PropNex net profit rises 10.6% in third quarter

REAL estate agency PropNex reported a 10.6 per cent improvement in its bottom line for its fiscal third quarter despite a dip in revenue, it said in an exchange filing on Thursday morning.

Net profit attributable to owners of the company grew to S$6.8 million for the three months ended Sept 30, 2020, from S$6.1 million in the year-ago period.

Revenue fell 3.3 per cent to S$118.5 million, from S$122.5 million in the year-ago period, mainly due to a decrease in commission income from agency services of about S$10 million due to the impact of Singapore's "circuit breaker", PropNex said.

This was partially offset by an increase in commission income from project marketing services of approximately S$6.6 million, driven by a higher number of transactions completed in Q3 2020.

Other income rose by 32.2 per cent year on year to S$1.6 million for the third quarter, mainly due to an increase of government grants under Singapore's Jobs Support Scheme.

Staff costs fell by 3.4 per cent to S$3.4 million on lower staff welfare expenses, as the annual staff retreat was cancelled. Other expenses decreased by 6.6 per cent to S$1.9 million due to lower advertising and marketing expenses.

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Earnings per share for the quarter was 1.83 Singapore cents, up from 1.65 cents in the year-ago period.

"We adapted our marketing approach quickly to safe-distancing measures when the pandemic first struck," said Ismail Gafoor, co-founder, executive chairman and chief executive of PropNex, noting that the company adopted digital technology such as online consumer seminars and a virtual property expo.

"We managed to increase our market share across three segments - new launches, private resale and HDB resale - over this period, allowing us to grow our net profit after tax by 9.3 per cent despite the very challenging operating environment," he added.

With Covid-19 measures likely to extend into 2021, the group believes that digital tools, such as virtual showflats, will continue to serve as an additional touchpoint for developers and salespersons to connect with potential buyers, Mr Ismail said.

For the nine months to September, PropNex reported an 82.8 per cent increase in net profit at S$21.6 million, from S$11.8 million during the same period last year. Revenue grew 24.6 per cent year on year to S$360 million.

"Despite the pandemic and economic uncertainties, the Singapore real estate industry has performed well in the third quarter of 2020," PropNex said, adding that this was largely on the back of strong domestic demand in both the private residential and public housing segments.

"The group believes that the momentum is likely to continue to the fourth quarter, and overall transaction volume for the full year of 2020 is expected to remain strong."

PropNex shares were trading flat at 69.5 Singapore cents as at 9.32am on Thursday.