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HRnetGroup posts 7.1% rise in FY19 profit, sees potential revenue impact from virus

RECRUITMENT company HRnetGroup’s full-year net profit grew 7.1 per cent to S$51.6 million in 2019, from S$48.2 million a year ago.

However, the mainboard-listed firm noted that the uncertainty in the business environment amid the coronavirus outbreak is affecting its operations in Q1 2020, in terms of clients’ decisions on the hiring and start work dates of selected candidates.

“Companies are taking time to reorganise logistics, processes and flow of people within their organisations,” HRnetGroup said on Thursday.

This might have an impact on the recognition of revenue arising from cases where job candidates have already signed the letter of appointment but are awaiting confirmation of the date they start work.

“It appears that the pipeline building for our Q2 2020 may be affected, depending on how the Covid-19 (situation) pans out in Q1 2020,” the firm added.

For 2019, earnings per share stood at 5.13 Singapore cents, up from 4.77 cents previously.

Group revenue declined 1.3 per cent to S$423.1 million, from S$428.5 million a year ago, weighed down by lower contribution from the professional recruitment business but partially offset by higher revenue from flexible staffing.

“This is typical of economic downturns when flexible staffing revenues are generally more resilient than professional recruitment revenue,” HRnetGroup said.

Gross profit fell by 6.3 per cent to S$145.6 million for the year, with most of the drag coming from the fourth quarter which bore the brunt of the trade war.

Singapore, the largest market for HRnetGroup, accounted for the bulk of the decline in gross profit, while the growth in mainland China, Hong Kong and Indonesia were pared down by the weakness in Taiwan, Malaysia and Thailand.

A final cash dividend of 2.8 Singapore cents was proposed for 2019, the same as the year before, for shareholders’ approval at an upcoming annual general meeting. The date payable will be announced later.

Shares of HRnetGroup were flat at 58.5 Singapore cents as at 9.27am on Thursday, after the results were released.