PropNex Q4 profit soars 90.5% to $14.3m

Real estate agency PropNex yesterday posted a fourth-quarter net profit of $14.3 million, up 90.5 per cent from $7.5 million in the year-ago period.

This comes as revenue for the three months jumped 56.1 per cent to $242 million from $155.1 million, following a boost to the agency's commission income for the quarter.

Earnings per share for the three months to Dec 31, 2021, rose 90.1 per cent to 3.86 cents, from 2.03 cents a year ago.

PropNex said the larger fourth-quarter commission income, made up of $34.9 million from agency services and $52.2 million from project marketing services, was driven by a higher number of transactions for the period due to improvements in the Covid-19 situation and the economy.

Its board is proposing a final dividend of seven cents per share, its highest final dividend payout since listing and up from four cents per share in the previous year.

Together with an interim dividend of 5.5 cents, this brings PropNex's total dividend to 12.5 cents.

For the full financial year 2021, revenue jumped 86.5 per cent to $957 million, from $513.5 million in the year-ago period. The group attributed this to higher commission income and increased transactions.

In particular, PropNex highlighted that full-year commission income from agency services was about $227.9 million, while commission income from project marketing services was about $216.8 million for financial year 2021.

The nearly $1 billion revenue figure comes after the agency said on Feb 21 that while commissions relating to property transactions carried out by its sales staff last year had exceeded $1 billion, it did not necessarily translate to an equivalent full-year revenue.

This was in response to Singapore Exchange queries.

The queries had been submitted following feedback that PropNex chairman and chief executive Ismail Gafoor had, at a private event, disclosed to its property agents that the group's full-year commission for last year had crossed $1 billion.

PropNex's full-year net profit came to $60 million, up 106.4 per cent year on year from $29.1 million.

On the group's outlook, Mr Gafoor said PropNex's strategic foray into the good class bungalow segment, with its latest senior appointment of Mr Henry Lim to lead its prestige landed division, "will allow us to capitalise on new opportunities in this area".

On the market outlook, Mr Gafoor noted: "The latest market data reflects the ongoing healthy demand for new homes, amid a declining supply of unsold inventory."

The group believes the Government's move to introduce new cooling measures on Dec 16 last year will moderate the fast-accelerating price growth, after noting the robust price increases in both the fourth quarter and 2021 overall.

It also projects that private home transactions may taper to 9,000 to 10,000, and resale property sales to 15,000 to 16,000, this year.

Meanwhile, it retains its forecast of 30,000 Housing Board resale transactions for this year in anticipation of healthy underlying demand for resale flats and the bumper stock of flats that are due to exit the five-year minimum occupation period this year.

Shares of PropNex yesterday ended trading at $1.71 - down 11 cents or 6 per cent.

THE BUSINESS TIMES