Updates

Paramount May Hold Up to 30% Stake in Consortium Bidding for Digital Banking Licence

KUALA LUMPUR (Sept 6): Paramount Corp Bhd intends to hold up to a 30% stake in the consortium that is bidding for one of five digital banking licences which Bank Negara Malaysia (BNM) will be granting next year. 

Speaking at the virtual briefing, Paramount group chief executive officer (CEO) Jeffrey Chew noted that each member of the consortium would hold up to a 30% equity stake in the event that it manages to acquire a licence from the central bank.

Asked if Paramount would eventually increase its stake in the venture, he said that it would be difficult to go beyond a 30% stake given BNM’s rules under the Financial Services Act which does not allow one party to have more than 30% control.

To recap, other members in the consortium are Star Media Group Bhd, RCE Capital Bhd, Prosper Palm Oil Mill Sdn Bhd and a technology partner which has not been revealed to the public.

Chew explained that the technology partner in the consortium had requested to keep “a low profile”, assuring that the company has relevant experience in the digital banking segment.

He highlighted that each member of the consortium had their roles to play — Star Media’s capabilities as a media house for advertising and branding; RCE Capital’s financial stability and track record; and Prosper’s involvement in the agriculture and food sector where Chew said there are lots of gaps in the underserved and unserved segment.

Paramount, on the other hand, brings its fintech experience to the table by virtue of its 30% stake in peer-to-peer (P2P) lending platform Fundaztic, he added.

BNM will announce the list of winners of the five digital banking licences in the first quarter of next year (1Q22).

For the foreseeable future, Chew said property development will remain as the main core business of Paramount. 

He also noted that the group’s financial performance would be hampered in the subsequent quarter amid the Covid-19 pandemic and the ensuing lockdowns.

“We do see ourselves expanding regionally, doubling up every three to five years if the market is good for the property business. It may not be the most profitable business in Malaysia, but it is profitable if you do it right,” he said.

In terms of launches in the second half of 2021 (2H21), about 68% or RM646 million of its launches comprise high-rise projects, while the remainder would be made up of landed projects.

About 43% of these launches are new projects, while the rest are launches under existing projects. In total, the group expects to launch projects worth RM944 million in gross development value (GDV) in 2H21.

Paramount was half a sen or 0.6% higher at 79 sen at today’s noon market break, giving a market capitalisation of RM489.17 million.

Source

Paramount Corp Expects Better Sales in 2H21 as Lockdown Eases

Paramount chief executive officer Jeffrey Chew

KUALA LUMPUR: Property developer, Paramount Corporation Bhd, expects to achieve better sales performance in the second half of this year (2H2021) compared with 1H2021 as lockdowns to curb the COVID-19 pandemic eases and the vaccination rate rises.

Group chief executive officer Jeffrey Chew Sun Teong said the group has more ongoing property development projects in 2H2021, consisting of residential houses in Batu Kawan, Penang and the Kuala Lumpur city centre, as well as in Kemuning Utama and Bukit Banyan in Sungai Petani, Kedah.

However, he noted that the company’s performance in the third quarter of 2021 (Q3 2021) would be tempered by the Enhanced Movement Control Order (EMCO) that was imposed in Selangor in July, which resulted in work being halted at five of its project sites.

“As the lockdown is gradually easing, we hope to sustain a stronger sales momentum.

“By next year, when most Malaysians have been vaccinated, things will normalise and I think more people will start to consider buying properties, and sentiments will somewhat improve in 2022,” he said during the virtual briefing on the group’s 1H2021 results today.

Chew said the low interest-rate environment and the stamp duty exemption under the Home Ownership Campaign (HOC) would also remain crucial to incentivise property purchases.

The group’s property sales in 1H2021 grew 62 per cent to RM309 million from RM191 million in the same period last year, driven by steady demand from the sale of existing as well as new products from an existing project.

As of June 30, 2021, the group has close to RM250 million in cash and maintained sufficient banking facilities to fund its operations, as well as unbilled sales of RM1 billion, which is expected to provide some visibility to the group’s cash flow in the next two to three years.

Its undeveloped land stood at 223.02 hectares (ha), comprising 75.91ha in Klang Valley and 147.10ha in Kedah and Penang as of June 30, 2021.

