Petaling Jaya, 23 November 2016 : Paramount Corporation Berhad (Paramount) today announced its 9M2016 results for the financial year ending 31 December 2016, posting a group revenue of RM393.4 million and a Profit Before Tax (PBT) of RM74.7 million. Compared with the corresponding period last year, group revenue decreased by 8% (9M2015: RM428 million) while PBT decreased by 5% (9M2015: RM79 million), with the higher contribution from the Group’s education division offsetting the lower contribution from the Group’s property division.
Announcing the Group’s 9M2016 results, Paramount’s Group Chief Executive Officer, Jeffrey Chew said, “The Group saw an improvement in the key indicators of property sales and student population, with the number of units of property sold and sales value improving over the previous quarter. On the education front, business remained competitive but total student population as at the end of 3Q2016 grew, albeit marginally, attributable to the higher student population of KDU University College in Glenmarie, Shah Alam. These are all good indicators that our performance remains on track for the rest of 2016.”
Revenue for the Group’s property division, Paramount Property, was RM278.8 million, a decrease from RM317.5 million while PBT was RM55.7 million (9M2015: RM64.9 million).
Paramount Education’s revenue, on the other hand, grew by 3% to RM113.3 million (9M2015: RM109.8 million). The higher revenue and the gains realised on the sale of student accommodation apartments in Petaling Jaya increased PBT by a significant 57% to RM27.9 million (9M2015: RM17.8 million).
For the 3Q2016 period, the Group registered a revenue of RM134.8 million and a PBT of RM21.7 million (3Q2015: RM147.7 million and RM23.2 million).
Revenue for Paramount Property for 3Q2016 was RM96.7 million (3Q2015: RM111.4 million) attributable to lower progressive billings from Sekitar26 Business and Utropolis Glenmarie, both located in Shah Alam in the Klang Valley. However, PBT increased marginally by 2% to RM19 million from RM18.7 million due to finalisation of accounts for some development projects.
Revenue for Paramount Education was marginally higher at RM37.3 million (3Q2015: RM36.3 million) attributable to higher revenue recorded by KDU University College, Glenmarie and KDU College Petaling Jaya. PBT decreased to RM4.6 million (3Q2015: RM5.5 million) due to lower contribution from KDU Penang University College resulting from higher operating costs from its conversion to university college status in October last year.
On prospects, Mr Chew remained cautiously optimistic on the Malaysian property market.
“There are some positive signs,” he said. “Demand for homes in good locations remains steady, while demand for mid-priced and affordable homes has increased. Commercial and industrial properties are also seeing an increase in demand as astute investors seek long-term income-generating assets.”
Given this, he said that Paramount Property’s prospects are expected to hold steady on the back of good sales momentum from 2Q2016 continuing into 3Q2016. The recent launch of 196 units of retail lots in Utropolis Batu Kawan, Penang with a Gross Development Value (GDV) of RM162 million saw a take-up rate of 95 units with a GDV of RM80 million.
On the education front, he elaborated that business remained very competitive and increasingly price-sensitive, with tertiary education providers actively offering promotions and discounts. Sri KDU’s excellent reputation, its strong value proposition and its consistent enrolment, which remained on track with budget, would drive the performance of the Paramount Education division, he said.