SINGAPORE (Nov 8): HRnetGroup reported 3Q earnings grew 17.5% to $12.6 million from a year ago as a result of the strong improvement in net profit after tax that increased by 23.9% to $13.6 million.
Total revenue for 3Q grew by 7.7% to $105 million as the group delivered its fourth consecutive quarter in excess of $100 million. Gross profit grew by 15.8% to a record high of $39.9 million.
Revenue from professional recruitment grew by 22.2% to $27.6 million and gross profit by 21.7% to $27.5 million, mainly attributable to the strong performance of our existing business units in North Asia -- particularly Mainland China and Hong Kong -- and Singapore and the positive contribution arising from the consolidation of its first month of operations with REForce and HRnet Rimbun.
Having placed 2,408 talents as compared to 2,186 in the last year, average gross profit increased by 10.5% to $11,415 per placement.
Revenue from Flexible Staffing grew by 3.4% to $76.7 million and gross profit by 5.7% to $11.8 million, largely led by its business units in Singapore and Hong Kong. The monthly average of contractor employees managed by it increased by 8.1% to 11,392.
Gross profit margin increased from 35.3% to 38.0% as contribution from professional recruitment increased from 65.6% to 68.9%.
Cost effectiveness improved as SG&A reduced from 64.1% to 61.3% of gross profit. HRnetGroup’s permanent heartcount increased by 107 to 925 of which 84.8% were sales people, the proportion of that achieving gross profit in excess of three times their payroll cost (PHC) jumped to 71.6% as compared to 68.6% last year.
The increase of $1.7 million in profit-sharing incentives and bonuses was in line with the top line growth brought about by its record high of 561 PHCs (including 78 additions this quarter) which effectively optimised its staff costs at 48.5% of gross profit as compared to 51.2% last year.
HRnetGroup says its M&A activities announced previously are beginning to bear fruits and the group has added Suzhou and Jakarta to a total of 13 cities of coverage in Asia.
Looking ahead, its organic expansion has also started to rev up as it incorporated RecruitFirst Staffing Services and Agensi Pekerjaan RecruitFirst to start up another flexible staffing business with its existing co-owner Daniel Choong in Malaysia; prepare for the setting up of RecruitFirst Shanghai as a flexible staffing business; and prepare for the setting up of HRnetOne Shenzhen as a professional recruitment business in new specialisations such as artificial intelligence in China.
Year to date, shares in HRnetGroup are up a cent to 80 cents.
