PropNex’s earnings for 4QFY2022 up by 24.5% y-o-y to $17.8 mil; FY2022 revenue hits record high

PropNex Limited reported a 24.5% y-o-y increase in earnings of $17.8 million for the 4QFY2022 ended Dec 31, 2022. This brings the group’s earnings for FY2022 to $62.4 million, a 3.9% increase year-on-year.

Revenue also saw a record-breaking figure of $1.03 billion, a 7.5% increase as compared to the year before. This was further bolstered by a 23.3% y-o-y growth in 4QFY2022’s revenue of $293.4 million, the highest ever quarterly figure for the group. The higher y-o-y revenue was attributed to an increase in commission income from agency services, as well as from project marketing services due to higher transactions completed during the last quarter, following improvements in both the Covid-19 situation and the economy.

Gross profit for FY2022 increased by 2.8% to $104.7 million in tandem with the revenue increase. Other income increased by 131.1% y-o-y to $16.1 million as a result of the derecognition of trade payables to agents and an increase in advertising and marketing income.

The 4QFY2022 and FY2022 Earnings per Share (EPS) are 4.80 cents and 16.85 cents respectively. Cash and cash equivalents came in at $138.8 million.

As part of its financial performance, PropNex is undertaking a bonus issue where one bonus share will be credited as fully paid per every existing PropNex share held, up to 370 million new ordinary shares. This is the group’s first bonus share issue, intended to encourage trading liquidity and broaden the distribution of PropNex’s Tengah Plantation EC shares.

A final dividend of 8 cents per share has been proposed, with the total dividend for the FY2022 set at 13.5 cents per share or 80% of the group’s FY2022 earnings.

As of Jan 1, the group’s number of salespersons grew 8% y-o-y to 11,667, the highest among Singapore’s real estate agencies.

For the 2023 outlook, PropNex foresees private home prices rising by 5% to 6%, a lower figure as compared to the 8.6% increase in 2022 due to higher land and construction costs. Demand for HDB resale flats is also expected to remain stable, with the group projecting that 28,000 to 30,000 flats could be resold this year.

Ismail Gafoor, co-founder, executive chairman and CEO of PropNex added “With higher grants for two to four-room HDB flats, this will encourage right-sizing of homes – potentially easing demand for five-room or larger flats. On the flipside, this could also further spur demand for resale flats given tight market supply, thereby keeping prices firm. Demand for non-residential properties in Singapore should remain resilient, underpinned by the country’s sound fundamentals.”