Singapore’s PropertyGuru remains in the red despite Q4 earnings jump

SINGAPORE – Singapore’s online property portal PropertyGuru posted a net loss of 5 million Singapore dollars ($3.7 million) in the fourth quarter of 2022.

The loss comes as global interest rates continue to rise and as Vietnam, one of its most important markets, tightened lending in property.

Net loss for the three months to December 2022 came in at SG$5.2 million. It is almost 30% improvement from the previous quarter’s net loss of SG$7.4 million.

Full-year net loss in 2022 was SG$129.2 million, better than a net loss of SG$187.4 million the previous year.

The firm has yet to deliver a full-year result since its launch in 2007. It currently dominates the Southeast Asian market.

“While it is difficult to say when PropertyGuru is able to be back in the black in terms of net profit after tax, its 30% improvement in net loss is commendable,” said Maximilian Koeswoyo, a research analyst at Phillip Securities.

Meanwhile, fourth-quarter revenue came in at SG$40 million, up about 17% from a year ago. Full-year revenue rose 35% to SG$136 million.

Shares of PropertyGuru closed 1.68% higher on Wednesday.

“Increased product adoption, improved pricing and the continued integration of the iProperty acquisition helped offset challenging market decisions. That said, macro and fiscal uncertainty continues to test our clients,” said Hari Krishnan, Managing Director and CEO of PropertyGuru . during the earnings call on Wednesday.

“We believe the headwinds our core markets now face are largely temporary and the long-term runway and underlying outlook for economic performance in Southeast Asia has not changed,” Krishnan said.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, for the quarter was a positive SG$5 million, up from an adjusted EBITDA loss of SG$4 million in the same period in 2021.

Krishnan said higher borrowing costs and uncertainty surrounding Malaysia’s national election in November weighed on sales, while the Singapore market remained resilient. In Vietnam, the government continued to tighten credit to manage debt levels, resulting in a drop in the property listing.

After acquiring its Southeast Asian competitors – such as iProperty and brickz in Malaysia, thinkofliving and Prakard.com in Thailand in 2021, as well as Batdongsan in Vietnam in 2018 — the company is still a dominant player in the region.

“PropertyGuru is definitely still in a growth-stage mindset as it continues to actively look for additional M&A opportunities and focus on how to offer a more complete service offering on the platform,” Koeswoyo told CNBC in an email.

“PropertyGuru’s stock has lost about 50% of its value since it listed in March 2022, and the daily volume is also on the low side, so I think the stock has not received significant attention from investors,” Koeswoyo said.

“I think the stock is going to face some challenges in the short term, especially with the cooling measures from governments across the Southeast Asia region, but I think it’s going to have a big turnaround as PropertyGuru shows early signs of a positive trajectory. net profit after tax,” Koeswoyo said.

PropertyGuru expects the integration and scaling of the Sendhelper acquisition “to negatively impact profitability by SG$3 million to SG$4 million in 2023,” it said in its earnings release.

Sendhelper runs an app that offers home services such as cleaning and pest control and was acquired by PropertyGuru last year, marking the latter’s foray into the market.

The online property portal maintains a “conservative outlook in 2023” amid challenges, expecting full-year 2023 revenue of between SG$160 million and SG$170 million and adjusted EBITDA of between SG$11 million and SG$15 million, the release said.

PropertyGuru began trading on the New York Stock Exchange on March 18 last year.