Propnex Reports 1Hfy2024 Earnings 19 Mil Down 138 Y O Y
Singapore’s largest property agency, PropNex, has reported earnings of $19 million for the first half of fiscal year 2024, which ended on June 30. This is a decline of 13.8% compared to the $22.1 million recorded in the same period last year. The decrease in earnings can be attributed to a decline in revenue during the period, with the group’s revenue for 1HFY2024 coming in at $345.6 million, down 5.1% year-on-year (y-o-y).
The main reason for the lower revenue was a decrease in commission income from project marketing services. Revenue from this segment declined by 19.6% y-o-y to $91.3 million, which PropNex attributes to a decrease in new launches in the private residential market. According to data, developers sold 1,889 new homes in the first half of fiscal year 2024, a decline of 44.2% from the same period a year ago.
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On the other hand, private resale transactions showed growth in the first half of the year, with 6,491 private homes changing hands, an increase of 16% compared to 1H2023. The HDB resale market also showed resilience, with a 6.9% y-o-y increase in transactions to 14,420 flats during the period.
The increase in secondary market transactions resulted in a 1.3% y-o-y growth in PropNex’s commission income from real estate agency services, which reached $251.9 million.
Ismail Gafoor, executive chairman and CEO of PropNex, points out that private resale transactions made up 70.9% of total private residential transactions in the first half of 2024. He further predicts that the resale market will continue to drive private home sales this year, with an estimated 13,000 to 14,000 resale private homes expected to be transacted for the whole of 2024.
PropNex has proposed an interim cash dividend of 2.25 cents per share for 1HFY2024.
Looking ahead, the group has revised its forecast for private new home sales in 2024 due to the lower number of new launches and the continued impact of cooling measures introduced last year. It now anticipates between 5,500 and 6,000 private new home sales this year, down from the previous forecast of 6,000 to 6,500. The group also predicts a 4% to 5% increase in overall private home prices in 2024, a lower figure compared to the 6.8% price growth in 2023.
Meanwhile, the HDB resale market is expected to remain strong, with PropNex projecting resale volumes to fall between 28,000 and 29,000 units this year, higher than the 26,735 flats sold in 2023.