Paramount 3Q net profit drops 81% to RM15.62m

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KUALA LUMPUR (Nov 21): Paramount Corp Bhd reported an 81% drop in its net profit to RM15.62 million for the third quarter ended Sept 30, 2018 (3QFY18), from RM82.82 million a year earlier, amid the absence of a gain on disposal which was recorded in the previous year.

In 3QFY17, the property developer saw a gain following the disposal of Sri KDU campus to Alpha REIT.

Revenue for the quarter rose 12% to RM210.53 million, compared with RM187.84 million in the preceding year.

Segmentally, its property division’s pre-tax profit increased 88% to RM28.1 million from RM14.9 million a year earlier, contributed by Utropolis Glenmarie’s serviced apartments in Shah Alam and Utropolis Batu Kawan’s residential and commercial developments.

Meanwhile, the education division saw its revenue decline 7% year-on-year to RM66 million, while pre-tax profit fell to RM6.5 million from RM12.6 million.

“This was largely due to the rental expense incurred by Sri KDU under the sale and leaseback agreement with Alpha REIT, coupled with the lower contribution from the R.E.A.L Education Group,” Paramount said.

For the nine months ended Sept 30 (9MFY18), net profit declined 41% to RM64.88 million from RM109.56 million a year earlier, while revenue increased 24% to RM651.14 million from RM524.35 million.

The group said it had achieved sales of RM787 million for the cumulative period, and targets to achieve a total of RM1 billion in sales for the year, backed by RM1.2 billion worth of new property launches.

“In addition, the group has achieved a new milestone, its unbilled sales stood at RM920 million as at Sept 30, 2018, on the back of its seven ongoing projects. This is expected to contribute positively to the group’s financial performance in the near future,” the developer said.

For the education division, the group said R.E.A.L is targeting the affluent segment, while Sri KDU offers premium private and international schools.

It acknowledges target customers for the R.E.A.L private and international schools are price sensitive and therefore, the group is analysing student attrition, while internal processes are streamlined to deliver quality education at reasonable cost.

Paramount has also opened three new pre-school centres in Klang Valley, as it sees untapped growth potential in the pre-school and enrichment centre segments.

For the tertiary education business, the group has restructured its international marketing strategy and intensified its social media and digital marketing to promote its flagship schools.

“Barring any unforeseen circumstances, the group is confident of delivering a better operating performance for the current financial year ending Dec 31, 2018 [FY18],” it said.

Paramount was last traded at RM2.11, with 37,300 shares done.