Singapore – HRnetGroup reports slight revenue increase but profits fall

Singapore-based recruitment firm, HRnetGroup, reported second-quarter revenue of SGD 106.7 million (USD 78.4 million), up 1.6% compared to the same period last year. This was the 8th quarter that the group crossed the SGD 100 million (USD 73.5 million) mark.

(SGD millions) Q3 2019 Q3 2018 Change Q3 2019 (USD millions)
Revenue 106.7 105.0 1.6% 78.4
Gross Profit 38.3 39.8 -3.8% 28.1
Net Profit After Tax 13.1 13.6 -3.7% 9.6

According to the group gross profit fell as business momentum was stronger in flexible staffing business which carried lower margins.

Geographically, North Asia reported 5.0% year-on-year growth in gross profit. Gross profit in Singapore was down 11.3%. The Rest of Asia segment reported an increase of 2.3%.

During the period the group accumulated a total holding of 29.95% of Staffline, which is now an associate company of HRnetGroup.

Adeline Sim, Executive Director of HRnetGroup, commented, “HRnetGroup’s focus on geographical diversification has resulted in a solidly profitable platform which transcended the challenging operating environments particularly in Singapore, Kuala Lumpur and Hong Kong.”

“For the first time, Singapore’s contribution to gross profit has fallen below the 50% mark, which whilst anticipated, came earlier than expected,” Sim said. “Our North Asian units on the other hand have made strong strides and now contribute 47% of our GP. Our focus on penetrating more resilient sectors, coupled with the expansion of our flexible staffing brand RecruitFirst, have helped to offset some pressure from the lacklustre demand in the professional recruitment segment. The addition of Staffline to our portfolio of companies is a significant development, as we officially plant our flag beyond Asia.

“In this current environment, our stakeholders take comfort in our healthy level of profitability coupled with strong intent and track record of growing and evolving,” Sim said.

In trading today HRnetGroup shares closed at SGD 0.64 (USD 0.47), up 6.67% on the day. Based on its current share price the company has a market value of SGD 644.52 million (USD 473.9 million).

Source: Staffing Industry Analysis | Apply: Singapore – HRnetGroup reports slight revenue increase but profits fall