PropNex OYY has reported earnings of $22.1 million for the 1HFY2023 ended June 30, 18.4% lower than the earnings of $27.0 million in the corresponding period the year before.
Earnings per share (EPS) stood at 2.98 cents on a fully diluted basis.
Revenue for the period fell by 22.9% y-o-y to $364.3 million as the number of transactions completed for agency and project marketing services fell. The decline in the number of transactions led to lower commission income from both segments at $38.2 million and $69.9 million.
Since September 2022, the Singapore government has implemented a series of cooling measures including a doubling of additional buyer’s stamp duty (ABSD) rates for foreign buyers in April 2023.
Gross profit fell by 25.1% y-o-y to $35.8 million from the lower revenue.
That said, the group remains optimistic for a stronger second half of the year with an estimated 33 new launches with a total of 8,000 units to hit the market during the period.
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For the full-year 2023, about 11,529 new units are expected to be launched, more than double the 4,528 units launched in 2022.
The volume of resale HDB flats is still expected to range between 27,000 to 28,000 units in 2023.
“The property market is typically slower in the first half of the year, especially in the first quarter. This year, however, sentiment in the property market was compounded by two cooling measures introduced in 1H2023 (February Budget measures and April cooling measures) and elevated interest rates as high as 4.5% in the beginning of 2023,” says Ismail Gafoor, executive chairman and CEO of PropNex.
“Despite these challenges, we were able to achieve a creditable performance in 1HFY2023, thanks to the resilience of our asset light business model and our network of 12,000 salespersons. With 1HFY2023 behind us, we are confident of a more vibrant 2HFY2023 with interest rates easing below 3.5% and an estimated 33 new projects to be launched,” he adds.
As at June 30, cash and cash equivalents stood at $139.6 million.
As at July 31, the group’s number of salespersons stood at 12,073.
An interim dividend of 2.5 cents a share has been declared for the 1HFY2023. It will be paid out on Sept 4.
Looking ahead, the group intends to still grow its market share by scaling up its sales force to “better tap into opportunities in the local and regional real estate markets, and also to serve our customers better,” says Gafoor. “We [also intend to focus] on information technology development and training programmes to enhance productivity levels across our business operations,” he adds.
Shares in PropNex closed 2 cents lower or 1.89% down at $1.04 on Aug 8.
