PropNex Q4 profit falls 8.9% to S$7.5m

REAL estate agency PropNex reported a fall in net profit to S$7.5 million for the fourth quarter of FY2020, 8.9 per cent lower from S$8.2 million for the same period a year ago.

However, revenue for the fourth quarter rose 18.8 per cent to S$155.6 million from S$131 million last year on the back of a recovery in the private residential market from both the property cooling measures in July 2018 and "circuit-breaker" measures in the second quarter.

In its filing on Wednesday, the company said that the higher revenue was supported by a higher commission income at S$96.8 million from agency services in Q4, 30.4 per cent higher from S$74.2 million for the year-ago period.

Ismail Gafoor, co-founder, executive chairman and chief executive officer of PropNex, said: "The current resilience in the market was fuelled by ample liquidity and low interest rates. As a result, the property market returned with relatively more activities in the second half of 2020."

The results translate to earnings per share (EPS) of 2.03 Singapore cents, against EPS of 2.22 cents last year.

Meanwhile, full-year net profit was up 45.2 per cent to S$29.1 million from S$20 million for FY2019. Revenue for the full year gained 22.8 per cent to S$515.6 million from S$419.8 million for FY2019.

The company said that its FY2020 performance was driven by domestic demand in both private residential and public housing segments. It noted that local property buyers had entered the market in 2020 looking to capitalise on the relatively low borrowing rates and attractive pricing in newly launched property development projects.

The board proposed a final dividend of four cents per share for FY2020, which will be paid on May 20 after books closure on May 10.

PropNex was optimistic on the property market in 2021, amid more vaccine roll-outs and an improving economy.

The group said it expects private home prices to climb by 3 per cent to 4 percent in 2021, noting that the number of unsold units is on the decline.

"Positive market sentiment and low interest rates may drive sales, while Singapore's effective management of the pandemic adds further gloss to the Republic's reputation as an investment safe haven," the filing stated.

Shares of PropNex closed at S$0.815 on Wednesday, up 4.5 per cent or 3.5 cents.