Paramount’s 3Q profit jumps over 7 times on disposal gain; 9M sales at record high

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KUALA LUMPUR: Paramount Corp Bhd’s net profit grew over seven times in its third quarter ended Sept 30, 2017 (3QFY17) to RM85.76 million from RM11.16 million last year, thanks mainly to the disposal of its Sri KDU campus, which generated a gain of RM77.8 million.

Quarterly earnings per share (EPS) bumped up to 20.21 sen, from 2.64 sen earlier. Revenue was up 42% to RM191.1 million from RM134.78 million in the same quarter last year with higher contribution from both its property and education divisions, its Bursa Malaysia filing showed.

Its property division revenue grew 26% to RM123.1 million on strong sales and higher level of work progress at three key developments. “In line with this, profit before tax (PBT) for the division also improved by 11% to RM18.7 million,” it added.

Meanwhile, education revision revenue rose 82.3% to RM68 million, mainly attributable to REAL Education Group’s revenue contribution of RM29.6 million, and higher revenue from Sri KDU.

“Excluding the non-recurring gain, PBT for the division was RM12.6 million, an increase of 168% growth compared to 3Q2016,” said Paramount.

For its first nine months of FY17 (9MFY17), Paramount’s net profit jumped 143% to RM108.72 million from RM44.76 million last year, while revenue climbed 32% to RM518.59 million from RM393.41 million.

“The substantial revenue growth was contributed by the record property sales of RM633 million for nine months in comparison to RM403 million for full-year FY16, and by the new stream of income from REAL Education that the group acquired earlier this year,” said Paramount group chief executive officer Jeffrey Chew in a separate statement.

Excluding the non-recurring gain, its education division enjoyed a 63% PBT growth mainly due to REAL Education’s PBT contribution of RM9.7 million, and lower losses from KDU University College, the group said.

Meanwhile, its property division PBT dipped 7% in the period due to higher losses recorded by retail mall Utropolis Marketplace and lower contribution from the construction businesses.

“On a more positive note, the Utropolis Batu Kawan, Sejati Residences and Greenwoods Salak Perdana developments contributed higher PBT for 9MFY17,” it said.

On prospects, Chew remained optimistic on the Malaysian property market. “The encouraging response from the market is positive and demand for mid-priced and affordable homes has increased,” he said.

On the education front, he said business remained competitive and increasingly price-sensitive, with tertiary education providers actively offering promotions and discounts.

The K-12 education units will be the main focus, with REAL Education and Sri KDU supporting its performance, said Chew.

Shares of Paramount Corp closed 2 sen or 1.14% lower at RM1.73, giving the group a market capitalisation of RM734.03 million.