Propnex Reports 1Hfy2024 Earnings 19 Mil Down 138 Y O Y
Singapore’s leading property agency, PropNex, has announced a net profit of $19 million for the first half of fiscal year 2024 (1HFY2024) ended on June 30, which is 13.8% lower than the $22.1 million it recorded the previous year. The decline in earnings is a result of a decrease in revenue during this period. The group’s revenue for 1HFY2024 was $345.6 million, down 5.1% compared to the same period last year.
The decrease in revenue is primarily due to a drop in commission income from project marketing services. The revenue from this segment fell by 19.6% year-on-year (y-o-y) to $91.3 million, which PropNex attributes to fewer new launches in the private residential market. According to the latest data, only 1,889 new homes were sold in the first half of 2024, which is a drastic 44.2% decrease compared to the same period last year.
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On the other hand, transactions for private resale properties have increased in the first half of the year. During this period, 6,491 private homes were sold, 16% higher than in 1H2023. Resale transactions for HDB flats also saw a strong performance, with a 6.9% y-o-y increase to 14,420 flats sold.
The increase in transactions in the secondary market has resulted in a growth of 1.3% y-o-y in commission income from real estate agency services, bringing it to $251.9 million.
Ismail Gafoor, executive chairman and CEO of PropNex, points out that the private resale market accounted for 70.9% of overall private residential transactions in the first half of 2024. He also adds, “We anticipate the resale market to continue driving private home sales this year and predict that about 13,000 to 14,000 resale private homes could be transacted by the end of 2024.”
PropNex has proposed an interim cash dividend of 2.25 cents per share for 1HFY2024.
Moving forward, the group has adjusted its forecast for private new home sales for 2024 to a lower range, considering the limited number of new launches and the persistent impact of the cooling measures implemented last year. It now expects between 5,500 and 6,000 private new homes to be sold this year, down from the 6,000 to 6,500 units it had previously forecasted. PropNex also predicts a 4% to 5% increase in overall private home prices in 2024, a decrease from the 6.8% growth seen in 2023.
However, the demand for HDB resale flats is expected to remain strong, with PropNex projecting a volume of 28,000 to 29,000 units sold this year, higher than the 26,735 flats sold in 2023.
