Our sales in Q32020 was 82% higher than that of the corresponding period last year, mainly from project launches this year, which are Sinaran at Utropolis Batu Kawan, Cendana at Greenwoods Salak Perdana and Phase 2 of Sejati Lakeside. Despite the Movement Control Order (MCO) disruptions, our 9M2020 sales had grown by 5% to RM503 million (9M2019: RM481 million), thanks to our strong third quarter sales.”
“Our unbilled sales of RM1 billion as at 30 September 2020 was also a milestone achieved. For the final quarter of this year, we are working hard to capitalise on the strong sales momentum we have generated. We are intensifying our promotional activities to boost sales, including launching virtual sales consultation for our Sejati Lakeside and Berkeley Uptown projects,” he added.
Chew added that the low interest rate environment coupled with the reintroduction of the government-initiated home ownership campaign since June 2020 is expected to continue to spur buying interest in properties.
Paramount’s profit attributable to ordinary equity holders for 3Q2020, however, was lower by 35% at RM19.8 million (3Q2019: RM30.3 million) because the financial results of its pre-tertiary and tertiary education businesses were no longer consolidated after the company divested its controlling equity stakes in February 2020 and September 2019, respectively. In addition, 3Q2019 included a non-recurring gain from the disposal of the tertiary education business of RM23.3 million.
Review of 9 months
Despite a stronger third quarter results from continuing operations, the Group’s PBT for 9M2020 from continuing operations had dropped by 24% to RM38.8 million. This is mainly due to disruption to construction activities during the MCO which had negatively affected Paramount’s results in 2Q2020.
The Group’s profit attributable to ordinary equity holders of Paramount for the first nine months this year, however, surged by 644% to RM483.1 million (9M2019: RM64.9 million), contributed by the gain of RM460.6 million recognised on the disposal of its pre-tertiary education business in 1Q2020 (Disposal Gain).
As at 30 September 2020, Paramount has 443 acres of undeveloped land in the Klang Valley, Kedah and Penang. In October 2020, it completed the purchase of 4.54 acres of land with buildings erected on it at Jalan Ampang Hilir, in the vicinity of the prestigious U-Thant enclave of Kuala Lumpur City Centre. The proposed development has a projected gross development value of RM863 million and is expected to commence in the third quarter of 2021 with expected completion to be over a period of five years.
Chew said although many business operations of the Group have gone back to pre-pandemic level during 3Q2020, the resurgence of COVID-19 infections remains a risk.
The earnings outlook of Paramount’s continuing operations for FY2020 is expected to be lower than that of FY2019, but Group’s overall performance would be bolstered by the RM460.6 million from the Disposal Gain, which is disclosed as part of discontinued operations.