PropNex Q3 profit rose 10.6% on strong domestic demand for private, public homes

PropNex’s profit after tax and minority interest (PATMI) increased to $6.76 million during the third quarter of 2020 from $6.11 million over the same period last year.

PropNex saw its profit after tax and minority interest (PATMI) increase 10.6% to $6.76 million during the third quarter of 2020 from $6.11 million over the same period last year.

With this, the real estate agency also posted a 10.6% growth in earnings per share (EPS) to 1.83 cents in Q3 2020 from 1.65 cents in Q3 2019.

In a release issued on Thursday (12 November), the group noted that its Q3 2020 performance was “firmly led by strong domestic demand in both the private residential and public housing segments”.

“This could possibly suggest buyers’ confidence in the recovery of Singapore’s economy, as the country steadily navigates the new normal,” it said.

And despite the continued implementation of safe distancing measures as well as the restrictions on mass gatherings in Q3 2020, PropNex managed to deepen its dominance as market leader in new launches as well as in private and HDB resale segments.

In fact, PropNex transacted the greatest number of units within the quarter among competing marketing agencies appointed by developers for most of the projects launched. 

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Nonetheless, revenue fell 3.3% to $118.5 million in Q3 2020 from $122.5 million in Q3 2019, mainly due to the drop in commission income from agency services following the roll-out of circuit breaker measures.

However, this was “partially offset by a hike in commission income from project marketing services driven by higher number of transactions completed in Q3 2020 following the recovery of the private residential market segment post July 2018 property cooling measures and the group’s success in capturing a larger market share by transforming the business to adapt to new norms”. 

For the first nine months of the 2020, PATMI and EPS both soared 82.8% year-on-year to $21.6 million and 5.84 cents, respectively. Revenue also jumped 24.6% year-on-year to $360 million.

“The real estate market has outperformed expectations time and again in recent months. Notably, in September, we saw 1,329 new private homes (excluding Executive Condos) transacted, marking the highest monthly sale in more than two years. This was also the fifth straight month of increase in terms of transactions in the new launches segment,” said Ismail Gafoor, Co-founder, Executive Chairman and CEO of PropNex. 

“We observed that there is a sizeable pool of genuine buyers, HDB upgraders and investors, who are still keen to enter the market to take advantage of the relatively attractive pricing, especially in the current economic situation.”

Suggested read: PropertyGuru Singapore Property Market Index Q3 2020

He noted that the market has had its time to absorb the shock from COVID-19’s initial insurgence in January. 

“The Singapore government’s efforts in implementing effective control measures have ensured that the country is in a good position to battle the pandemic, and potential buyers are able to take comfort in the declining number of cases reported daily,” he said.

“Buyers right now probably have greater visibility on the potential challenges and opportunities ahead and are in a better position to make an informed decision.”

With COVID-19 measures expected to continue into 2021, PropNex sees digital tools, like virtual showflats, continuing to serve an additional touchpoint for salespersons and developers to connect with potential buyers.

“We launched this industry-leading initiative, to bring to home buyers a richer virtual viewing experience that is both engaging and immersive, as if they were physically there and yet, is extremely convenient for them and without the health risks,” shared Gafoor.

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