Propnex Reports 1Hfy2024 Earnings 19 Mil Down 138 Y O Y
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PropNex, the largest property agency in Singapore, has announced a profit of $19 million for the first half of its financial year 2024, which ended on 30th June. This is a 13.8% decrease from the same period last year when it recorded a profit of $22.1 million. The decline in earnings is attributed to a decrease in revenue during this period. The group registered a revenue of $345.6 million, which is 5.1% lower than the previous year.
The main reason for the drop in revenue was the decline in commission income from project marketing services. The revenue from this segment decreased by 19.6% to $91.3 million, which can be attributed to fewer new launches in the private residential market. According to PropNex, developers sold only 1,889 new homes in the first half of 2024, which is a significant decrease of 44.2% from the previous year.
On the other hand, there was an increase in private resale transactions during this period. A total of 6,491 private homes were sold in the first half of the year, which is 16% higher than the same period in 2023. The resale market for HDB flats also performed well, with 14,420 flats being sold, a 6.9% increase from the previous year.
The rise in secondary market transactions contributed to the 1.3% increase in commission income from real estate agency services to $251.9 million. Ismail Gafoor, the executive chairman and CEO of PropNex, noted that the private resale market accounted for 70.9% of all private residential transactions in the first half of 2024. He also stated that the group expects the resale market to continue driving private home sales for the rest of the year, with an estimated 13,000 to 14,000 resale private homes to be sold in 2024.
PropNex has proposed an interim cash dividend of 2.25 cents per share for the first half of 2024. Moving forward, the group has revised its forecast for private new home sales for 2024, taking into account the lower number of new launches and the ongoing impact of cooling measures implemented last year. It now expects between 5,500 and 6,000 private new home sales this year, lower than its previous forecast of 6,000 to 6,500. The group also predicts a 4% to 5% increase in overall private home prices in 2024, a decrease from the 6.8% growth recorded in 2023.
The HDB resale market is expected to remain resilient, with PropNex forecasting 28,000 to 29,000 units to be sold this year, higher than the 26,735 units sold in 2023.