PropNex H1 profit falls 13.8% to S$19 million

REAL estate agency PropNex’s net profit for the first half of the fiscal year fell 13.8 per cent to S$19 million from S$22.1 million the year before.

Its earnings per share for the period correspondingly declined the same in terms of percentage to S$0.0257, versus S$0.0298 in H1 FY2023.

PropNex’s board proposed an interim dividend of S$0.0225 per share, which is lower than the S$0.025 per-share dividend for the prior year.

It reflects a payout ratio of 87.6 per cent of the group’s latest net attributable profit, said the group on Tuesday (Aug 13).

The company’s net profit decline comes as revenue slipped 5.1 per cent amid lower commission income from project marketing services, which fell 19.6 per cent to S$91.3 million from S$113.5 million in H1 FY2023.

PropNex said this drop reflected the reduced number of private new home sales amid fewer launches in the primary market.

The impact of property cooling measures also contributed to “restrained activities” in the market for H1, said executive chairman and chief executive officer Ismail Gafoor.

In contrast, the group noted strength in the secondary market as commission income from real estate agency services increased 1.3 per cent to S$251.9 million in the first half under review.

PropNex also highlighted a “significant” 41.4 per cent quarter-on-quarter increase to 3,802 transactions excluding executive condominiums in Q2, mainly due to limited new project launches and a “substantial price gap” between private new and resale homes.

“PropNex remains cautiously optimistic about the private residential property outlook for 2024 given the new supply slated to enter the market,” said Gafoor.

“Moreover, stabilising home prices, possible pent-up demand, and a potential easing of borrowing costs from Federal Reserve rate cuts could bode well for the residential market as home choices and affordability for buyers improve,” he added. 

Shares of PropNex ended Monday S$0.01 or 1.3 per cent higher at S$0.785.