Paramount Corp plans RM700m property launches in 2HFY2023, aiming for stronger earnings supported by unbilled sales of RM1.5 billion for the year
KUALA LUMPUR, 06 Sep 2023 – Paramount Corp Bhd is gearing up for a promising second half ending on Dec 31, 2023 (2HFY2023) as it anticipates stronger earnings, fueled by new property launches and ongoing efforts to enhance its return on assets.
The group, which achieved property sales of RM617 million in 1HFY2023, has strategically planned property launches with a total gross development value of RM700 million for 2HFY2023. This decision is driven by the introduction of appealing product offerings and a recovering demand for home purchases.
During a briefing on the group’s 1HFY2023 financial results, Paramount’s group chief executive officer, Jeffrey Chew Sun Teong, highlighted the significance of their unbilled sales, which amount to RM1.5 billion for the remainder of the year. A substantial 76% of these unbilled sales are attributed to the Klang Valley, while the remaining 24% originate from Kedah and Penang.
Among the forthcoming projects, The Ashwood stands out—a high-rise residential property in Kuala Lumpur encompassing 312 condominium units and duplexes, along with 12 units of low-rise villas, all situated on 3.59 acres (1.45 hectares) of freehold land.
Additional projects situated in the central region of Peninsular Malaysia encompass the Greenwoods Amaria in Salak Perdana. In the northern region of Sungai Petani, Paramount is gearing up to introduce the Bukit Banyan landed residential project, along with affordable landed homes.
Chew further noted that for 1HFY2023, the group maintained a low unsold inventory level of RM56 million, representing a 3% decrease compared to the previous quarter.
In 1HFY2023, Paramount’s net profit soared by over 2.5 times to RM35.69 million, as opposed to RM14.13 million during the same period the previous year. This impressive growth was primarily driven by improvements in the core property development business.
Revenue for the period reached RM436.11 million, compared to RM370.48 million in 1HFY2022, with substantial contributions from property projects in Penang, Kedah, and Selangor.
Paramount’s co-working division reported a 44% year-on-year increase in revenue, amounting to RM6.2 million for 1HFY2023, primarily attributed to higher revenue from all Co-labs Coworking spaces and Scalable Malaysia.
Despite these positive developments, Chew acknowledged a muted outlook for the property sector, largely due to an inflationary environment and higher interest rates dampening buyer sentiment. Additionally, he noted that buyer expectations for affordable housing products had not been met by suitable property launches from developers, further affecting the industry’s prospects.
Referring to a report from the National Property Information Centre, Chew mentioned that although overhang and unsold under-construction units in prime locations had improved in numbers, there remains a need for appropriately priced products.
He concluded by emphasizing that Paramount remains cautious, citing concerns over rising labor costs and raw material prices as challenges for property developers when planning future launches. Paramount shares closed 1.5 sen or 1.57% higher at 97 sen on Wednesday, with a total valuation of RM604.04 million.