REA Group has announced its results for the six months to December 31, with the group reporting a dip in net profit as listings in Sydney and Melbourne fell as a result of tough property market conditions.
The property listings and data giant reported a 5 per cent growth in annual revenue to $617 million, a 2 per cent reduction in EBITDA to $359 million and a 9 per cent decrease in net profit to $205 million, according to an REA Group ASX update.
The reduction in net profit was in excess of analyst expectations.
REA Group will pay a final dividend of 75 cents per share.
Revenue growth, which takes into account global earnings, was underpinned by a 3 per cent increase in Australian revenues, REA reported.
Core revenue across REA’s Australian businesses sat at $581 million.
REA Group Chief Executive Officer Owen Wilson said yield growth on advertising products had enabled it to offset a challenging market environment, with customers turning to premium advertising products.
“The Australian property market was heavily impacted during the first half by unprecedented consecutive interest rate hikes,” Mr Wilson said.
“While underlying demand remained healthy, uncertainty around future interest rate movements caused some sellers to pause and buyers to re-calibrate as borrowing capacities fell.
“Despite these conditions, REA continued to deliver revenue and yield growth during the half.
“This performance underscores the strength of our products and audience, with customers increasingly
relying on our premium products to maximise the impact of their campaigns.”
Listings in Sydney and Melbourne fell significantly across the first half of FY22/23, according to REA Group.
They were down 9 per cent nationally, down 17 per cent in Sydney and down 13 per cent in Melbourne.
The group’s flagship site realestate.com.au maintained its leadership position over the six months.
The site recorded a 20 per cent year-on-year increase in active members.
“In a challenging market, the value of realestate.com.au’s unparalleled audience, engaging consumer experiences, and rich data-driven insights becomes increasingly important,” Mr Wilson said.
“We are the number one property portal in each of our markets and remain keenly focused on building the engagement and loyalty of consumers throughout their property journey.”
Mr Wilson predicted that tough market conditions would continue to put a strain on profits in the coming six months.
“The uncertainty caused by rising interest rates is likely to continue in the coming months but we do expect that when interest rates stabilise we will see increased activity in the property market,” he said.
“The Australian economy is strong, unemployment is low and immigration is increasing.
“Each of these underpin our property market.”
