KUALA LUMPUR (Aug 18): Property developer and private education operator Paramount Corp Bhd, which announced a 70% increase in its latest quarterly earnings, is planning up to RM405 million new projects and additional phases of existing developments in the second half of the financial year ending Dec 31, 2016 (2HFY16).
Paramount is also finalising plans for the roll-out of its new development on its 8.09ha tract in Batu Kawan, Penang, which carries a gross development value (GDV) of RM1.3 billion over a 10-year period.
Paramount said its projects in the pipeline, together with future projects, have a GDV of RM8.3 billion and are expected to see it through till 2026.
In a bourse filing announcing the results for its second quarter ended June 31, 2016 (2QFY16) yesterday, Paramount said prospects for the property division are improving, particularly in commercial properties, as investors look for long-term strategic investments.
Meanwhile, its unbilled sales as at June 30, 2016, stood at RM355 million, with 1HFY16 sales of 156 units for RM129 million, and progressive billings from ongoing developments.
Its planned commercial developments, including Sekitar26 Enterprise commercial shoplots in Shah Alam with a GDV of RM117 million, Greenwoods Salak Perdana shophouses in Sepang (GDV: RM30 million) and Utropolis Batu Kawan shoplots (GDV: RM105 million), are expected to see favourable demand, Paramount said.
Residential projects include Sejati Residences semi-detached units in Cyberjaya (GDV: RM31 million), and bungalows, semi-detached units, double-storey link homes and shoplots in Bukit Banyan, Sungai Petani, Kedah (GDV: RM122 million).
The development in Batu Kawan would mirror its Utropolis Glenmarie project in Shah Alam, which is anchored on the concept of a university metropolis, it said.
“Utropolis Batu Kawan is primed to meet demand for what is planned to be Penang’s third satellite city as properties on the island become more expensive,” it said.
The group’s 2QFY16 net profit came in at RM23.9 million, from RM14.06 million a year earlier, as revenue grew 26% to RM145.3 million from RM115.26 million, on higher contribution from the property division.
An interim single-tier dividend of 2.5 sen was declared for the period, to be paid on Sept 28.
Paramount said its property division’s revenue rose 39% to RM107.6 million, from RM77.7 million in 2QFY15, on higher progressive billings from all its developments, and higher sales recorded from the Sejati Residences in Cyberjaya, Sekitar26 Business in Shah Alam, and Greenwoods Salak Perdana development in Sepang.
As a result, profit before tax (PBT) for the division rose 43% to RM24.6 million.
Meanwhile, revenue from its education division was maintained at RM37.4 million from 2QFY15, though PBT was RM13 million, 112% higher from RM6.1 million in 2QFY15, due to a gain of RM6.4 million recorded on the sale of student apartments.
However, Paramount’s cumulative six-month (1HFY16) net profit fell 10% to RM33.6 million from RM37.2 million, while revenue slipped 8% to RM258.6 million from RM280.3 million, on lower contribution from its property division.
Paramount chief executive officer Jeffrey Chew attributed the improved quarterly results to the property segment’s improvement and higher student enrolment at the group’s KDU University College.
While the property segment should see further improvement, Chew said the education division would continue to face challenges, due to intense competition in the tertiary segment, where many private higher education providers are offering significant reductions in tuition fees by way of discounts and promotions.