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PropNex’s 3Q21 earnings more than doubles to $14.4 mil

Atiqah Mokhtar
Atiqah Mokhtar11/10/2021 07:33 AM GMT+08  • 3 min read
PropNex’s 3Q21 earnings more than doubles to $14.4 mil
EPS stood at 3.89 cents for the 3Q21, compared to 1.83 cents in the 3Q20.
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Real estate agency PropNex has reported earnings of $14.4 million for the 3QFY2021 ended September, 2.1 times higher than the $6.76 million recorded the previous year.

Earnings per share stood at 3.89 cents for the 3QFY2021, compared to 1.83 cents in the 3QFY2020.

The higher earnings come on the back of higher revenue, which surged 98.8% y–o-y to $234.41 million for the 3Q. Revenue was mainly driven by higher commission income from agency services of around $67.5 million and from project marketing services of approximately $48.9 million, as a result of the recovering economy which lead to higher transactions completed.

Key segment markets - new launches private resale and HDB resale - all saw strong y-o-y growth in 3Q2021. Notably, private resale transactions hit a new ten-year high with 5,362 units changing hands.

See: Broker's Digest: CDL, Raffles Medical Group, PropNex, Centurion Corp, Top Glove

On a year-to-date basis as of end-September, PropNex’s revenue doubled to $715.5 million. Earnings stood at $45.75 million, up 112% y-o-y, while EPS stood at 12.37 cents.

See also: Second Chance set to report higher 1HFY2023 net profit

“Barring projects or corporate activities that may require significant cash outlay, and that the Group’s working capital continues to remain adequate, the company aims to pay out 75% to 80% of its FY2021 profits to shareholders," remarked Ismail Gafoor, executive chairman and CEO of PropNex.

PropNex’s cash and cash equivalents stood at $123.7 million as at Sept 30, compared to $94.7 million as at Sept 30, 2020.

The company highlighted its collaboration with NTUC’s Singapore Industrial and Services Employees’ Union (SISEU) to set up the PropNex Real Estate Salespersons Chapter - Agents’ Voice Matters through a formalised framework signed on Oct 7.

See also: SIA group wide load factor for Feb was 86.6%, down 0.3% over Jan

PropNex will provide subsidies of $0.5 million for all of its salespersons to be part of the PropNex Real Estate Chapter, in supporting their rights as well as promoting and advancing their interests.

Looking ahead, PropNex highlights the residential market may be “slightly muted” due to the restrictions under the “Stabilisation Phase” as well as the festive period during the end of the year.

Nonetheless, the group is projecting a total of close to 13,000 private new homes (excluding executive condominiums) and over 18,000 private resale units to be transacted. This represents a 30% increase from the 9,982 new homes sold in 2020 and a more than 67% increase from the 10,729 resale properties transacted in 2020. Overall private home prices are expected to rise 6% to 7%. In addition, the dwindling unsold stock – at 17,140 units as at the end of 3Q2021 – may also keep prices resilient given the limited supply.

On the public housing front, the group is projecting overall HDB resale volume to exceed 30,000 units in 2021, an increase of more than 20% from 2020, largely attributed to the delay in completion of new BTO flats.

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The strong demand for resale flats will likely continue to support HDB resale prices for the rest of the year and into 2022. PropNex expects HDB resale prices to grow by 11% to 12% for the whole of 2021. The higher HDB resale prices may also motivate flat owners to sell their flats to recycle capital to purchase a larger resale flat or a private property.

PropNex shares closed down 1 cent or 0.52% lower at $1.90 on Nov 9.

Photo: Samuel Isaac Chua/The Edge Singapore

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