PropNex Q1 net profit dips 6.1% on higher staff costs

REAL estate agency PropNex on Wednesday (May 11) posted a 6.1 per cent dip in net profit to S$13.9 million for the first quarter ended Mar 31, 2022, compared to net profit of S$14.8 million the previous year.

Earnings per share for the period fell 6.2 per cent to 3.76 Singapore cents, from 4.01 cents the year before.

Revenue for the quarter grew 9.5 per cent year on year to S$241.6 million from S$220.6 million, driven by higher commission income from agency services on higher transactions completed.

This was partially offset by lower commission income from project marketing services as there were fewer launches in Q1 of FY2022.

The drag on the group’s bottomline came mainly due to greater staff costs, which grew 26.5 per cent to S$4.8 million from S$3.8 million in Q1 FY2021 as higher provisions were made for performance-linked bonuses, and the group increased its average staff headcount.

PropNex said it is well on its way to attaining its goal of having 12,000 salespersons by end-2022, having seen growth of 26.4 per cent in the number of salespersons to 11,268 as at Apr 11, 2022, from 8,918 as at Jan 1, 2021.

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It noted that a team of management staff had also been recruited to support this expanded salesforce.

Other expenses jumped 55 per cent to S$3.4 million from S$2.2 million the year before, as the group ramped up its advertising and marketing expenses as well as booked a S$426,000 impairment loss on trade and other receivables.

Despite a “slow start in 2022 after an exhilarating performance last year” in the private residential market, PropNex said it expects the market to remain fairly resilient this year with prices potentially growing by 3 to 5 per cent.

It projects Housing Development Board (HDB) resale prices to grow by 6 to 8 per cent in 2022, as cooling measures temper the buoyant market sentiment and buyers becoming more resistant to higher prices.

“With prices climbing at a more measured pace in the first quarter, it also paves the way for a more sustainable overall price growth in 2022,” Ismail Gafoor, chief executive, chairman and co-founder of PropNex.

Shares of mainboard-listed PropNex closed on Tuesday S$0.04 or 2.4 per cent lower at S$1.66.