PropertyGuru, a Singaporean real estate search service, reported a net loss of SG$ 7.4 million (US$ 5.3 million) for the quarter ending Sept. 30.
This is a significant decrease from the net profit of SG$ 3.8 million (US$ 2.7 million) reported in the previous quarter.
However, this is an improvement over the SG$ 9.6 million (US$ 6.8 million) net loss recorded in the same quarter a year ago. Third-quarter revenues increased by 47% year-over-year, as per CNBC’s recent report.
For comparison’s sake, adjusted EBITDA for the third quarter was a positive SG$ 5.7 million (US$ 4.1 million), up from a loss of SG$ 1.5 million (US$ 1.1 million) in the same period a year ago.
EBITDA shows the earnings before interest, taxes, depreciation, and amortization and is a key indicator of financial health.
Challenges in the Business
According to Hari Krishnan, CEO and managing director of PropertyGuru Group, “Our third quarter results illustrate that PropertyGuru has been able to produce strong business performance even as some of our core markets have begun to face headwinds from the challenging economic conditions being experienced around the globe.”
On Monday night’s results call, Nov. 21, Krishnan mentioned some of the difficulties the company is facing, including increased taxes and stamp duties in Singapore.
According to him, obtaining a mortgage loan in Vietnam is now more challenging.
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The Firm’s Optimism
CFO Joe Dische confirmed that even with short-term macro obstacles, they remain confident about the long-term potential for PropertyGuru.
Dische discussed recent developments in the Malaysian and Singaporean real estate markets on CNBC’s “Squawk Box Asia” on Tuesday, Nov. 22.
He explained that activity in Malaysia has been quite encouraging. And when it comes to housing, the government has been on the side of the underdog and the affordable.
Some stamp duty concessions began to take effect for first-time buyers shortly before the most recent election. This means that measures are being taken to stabilize the market, Dische believes.
The country will increase the stamp duty exemption for first-time homebuyers from 50% to 75%, as announced by Finance Minister Zafrul Aziz in his budget statement to Parliament in early October.
He highlighted that the increase in demand for rental properties in Singapore could be attributed to the reintegration of ex-pats and returning Singaporeans and to the postponement of the delivery of build-to-order apartments and restoration works.
However, Dische claims that people in Vietnam are having trouble getting credit because the government is tightening down on speculative activities.
“This does have a knock-on impact on the ordinary person who is trying to purchase a property. But I think there has been some action against that speculation which drives inflation in those markets. As affordability drops, some people will wait and see and move into the rental market, increasing prices and demand,” Dische remarked.
Having gone public in October, the company made its first purchase shortly thereafter, a Singaporean home services technology firm called Sendhelper.
In March, PropertyGuru began trading under its own ticker symbol on the New York Stock Exchange.
Since its initial public offering, PropertyGuru has seen its stock price drop by 39%.
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Written by Trisha Kae Andrada
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