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Paramount Corporation Berhad (Paramount) has pledged RM500,000 to The Edge COVID-19 Health Care Workers Support Fund in aid of our health care workers who are serving tirelessly in hospitals day and night. Paramount Chairman Dato’ Teo and his family are donating another RM250,000.
Dato’ Teo said, “My colleagues, family members and I have a huge respect for the health care workers in this country especially over the COVID-19 epidemic.”
“Through our pledges, I pray that our healthcare heroes will come to know that they are loved and appreciated by all Malaysians. We thank The Edge for this initiative to encourage corporate Malaysia and the public to contribute financially and show their love and support,” he added.
KUALA LUMPUR (March 3): Paramount Corporation Bhd is mulling to establish footprint in the property management and property technology (proptech) segment with the proceeds from the divestment of its education operations.
The sale of its controlling equity interest in its pre-tertiary education business to Prestigion Education Sdn Bhd is expected to yield net cash of some RM250 million for Paramount after deducting dividend to be paid to its shareholders and related expenses, the company’s CEO Jeffrey Chew told reporters and analysts at a media briefing today.
“The divestment of the education business will give us cash for growth going forward and we are now looking at a few potential growth areas, of which is property management and proptech to cater to the growing number of strata property in the country,” he said.
He noted that the new property management business can complement its existing property development segment by providing a pool of potential customers for new projects in the future.
“If we are managing 100,000 units of properties, we can send out the information of our new projects to the owners using proptech.
“On top of that, we are able to control the quality of the property we built while building and maintaining our brand,” he added.
Apart from property management and proptech, Paramount is also exploring the idea of setting up or acquiring a construction company to undertake the jobs internally while bid for external contracts.
“We are also exploring the plan of investing or setting up a REIT (Real Estate Investment Trust) for our education or commercial properties,” he said.
Looking ahead, Chew expects the profit-before-tax margin for Paramount’s property development segment to be under pressure as the cost of business remains high.
In 2019, the margin stood at 18%, a slight increase from 17% in 2018, but lower than 21% in 2016.
“The margin could still drop by one or less than one percentage point every year and eventually hovering at 12% or 13% in the next few years.
“There is not much room for cost reduction. Unless land and interests cost decline, the margin will be going down,” he elaborated.
KUALA LUMPUR (March 3): Paramount Corporation Bhd is planning to launch some RM1.2 billion worth of property projects in 2020 while maintaining its sales target at RM1 billion.
Speaking at a media briefing today, Paramount Corporation CEO Jeffrey Chew said that this year’s sales is expected to be driven by demand from the formation of new households and owners who are looking to upgrade their home.
He added that from 2011 to 2020, the growth rate of households is estimated at 2.9% per annum, which creates fresh demand for housing every year.
“The number of households in the country is still growing and we see people are starting to buy [property] now after holding back their purchase in the last three years,” he said.
Paramount’s new launches this year mainly comprises residential products, including landed homes in Bukit Banyan in Sungai Petani, Sejati Lakeside in Cyberjaya and Greenwoods in Salak Tinggi with gross development value (GDV) of RM121 million, RM178 million and RM139 million, respectively.
Chew noted that pricing of the new launches this year will fall in the range of RM450 to RM500 psf, or RM300,000 to RM600,000 per unit.
These segments are expected to enjoy higher demand as compared to those priced at RM700,000 or RM800,000 and above per unit in the current market, he added.
In the financial year ended December 31, 2019 (FY2019), the developer achieved 73% take-up rate for the RM858 million worth of projects launched during the year, which includes units in Berkeley Uptown in Klang, Kemuning Idaman in Selangor and Sejati Lakeside in Cyberjaya.
Property sales in FY2019, on the other hand stood at RM692 million, falling short of its RM1 billion target for the year mainly due to the lacklustre demand for commercial property and the postponement of launch of a couple projects, said Chew.
Paramount has 157 units of unsold properties worth approximately RM105 million as at end-2019, of which 136 units or RM91 million is commercial units such as shopoffices.
