KUALA LUMPUR: Paramount Corp Bhd’s first quarter (1Q) net profit dropped 11.46% to RM6.17 million, from RM6.96 million a year earlier.
The group said in a filing to Bursa Malaysia yesterday that while its property division reported a higher profit, the education segment saw a decrease in earnings.
Quarterly revenue rose 18% to RM191.44 million, from RM162.25 million previously, thanks to higher contribution from the property division.
The property division saw its revenue increased 34% to RM122.1 million, from RM91.3 million previously. The segment’s profit before tax increased 68% to RM14.6 million, from RM8.7 million a year ago.
The group said the higher earnings were due to the completion of the Utropolis Glenmarie development, as well as contributions from the new phases launched, namely Greenwoods, Salak Tinggi and Utropolis Batu Kawan, Penang.
Meanwhile, Paramount’s education segment recorded a lower revenue of RM69.3 million, compared with RM70.8 million a year earlier. The segment’s profit before tax for the quarter stood at RM9.6 million, down from RM12.7 million in the corresponding quarter last year.
This was due to lower contributions from Sri KDU Sdn Bhd, REAL Education Group and KDU University (PG) Sdn Bhd. However, these lower contributions were cushioned by KDU University College Sdn Bhd’s improved performances arising from higher student enrolment.
In a separate statement, Paramount Group chief executive officer Jeffrey Chew said that while the property market is expected to remain soft, Bank Negara Malaysia’s 25-basis-point cut in its overnight policy rate would result in lower loan instalments, boding well for property consumption.
“We look forward to launch seven developments including new phases of existing projects this year, while adopting a more cautious approach in response to market conditions,” he said.
Construction has commenced for the new 1,500-student capacity Sri KDU International School at Berkeley Uptown Klang. When completed, the school is expected to increase Sri KDU’s total capacity by about 50%. The first intake in Berkeley Uptown will be in January 2021” said Chew.
He noted that the education space remains challenging and that price pressure present in the segment would continue.
Paramount’s share price closed 0.48% or a sen lower at RM2.08 yesterday, with a market capitalisation of RM905.69 million.