PropNex reports 2021 net profit more than doubled

Singapore 50 dollar bill

Real estate agency PropNex reported Thursday its 2021 net profit jumped 106 percent on-year to S$60.03 million as property transactions increased. 

Revenue for the 12 months ended 31 December grew 86.5 percent on-year to S$957.49 million, the agency said in a filing to SGX. 

“The strong growth in the group’s revenue was mainly supported by higher commission income from agency services of approximately S$227.9 million and from project marketing services of approximately S$216.8 million. This was a result of higher number of transactions completed in the year, following improvements in both the Covid-19 situation and the economy,” PropNex said in the statement. 

Earlier this week, SGX queried statements from Chairman and CEO Mohamed Ismail at a salesperson development event on 10 January indicating commissions related to the more than 86,000 property transactions the company’s salespeople handled in 2021 would exceed S$1 billion. PropNex had noted that commissions aren’t recognised until the transactions are completed, and sometimes transactions are delayed or aborted. 

PropNex proposed a final dividend of 7.0 Singapore cents a share, for total 2021 dividends of 12.5 Singapore cents a share. For 2020, PropNex paid a final dividend of 4 Singapore cents a share, the filing said.

For the fourth quarter, PropNex reported net profit jumped 90.5 percent on-year to S$14.28 million on revenue of S$242.03 million, up 56.1 percent on-year. 

Outlook

PropNex noted that in mid-December, Singapore’s government imposed cooling measures on the property market, targeting both private and HDB (public) resale housing. 

In its outlook, PropNex said it expected private home sales and prices to taper slightly this year due to the cooling measures and rising interest rates. The company forecast price growth would ease to 3 percent to 5 percent, while private new home sales would slip to 9,000 to 10,000 units and resale transactions would slip to 15,000 to 16,000. 

“PropNex expects the HDB resale market to continue to perform relatively well in 2022, despite the recent cooling measures and planned increased in new flat supply,” the company said. “This is driven by demand from Singaporean households and first-time home buyers, particularly those who do not wish to wait for up to five years for their new BTO flat to be completed.”

The company projected HDB resale prices would rise 6 percent to 8 percent this year, with resale transactions projected at around 30,000 flats.