SINGAPORE (Aug 13): Real estate agency PropNex posted an 11.9% drop in earnings to $3.7 million for the 2Q19 ended June, from $4.2 million a year ago.

Earnings per share fell to 1.00 cents for 2Q19, some 26.5% lower compared to 1.36 cents in 2Q18.

2Q19 revenue fell 24.3% to $92.1 million, from $121.6 million a year ago.

This was mainly due to a 25.5% decrease in commission income from agency services to S$70.5 million and a 22.0% drop in project marketing services to $19.8 million.

Gross profit rose 4.0% to $9.4 million during the quarter, as cost of services fell at a faster rate of 26.5% to $82.7 million.

However, PATMI fell 11.9% as the group reported higher expenses during the quarter, despite the absence of IPO expenses of $1.1 million incurred in 2Q18.

Other expenses more than trebled to $2.6 million in 2Q19, compared to $0.8 million a year ago.

This was mainly due to the increase in advertising and marketing expenses, an impairment loss on trade and other receivables, as well as legal and professional fees.

Staff costs rose 12.1% to $2.6 million during the quarter, mainly due to salary increment, increase in the average staff headcount, and the accrual of staff bonus on a quarterly basis instead of accruing at the end of each financial year.

As at end June, cash and cash equivalents stood at $72.6 million.

The board has declared an interim dividend of 1.25 cents, representing a payout ratio of 81.1% of 1H19 profit. The interim dividend will be paid on Sept 16.

“A year on from the implementation of the property cooling measures, we are seeing the primary private market recovering strongly since cooling measures were first introduced in July last year. We expect the market to remain resilient and strong sales momentum to carry through to the end of this year, driven by a strong pipeline of attractive new launches,” says Ismail Gafoor, co-founder, executive chairman and CEO of PropNex.

“On the other hand, the private resale market, which was the hardest hit by cooling measures, is still feeling the effects,” he adds. “Coupled with the recent economic uncertainties, the change in sentiment towards these properties has led to owners postponing and holding off the decision to sell their properties in the current economic climate.”

Shares in PropNex closed 1 cent lower, or down 2.0%, at 49.5 cents on Tuesday before the results announcement.