Meanwhile, commenting on discounts given on completed properties, Chew said it is not likely that developers would give 30-50 per cent discounts to buyers amidst the slowdown in the property market.

He said Paramount would give normal discount rates and provide some additional finishings, but would not offer discounts of as much as 50 per cent.

“This is because properties would still have value over time and do not become obsolete so easily,” said Chew.

For Q2 2021 ended June 30, 2021, the group recorded a net profit of RM1.62 million compared to a net loss of RM4.01 million in Q2 2020.

Revenue grew by 98 per cent to RM127.4 million against RM64.2 million previously. – Bernama

Source

Paramount Buys Cyberjaya Land for RM102.7 million to Grow Sejati ‘series’, Leveraging on Strong Brand

PETALING JAYA, 1 September 2021: Paramount Corporation Berhad (Paramount) is acquiring 32.7 acres (13.3 ha) of freehold land with a lake view in Cyberjaya to grow its series of award-winning and highly popular Sejati branded homes.

Utropolis Sdn Bhd, a wholly owned subsidiary of Paramount, has entered into a sale and purchase agreement with Makmur Asiamaju Sdn Bhd to acquire a piece of freehold residential land for a cash consideration of RM102.7 million.

The new land is within a kilometre radius of Paramount’s Sejati Residences and Sejati Lakeside. It is a 35-minute drive from Kuala Lumpur city centre or 25 minutes from Kuala Lumpur International Airport (KLIA), and only 10 minutes from Putrajaya via major highways.

Sejati Residences, which is Paramount’s first high-end landed residential development in Cyberjaya has since sold out. This led to Paramount launching Sejati Lakeside in 2019. Sejati Lakeside is a 41.4-acre low density landed residential development set against a panoramic 45-acre lake.  The Sejati Lakeside development is ongoing and has recorded a 99% take-up rate for its first two phases comprising of 2-storey terrace and superlink homes.

Benjamin Teo, Deputy Group CEO

“Paramount has a solid reputation in Cyberjaya. We hope to replicate the success of these two developments and the timing couldn’t be better. We are building on the strong momentum of Sejati Lakeside as we target to launch its final phase comprising 3-storey lakefront semi-detached homes, in the fourth quarter of this year,” said Paramount Deputy Group CEO Benjamin Teo.

Teo added that the development of the new piece of land is expected to generate a Gross Development Value (GDV) of RM319.8 million over six years, which would strengthen the group’s current GDV of RM7.6 billion and contribute positively to future earnings.

The acquisition is in line with Paramount’s strategy of replenishing its land bank at locations with strong growth potential and to scale up its property development activities to generate long-term sustainable income. The landed residential development is also in line with Paramount’s strategy of balancing its property development profile with a mix of different types of products to cater to different market demands.

Source

Paramount Posts Profits for 2Q2021 Against Losses Last Year, Doubles Revenue

PETALING JAYA, 27 August 2021: Paramount Corporation Berhad (Paramount) recorded a profit before tax (PBT) of RM10.2 million for 2Q2021 and a profit attributable to ordinary equity holders of RM1.6 million on the back of the Group’s revenue doubling to RM127.4 million (2Q2020: RM64.2 million). This was a marked improvement from a loss before tax (LBT) of RM2.4 million and a loss attributable to ordinary equity holders of RM4.0 million that were recorded in the same period last year.

Paramount Group CEO Jeffrey Chew said, “The Group has delivered positive results while the market continues to be weighed down by COVID-19. The improved financial performance in 2Q2021 compared to the same period last year was mainly due to the low base last year and the less severe disruptions this year to the Group’s operations due to containment measures implemented to curb the spread of COVID-19.”

As for 6M2021 results, the Group’s revenue had risen by 50% year-on-year to RM279.2 million while the PBT rose 14 times year-on-year to RM21 million. However, the profit attributable to ordinary equity holders was lower by 99% to RM3.9 million without the non-recurring gain of RM460.6 million from the disposal of the Group’s controlling equity interest in the pre-tertiary education business that was recognised last year.

The Group’s property sales for 6M2021 grew by 62% to RM309 million (6M2020: RM191 million) on the back of steady demand from the sale of existing as well as new products from an existing project.

