Paramount Corp’s higher 2015 earnings driven by property segment

KUALA LUMPUR: Paramount Corp Bhd saw its full-year 2015 earnings grow by 8% to RM67.68mil compared with RM62.47mil in the previous year, driven mainly by the property division.

Revenue for the period was 13% higher at RM576.03mil against RM510.04mil in 2014 on the back of higher contributions from the property and education divisions, the company said in its filing with Bursa Malaysia. 

The property division posted higher revenue to RM427.1mil due to higher sales and progressive billings registered on the Sejati Residences in Cyberjaya, Utropolis in Glenmarie, Shah Alam, Sekitar26 Business in Shah Alam and Bukit Banyan in Sungai Petani developments, offsetting the lower revenue from the construction sector as a result of the cessation of external projects.

As a result of the higher revenue and despite the lower pre-tax profit from the construction sector, pre-tax profit for the division increased by 23% to RM83.9mil.

Revenue for the education division grew to RM147.9mil with higher new student enrolments from the primary, secondary and tertiary schools.

While the primary and secondary schools recorded a higher pre-tax profit in 2015, KDU University College incurred higher losses due to the onset of depreciation charges and interest costs on its new campus in Utropolis, Glenmarie this year. Overall, pre-tax profit for the division decreased by 12% to RM21.6mil.

Moving forward, Paramount expects demand for property to remain primarily in the affordably priced segment and in the property hotspots of Klang Valley and Penang, with interest focused on developments with innovative lifestyle concepts. 

It will be rolling out another two developments in Section 13, Petaling Jaya, and a university metropolis development in Batu Kawan, Penang.

On the education front, competition in the tertiary business will heat up with the opening of Xiamen University in 2016 and the coming on-stream of new campuses by existing players, many with large student capacity. 

As a result of the muted economic environment, the market is showing a preference for medium to lower priced institutions, it said.