The value of the unsold stocks has increased by about RM80 million from some RM20 million in 2018, he added.
“The market for commercial property has been very tough due to the emergence of e-commerce and other factors which are changing the business landscape,” he explained.
This has affected the sale of commercial property by the company, particularly gwo blocks of office towers in Atwater development which earmarked for en-bloc sale but remained unsold to date.
Nevertheless, Paramount is looking at a good growth path over the next five years and hope to achieve RM1.4 to RM1.5 billion of sales by 2024 with a 10% growth every year.
“We will still keep on building as we’re in a good position where we have healthy cash flow to use for operation and land acquisition,” he said, adding that the total unbilled sales stood at RM913 million in 2019, which is equivalent to 1.3 times of last year’s revenue.
KUALA LUMPUR (March 3): Paramount Corporation Bhd is looking at expanding its property development business segment in overseas cities where population is high but less urbanised, such as Bangkok in Thailand, Manila in The Philippines and Ho Chi Minh city in Vietnam.
Citing Thailand as an example, Paramount Corporation CEO Jeffrey Chew said that the urbanisation rate in the country is estimated at 55% with a population of about 70 million, as compared Malaysia’s 80% and some 32 million, respectively.
“Urbanisation has a very strong impact on property business, thats why we choose these countries.
“We also don’t want to go to countries such as the UK where we would be a late kid in the block, so we want to be in places we can be an early player,” he told reporters and analysts at a media briefing today.
The company has launched its first project in Thailand last month after acquiring 49% stake in a Bangkok-based property development company for THB 60.27 million (approximately RM8.44 million).
Dubbed Na Reva, the project consists of some 200 units of condominiums in a 29-storey tower in the Charoen Nakorn area in Bangkok. About 10% of the units have been taken up to date, according to Chew.
Looking ahead, Paramount Corporation is aiming to increase the revenue contribution from the overseas segment to 10% by 2024, he added.
Also present were Paramount Property CEO Beh Chun Chong, Paramount Corporation chief financial officer Foong Poh Seng, executive director Benjamin Teo and Paramount Education CEO Datin Teh Geok Lian.
PARAMOUNT Corp Bhd’s net profit rose to RM104.05 million in the financial year ended Dec 31, 2019 (FY19), from RM91.81 million previously.
In an exchange filing yesterday, the education cum property company said the higher earnings were mainly due to the gain of RM25.4 million recognised for the disposal of its stakes in UOW Malaysia KDU University College Sdn Bhd, UOW Malaysia KDU Penang University College Sdn Bhd and UOW Malaysia KDU College Sdn Bhd to UOWM Sdn Bhd on Sept 3, 2019 (KDU disposal).
Revenue also improved to RM705.97 million from RM632.49 million previously.
On the property division, the company said revenue increased to RM700.3 million from RM631.2 million in FY18.
“The higher revenue was contributed mainly by Utropolis Glenmarie, Shah Alam development; Utropolis Batu Kawan, Penang development; and Greenwoods, Salak Tinggi development,” it said.
While for its education division, Paramount Corp said revenue, however, was lower at RM249.9 million from RM275.2 million in FY18, mainly due to the completion of KDU disposal.
For 2020, the group foresees the property sector to remain soft.
“Nevertheless, the lower lending rate following the reduction in the Overnight Policy Rate by Bank Negara Malaysia in January 2020 and the 2020 economic stimulus package are expected to improve consumer sentiment for the purchase of properties,” it said.
On prospects for the education segment, the company said it would ramp up land-banking activities focusing on parcels of land suitable for landed or integrated development in the next five years.
“And where there is synergy and greater efficiency, the group will participate in joint ventures with landowners.
“In addition, the group will explore new business opportunities in property-related businesses to future proof its business and for sustainability of its earnings in the long run,” it added.
Paramount also declared a special interim dividend of 29 sen per share payable on April 23, 2020.