SINGAPORE (May 14): Real estate agency PropNex recorded a 67.6% drop in earnings to $2.0 million for the 1Q19 ended March, falling from $6.2 million in the corresponding quarter a year ago.

Earnings per share (EPS) sank to 0.54 cents for 1Q19, some 73.1% lower than EPS of 2.01 cents in 1Q18.

“The reduced number of new launches in the first two months of the year, compounded by the effects of the property cooling measures and increase in interest rates have inevitably impacted our financial performance,” says Ismail Gafoor, PropNex’s executive chairman and CEO.

1Q19 revenue fell 27.8% to $74.2 million, from $102.7 million a year ago.

This was mainly due to the decrease in commission income from project marketing services, which fell 60.6% to $14.4 million in 1Q19.

In addition, the group says commission income from project marketing services decreased as a significant number of option-to-purchase have not been completed as at Mar 31, 2019.

Staff costs increased by 29.3% to $3.2 million in 1Q19, mainly due to salary increment, an increase in the average staff headcount, and the accrual of staff bonus on a quarterly basis starting from this current quarter.

Other expenses rose 86.5% to $2.1 million for 1Q19, from $1.1 million a year ago.

This was mainly due to the increase in advertising and marketing expenses, impairment loss on trade and other receivables, legal and professional fees, recruitment fees, and bad debts written off.

As at end March, cash and cash equivalents stood at $79.6 million.

“In March… we observed developer sales rebounding strongly, signifying that buyers and investors are starting to feel more confident in entering the market again with developers continuing to price their developments sensitively,” says Ismail.

The group foresees new project launches that are strategically positioned and sensitively priced will remain as a pull-factor for upgraders and investors.

Amid the challenging market conditions, the company expects the private property market to pick up momentum towards the second half of the year, as en bloc owners are receiving their sale proceeds and are looking for replacement homes that allows for immediate occupation.

“Going forward, we intend to build upon the company’s solid foundation of its strong brand, talented employees and salesforce, as well as loyal customers. It is upon these strengths that we create a long-term plan that delivers profitable and sustainable growth,” Ismail adds.

Shares in PropNex closed 2.0% lower at 50 cents on Tuesday, before the results announcement.