Paramount’s Q2 2025 Results: Navigating a Tough Market with Strategic Diversification
Paramount Corporation Berhad, a prominent name in Malaysia’s property development sector, has just released its financial results for the second quarter ending June 30, 2025. The report reveals a story of resilience in a challenging economic landscape, marked by stable revenue but a dip in profitability compared to a strong previous year. However, the real headline might be the company’s strategic moves to diversify its earnings base. To top it off, the board has declared a 3.0 sen interim dividend, rewarding shareholders for their continued support.
Let’s break down the key numbers and what they mean for the company’s path forward.
A Closer Look at the Numbers: Q2 2025 Financials
At a glance, the second quarter showed a mixed performance when compared to the same period last year. While revenue held steady, profits saw a decline. The company attributes this primarily to the absence of savings from finalised project costings that had provided a significant boost to profits in Q2 2024.
Quarterly Financial Highlights (Q2 2025 vs Q2 2024)
Q2 2025 (Current Quarter)
Revenue: RM232.5 million
Profit Before Tax (PBT): RM30.1 million
Net Profit: RM21.8 million
Earnings Per Share (EPS): 3.50 sen
Q2 2024 (Comparative Quarter)
Revenue: RM232.9 million
Profit Before Tax (PBT): RM36.6 million
Net Profit: RM25.9 million
Earnings Per Share (EPS): 3.89 sen
Despite the quarterly dip, the picture for the first half of 2025 (6M2025) is more encouraging. Revenue grew by 11% to RM450.4 million, and profit attributable to shareholders saw a healthy 13% increase to RM36.2 million. This was mainly due to lower distributions to perpetual securities holders following a partial redemption in 2024.
Segment Performance: A Mixed Bag
Delving into Paramount’s core business segments reveals varying performances, painting a clearer picture of the company’s operational landscape.
Property Division: Holding Ground
The property segment remains the Group’s primary revenue driver, contributing RM218.2 million in Q2 2025. This was a marginal 1% decrease from the previous year. Key projects driving this performance include The Atera in Selangor, Utropolis Batu Kawan in Penang, and Bukit Banyan in Kedah. However, the division’s Profit Before Tax (PBT) was 17% lower at RM33.9 million, reflecting the high base effect from last year’s cost savings.
Coworking Segment: Strong Growth Momentum
The coworking division, under the Co-labs brand, continues its impressive growth trajectory. Revenue surged by 36% year-on-year to RM7.4 million, largely driven by design-and-build projects from Scalable Malaysia. Although the segment’s PBT was slightly lower at RM0.1 million due to initial costs from its newly opened NU Sentral space, the strong top-line growth signals expanding market traction.
Investment & Others: Signs of Improvement
This segment, which includes the fine-dining restaurant Dewakan and the Mercure Kuala Lumpur Glenmarie hotel, saw revenue climb 11% to RM8.0 million. More importantly, its Loss Before Tax (LBT) narrowed to RM3.9 million from RM4.7 million a year ago, indicating improved operational efficiency and a positive turn.
Navigating Headwinds: Risks and Future Outlook
Paramount is operating in a complex economic environment. The Malaysian property market faces pressures from geopolitical tensions, new tariffs, and domestic policy changes like the expanded SST and upcoming fuel subsidy reforms. These factors could potentially dampen buyer sentiment.
In response, the management has taken a pragmatic approach by revising its 2025 sales target to RM1.2 billion (from RM1.5 billion) and scaling back its launch pipeline to RM1.0 billion. Despite this, the company’s foundation remains solid, supported by:
- RM1.5 billion in unbilled sales as of June 30, 2025, providing near-term earnings visibility.
- Strategic land acquisitions in Penang and Kedah, adding a potential RM1.7 billion in Gross Development Value (GDV) for long-term growth.
- A major diversification move through the acquisition of a 28% stake in Envictus International Holdings, the operator of Texas Chicken and San Francisco Coffee chains in Malaysia. This strategic investment is aimed at creating a new, stable earnings stream outside the cyclical property market.
Summary and Investment Recommendations
Paramount’s Q2 2025 results reflect a period of transition and strategic repositioning. While short-term profitability was impacted by a high comparative base, the company’s operational fundamentals remain intact. The proactive measures to manage property market risks, combined with a bold diversification into the F&B sector, highlight a forward-looking strategy focused on building long-term, sustainable value. The consistent dividend payout further underscores a commitment to shareholder returns.
For investors monitoring Paramount, several key areas will be crucial to watch in the coming quarters:
- Property Sales Momentum: The ability to convert its RM1.2 billion sales target amidst market headwinds will be a key performance indicator.
- New Project Launches: The successful execution of planned launches in Penang, Selangor, and Kedah in the second half of 2025.
- F&B Integration: The initial contributions and strategic synergies from the investment in Envictus International Holdings.
- Cash Flow Management: Continued strong cash flow generation to support both property development and new investment initiatives.
Final Thoughts
While the headline profit numbers for the quarter may seem underwhelming, the underlying story is one of strategic foresight. Paramount is not just weathering the storm in the property sector; it is actively building a more diversified and resilient business model. The move into the consumer-driven F&B industry could prove to be a masterstroke in reducing its reliance on the property cycle.
The key question now is how effectively the company can execute this dual-pronged strategy of optimizing its property business while integrating its new F&B venture.
Do you think Paramount’s diversification into F&B is the right move for long-term growth? Share your views in the comments section below!
