Paramount’s disposal gain to bolster overall financial performance

by HARIZAH KAMEL / pic by BERNAMA

PARAMOUNT Corp Bhd’s earnings will be bolstered by the RM460.6 million disposal of its pre-tertiary education business in the first quarter of 2020 (1Q20), while the outlook from its continuing operations for financial year 2020 (FY20) is expected to be lower than FY19.

In a statement recently, group CEO Jeffrey Chew (picture) said although many business operations of the group have gone back to pre-pandemic level in 3Q, the resurgence of Covid-19 infections remains a risk.

As of Sept 30, Paramount has 443 acres (179.3ha) of undeveloped land parcel in the Klang Valley, Kedah and Penang, and the property developer also completed a purchase of 4.54 acres of land plot with property in Jalan Ampang Hilir, in the vicinity of the U-Thant enclave in Kuala Lumpur last month.

The proposed development there has a projected gross development value of RM863 million and is expected to commence in 3Q21 with expected completion in five years.

Paramount’s earnings for 3Q20 fell 35% to RM19.8 million from RM30.3 million a year ago for the same period as the financial results of its pre-tertiary and tertiary education businesses were no longer consolidated upon divestment of its controlling stakes in February and September last year respectively.

Paramount’s revenue from continuing operations was 39% year-on-year (YoY) higher for the period at RM218.9 million as property sales rose 82% YoY to RM312 million.

Pre-tax from continuing operations was 395% YoY higher at RM36.6 million due to higher profit contribution from the property division.

“Our sales in 3Q were 82% higher than that of the corresponding period last year, mainly from project launches this year, which are Sinaran at Utropolis Batu Kawan in Penang; and Cendana at Greenwoods Salak Perdana and Phase 2 of Sejati Lakeside in Selangor.

“Despite the Movement Control Order disruptions, our first nine-month period of 2020 sales had grown by 5% to RM503 million, thanks to our strong 3Q sales,” said Chew.

He added that for the final quarter of this year, Paramount is working hard to capitalise on its strong sales momentum and will intensify promotional activities to boost sales, including launching virtual sales consultation for Sejati Lakeside and Berkeley Uptown projects.

Chew said the low interest-rate environment and the government-initiated Home Ownership Campaign since June are expected to spur interest in the property market.