Paramount’s net profit up by 94%
PETALING JAYA: Paramount Corp Bhd posted a 94% year-on-year (y-o-y) increase in net profit in the third quarter ended Sept 30, mainly due to the Rm23.3mil gain made on the disposal of its controlling stake in three KDU tertiary education institutions.
The property and education player told the stock exchange yesterday that its bottom line in the three-month period rose to Rm30.3mil, up from Rm15.62mil in the third quarter of the previous financial year.
Paramount had completed the disposal of its controlling stake in KDU University College Sdn Bhd, KDU University College (PG) Sdn Bhd and KDU College (PJ) Sdn Bhd on Sept 3, making a total gain of Rm23.3mil. The campuses were sold to Australian University of Wollongongowned company, UOWM Sdn Bhd.
Paramount’s revenue for the third quarter increased by 3% y-o-y to Rm217.1mil, led by improved contribution from its property division.
The segment’s revenue increased by 8% to Rm156.1mil, led by the Greenwoods, Salak Tinggi development, Utropolis Glenmarie, Shah Alam development, and Berkeley Uptown, Klang development. However, it was partly mitigated by the lower percentage of work done in Atwater, Petaling Jaya development.
Meanwhile, the education division recorded a 9% lower revenue at Rm60.1mil in the third quarter. This was mainly due to the disposal of the three KDU institutions that resulted in the financial performance of these companies to be equity accounted as associated companies.
Paramount’s earnings per share for the quarter under review were 4.99 sen. The group did not declare a dividend for the three-month period.
Cumulatively, for the first nine months of financial year 2019 (9M19), Paramount’s net profit was flattish at Rm64.93mil as compared with Rm64.88mil last year.
Revenue was however up by 6.88% y-o-y to Rm695.97mil.
“Revenue of the property division had increased by 11% to Rm493.5mil. Revenue of the education division was Rm200.1mil as compared to Rm205.3mil in 9M18,” the group said.
About 71% of Paramount’s revenue in the nine-month period was contributed by the property business, while the remaining from the education division.
Commenting on its property segment prospects, Paramount said that its total unbilled sales of Rm957mil as at Sept 30 is expected to contribute positively to the group’s financial performance in the near future, although it foresees a soft property market.
“In the fourth quarter of 2019 (4Q19), Paramount Property will be launching a new landed development that is located in close proximity to its existing project, Sejati Residences in Cyberjaya to replicate the success of Sejati Residences.
“As for the northern region, Paramount Property will also be launching the third phase of its serviced apartments in Utropolis Batu Kawan on the back of strong sales achieved thus far,” it said.
On its coworking space front, Paramount said that another 15,500 square feet would be opened in 4Q2019, following the encouraging uptake from The Starling Mall coworking space.
Meanwhile, commenting on its education business, the group said the proposed disposal of its controlling stake in Paramount Education Sdn Bhd, Paramount Education (Klang) Sdn Bhd and Sri KDU Sdn Bhd will enable Paramount to monetise and unlock the value of part of its investments in the pre-tertiary business at an attractive valuation.
“The proposed disposal is expected to be completed in 4Q19 wherein the group will continue to hold an effective 20% equity interest in the target companies post completion to participate in the future growth of the pre-tertiary education group,” it said.