HRnetGroup H1 revenue down 2.1% in 'extremely tough' market
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HRnetGroup (SGX:CHZ), a Singapore-based staffing firm, described the current market as “extremely tough.”
Revenue fell 2.1% year over year on a constant currency basis to SGD 285.9 million (USD 210.8 million) in the first half of its fiscal year ended 30 June. On a reported basis, revenue was down 3.0%.
“Revenue in Hong Kong S.A.R. and Indonesia had growth that was offset by declines in the other seven geographies that we operate in,” the company said in its earnings report. “Taiwan overall [gross profit] was stable as its [flexible staffing] growth was offset by [professional recruitment] decline. Singapore and Mainland China were the hardest hit as they respectively account for 63.9% and 24.0% of the GP decline, with both [professional recruitment] and [flexible staffing] businesses impacted.”
HRnetGroup noted the economy in mainland China did not recover as quickly as expected.
- Flexible staffing (temporary staffing) revenue fell 1.3% year over year to SGD 255.3 million (USD 188.2 million).
- Meanwhile, professional recruitment (permanent placement) revenue fell 20.7% to SGD 9.2 million (USD 6.8 million). “Whilst hiring freezes have eased compared to last year, cautious sentiments on the part of hiring managers and candidates persist across the Asian cities that we operated in,” the company said in its earnings report.
HRnetGroup - H1 2024
(SGD thousands) | H1 2024 | H1 2023 | % change | H1 2024 (USD thousands) |
Revenue | 285,906 | 294,756 | -3.0% | 210,821 |
Gross profit | 62,999 | 71,497 | -11.9% | 46,454 |
Gross margin | 22.0% | 24.3% | - | - |
Profit for the period | 22,795.00 | 29,624.00 | -23.1% | 16,809 |
Flexible Staffing
(SGD thousands) | H1 2024 | H1 2023 | % change | H1 2024 (USD thousands) |
Singapore | 180,491 | 184,428 | -2.1% | 133,090 |
North Asia* | 62,753 | 62,481 | 0.4% | 46,273 |
Rest of Asia** | 12,020 | 11,663 | 3.1% | 8,863 |
Total | 255,264 | 258,572 | -1.3% | 188,227 |
Professional Recruitment Revenue
(SGD thousands) | H1 2024 | H1 2023 | % change | H1 2024 (USD thousands) |
Singapore | 9,221 | 11,630 | -20.7% | 6,799 |
North Asia* | 17,975 | 20,764 | -13.4% | 13,254 |
Rest of Asia** | 1,480 | 1,902 | -22.2% | 1,091 |
Total | 28,676 | 34,296 | -16.4% | 21,145 |
Guidance
“Market conditions look set to get even tougher in Q3 and Q4 as geopolitical tensions continue to intensify and the trade war worsened into a cold war,” the company said in its earnings report. “We will do what is within our control, including keeping a tight rein to reduce costs, upskilling our consultants to fight even better in this market, and raising delivery standards to lock in trust and confidence in our client relationships.”
*North Asia encompasses China, Taiwan, Hong Kong, Japan and South Korea
**Rest of Asia encompasses Malaysia, Thailand and Indonesia
There was a marginal drop in the company’s share price by close of business on 13 August to SGD 0.66 (USD 0.50). The company has a market cap of SGD 662.47 million (USD 500.74 million).