Property

The property division achieved a PBT of RM20.6 million in 2Q2021 against a LBT of RM4.5 million a year ago. This was on the back of RM125.2 million in revenue which was 101% higher than a year ago. The top three revenue contributors were Bukit Banyan in Kedah, ATWATER in Selangor and Utropolis Batu Kawan in Penang.

Utropolis Batu Kawan in the eco-city of Penang is one of Paramount’s main revenue contributors

The higher 2Q2021 revenue was mainly attributed to the higher level of construction progress recognised, coupled with higher sales achieved, given the low base last year due to the first movement control order (MCO 1.0). Although the Group’s construction sites were closed from 1 June 2021 in compliance with the full movement control order (FMCO), most resumed operations within the same month after relevant approvals were obtained and compliance requirements were met.

For 6M2021, the property division recorded a revenue of RM274.8 million (6M2020: RM182.0 million) and a PBT of RM35.7 million (6M2020: RM1.2 million). The improved performance was due to less severe disruptions to the Group’s operations as compared to last year.

Coworking

For 2Q2021, the Co-labs Coworking division recorded a revenue of RM1.2 million, which was 55% higher than the same period last year of RM0.8 million. In addition to the contribution from the new outlet at Tropicana Gardens, Kota Damansara which opened in January 2021, all four other coworking outlets also registered higher revenue. However, the division’s LBT in 2Q2021 was RM1.2 million, 20% higher than RM1.0 million recorded in the same period last year mainly due to the additional costs of the new outlet.

For the first half of 2021, the Co-labs Coworking division achieved a revenue of RM2.6 million, which was 42% higher than the same period last year of RM1.9 million. Despite the higher revenue, the coworking division incurred a LBT at RM2.4 million (6M2020: RM2.4 million) mainly due to the new outlet.

Prospects

“The property market will be weighed down by continued economic uncertainties caused by the prolonged pandemic situation which could result in cautious household spending, reduced business expenditure and weakened employment market,” said Chew.

“However, as lockdown restrictions ease, we hope to sustain the strong sales momentum with speedier sales conversion and project approvals. The low interest rate environment and the stamp duty exemption under the home ownership campaign remain crucial to incentivise property purchases,” said Chew.

“The new projects lined up for the second half of this year are The Atrium, a high-rise residential development at the prestigious U-Thant enclave of Kuala Lumpur and Arinna Kemuning Utama, a low-density smart home project located in Shah Alam,” said Chew.

He added that measures are also underway for the Group to meet the relevant standard operating procedures such as vaccination of workers to allow construction activities to be carried out at a higher workforce capacity.

Overall, the Group expects the business environment to remain challenging for the rest of 2021 and as such, the Board has exercised prudence not to declare any dividend for this quarter.

Source

Paramount Appoints a New Chairman and a Deputy Group CEO

PETALING JAYA, 27 August 2021: Paramount Corporation Berhad (Paramount) announced its appointment of Quah Chek Tin as an Independent Non-Executive Director today and as Chairman of the Board with effect from 1 September 2021. Quah’s appointment will fill the void left by Paramount’s late Chairman and Executive Director, Dato’ Teo Chiang Quan who passed away unexpectedly on 24 May 2021.

Quah is no stranger to the company having been with the Board of Paramount from 6 February 2007 to 29 May 2019. During this time, he had served on all four board committees including as chairman of the Audit Committee for three years and as chairman of the Remuneration Committee for two years. This has provided Quah with a thorough understanding of the workings and governance of the board, the board committees as well as the business operations of Paramount Group which lends credence to his suitability for the position as Chairman of the company.

Paramount also announced its appointment of Benjamin Teo Jong Hian, an Executive Director, as Deputy Group Chief Executive Officer with effect from 1 September 2021. Teo began his career in Paramount as a management trainee in 2012 and has since risen up the ranks within the company holding various senior management roles including as Paramount Property Development Sdn Bhd CEO since 2018 and leading the entire property team since 1 March 2021. Teo also spearheaded the coworking business.

“Benjamin’s appointment as a Deputy Group CEO is in line with Paramount’s management succession and risk mitigation plans to ensure the long-term sustainability of the Group,” said Paramount Corporation Berhad Group CEO, Jeffrey Chew.

Source