SINGAPORE (May 10): HRnetGroup has announced earnings of $19.3 million of 1Q19, up 18.5% y-o-y from $16.3 million a year ago due to higher other income.  

Revenue for the quarter saw a 2.8% decline to $104 million from $107 million in 1Q18.

The lower group revenue was mainly due to lower placements closed in the Professional Recruitment division, which came on the back of cautious hiring on part of the group’s clients in Singapore. Nonetheless, HRnetGroup notes there was “excellent growth” for this division in Hong Kong, Mainland China, Japan and Thailand.

In the Flexible Staffing segment, higher gross profit in Hong Kong helped to offset lower contributions from Singapore, although overall division revenue fell to $80.3 million from $83.2 million with a gross profit margin decline to 15.1% from 15.5% the previous year.

Other income notably grew 70.5% to $11.3 million from $6.6 million previously, mainly due to a $1.1 million realised gain from disposal of strategic investments; unrealised gain of $4.4 million from revaluation of quoted and unquoted securities; and higher interest income.

Operating expenses grew to $23.1 million from $22.9 million a year ago due to higher office rental expenses from recently acquired businesses, as well as allowance for doubtful receivables.

Gross profit margin remained unchanged at 34.1% as compared to a year ago, which the group attributes to its insistence on profitable assignments and staffing project”.

As at end-March, cash and cash equivalents grew to $304.5 million from $281.8 million a year ago.

HRnetGroup says it intends to focus energies in North Asia as the bigger economies present higher growth opportunities, although it highlights the possibility of its Singapore business being impacted by strong ongoing economic headwinds should they continue for the rest of the year.

Shares in HRnetGroup closed 0.65% lower at 77 cents on Thursday.