PropNex Limited has reported earnings or PATMI of $13.9 million for the 1QFY2022 ended March, 6.1% lower than earnings of $14.8 million in the corresponding period the year before.
Earnings per share (EPS) for the quarter fell 6.2% y-o-y to 3.76 cents.
Revenue for the 1QFY2022 increased by 9.5% y-o-y to $241.6 million due to higher commission income from agency services. This was partly offset by lower commission income from project marketing services.
Revenue from commission income from agency services grew by 21.1% y-o-y to $147.4 million, while revenue from commission income from project marketing services fell 4.9% y-o-y to $93.5 million.
During the quarter, cost of services increased by 10.2% y-o-y to $217.5 million.
Accordingly, gross profits inched up by 3.6% y-o-y to $24.1 million.
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Profit before tax fell by 7.2% y-o-y to $18.0 million after accounting for higher staff costs, amortisation of intangible assets and other expenses.
Net profit after tax (NPAT) fell 8.1% y-o-y to $14.9 million.
In the 1QFY2022, PropNex’s sales stood substantially lower than the 3,018 new homes and 4,748 resale homes transacted in 4QFY2021 due to the impact of the new cooling measures introduced in December 2021. The growing uncertainties from the Russia-Ukraine war, rising inflation and interest rates, limited new launches and seasonal lull also contributed to the lower sales volumes.
To be sure, developers sold 1,825 new private homes (excluding executive condominiums) in 1QFY2022 while 3,377 residential properties were transacted in the private resale market.
As at end-March, cash and cash equivalents stood at $161.9 million.
“The slower price growth and pullback in sales volumes in 1QFY2022 was due to the December 2021 cooling measures amidst growing geopolitical uncertainties and concerns over rising inflation and interest rates which in turn softened sentiment. This was coupled with the disruption of sales viewings during the Lunar New Year period and the Omicron wave then, where we observed that developers put out fewer new launches in the first quarter,” says Ismail Gafoor, co-founder, executive chairman and CEO of PropNex.
“However, with prices climbing at a more measured pace in the first quarter, it also paves the way for a more sustainable overall price growth in 2022,” he adds.
In its outlook statement, PropNex says it expects the private housing market to remain “fairly resilient” in 2022, with prices estimated to grow by 3% to 5% during the year, as reflected in the 0.7% price increase in 1Q2022 and higher new launch prices expected in subsequent quarters.
Singaporeans continued to form the bulk of private housing demand in 1Q2022, accounting for 82.8% of non-landed private new sales and 75.8% of non-landed private resale transactions, says the agency.
For the full year 2022, PropNex expects HDB resale prices to rise by 6% to 8%, while transaction volume could come in at around 28,000 to 29,000, as cooling measures temper the buoyant market sentiment and buyers become more resistant to higher prices.
Shares in PropNex closed 4 cents lower or 2.35% down at $1.66 on May 10.
