PropertyGuru says business has logged double-digit per cent growth in a year

[SINGAPORE] Lewis Ng, who took over as chief executive at PropertyGuru in March, has had a busy four months. But he is back on familiar ground, having spent six years as chief business officer of the online real estate portal from 2014.

In his first media interview since taking up the CEO post in March, he told The Business Times that PropertyGuru’s revenue and adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) grew by double digits between June 2024 and June this year. (The company’s last announced adjusted Ebitda was S$6.8 million for the quarter ended Jun 30, 2024.)

Ng said: “We made decisions to exit parts of our business that were a bit further away from our core business, which actually was quite costly … And as a result, we restructured and removed some of those costs, (which) drove a significant impact to our profitability.”

He was referring to the shedding of non-core businesses such as Sendhelper and PropertyGuru Finance. The move, announced in February, led to the cutting of 174 jobs. This came two months after PropertyGuru was delisted, following a US$1.1 billion acquisition by EQT Private Capital Asia, a unit of the Swedish private equity (PE) manager.

PropertyGuru’s shares were converted into the right to receive US$6.70 a share, which was a 7 per cent premium to the last close the day before the announcement. However, that US$6.70 was below the company’s listing price of US$8.33 on Mar 18, 2022.

A positive growth trajectory in Malaysia and resilient property demand in Vietnam are also powering the South-east Asian proptech firm’s top and bottom lines.

No publicly-available financial reports

Since the acquisition by EQT which led to its December 2024 delisting, PropertyGuru has not needed to make its financial reports publicly available. A check at the website of Singapore’s Accounting and Corporate Regulatory Authority indicated that PropertyGuru last filed its annual report on Dec 31, 2023.

In its last earnings report filed on Sep 4, 2024, it reported that its net loss had widened to S$16.1 million for the second quarter, from S$6.5 million in Q2 2023. Ng declined to comment on whether the company has since turned profitable.

PropertyGuru uses adjusted Ebitda as its key bottom line metric on the grounds that it reflects more accurately the underlying performance of the business.

Adjusted Ebitda was a 47.8 per cent jump from the corresponding quarter in 2023. Revenue rose by 10.3 per cent to S$40.7 million, driven mainly by higher contributions from its marketplaces segment, which was buoyed by improving conditions in Malaysia, Vietnam and Singapore, PropertyGuru said then.

Given the positive impact shedding the non-core businesses is having on its bottom line, Ng said the company has been “very judicious and deliberate” with its investments and areas of focus.

Instead of, say, a return into adjacent businesses such as mortgages, it has been pumping resources to launch artificial intelligence (AI) features. These include providing AI support to property agents so they can position their listings better.

No stress

As for whether working for an owner that is a private equity (PE) firm is giving him extra stress, Ng appeared to view it as a badge of honour.

PE firms “are effectively looking for great companies with excellent potential and looking at creating value, so that there’s a return for them and their investors. That’s the bottom line”, he said.

He is no stranger to working in a company owned by PE firms. In his first stint at PropertyGuru between 2014 and 2019, American PE giants TPG Capital and KKR owned about half of the real estate portal.

PE companies such as TPG, KKR and EQT invest in businesses in return for owning a stake. Often, the PE firms are actively involved in the management of their portfolio companies, with an eye on driving up their profitability and then selling them off for a profit.

Of PropertyGuru’s two biggest markets of Singapore and Malaysia, Ng said he is particularly excited about the latter.

Referring to PropertyGuru.com.my and iProperty.com.my, he said: “One of the big opportunities for us is Malaysia, where we own the No 1 and No 2 platforms. There’s a great opportunity for us to help deliver more value to our customers on both platforms, and we’ve historically not done a lot with that.”

The company is now looking into integrating the back ends and systems of the two platforms, so that customers can access them more seamlessly.

Ng, referring to the property market in Malaysia being vibrant, said that interest in Johor is being fuelled by the special economic zone jointly set up by Johor and Singapore; there have also been more listings for Penang and Kuala Lumpur.

Over in Vietnam, economic uncertainties brought about by the US trade tariffs have not hurt home-buying sentiment, he said.

While the rapid changes in tariffs “definitely affect sentiment, they still don’t affect the desire of people to own property”. The growing number of visitors to PropertyGuru’s Vietnam platform signals that interest in real estate is still there, even if transactions may have slowed.

When the US announced a broad range of reciprocal tariffs in April, Vietnam had the third-highest levy in South-east Asia, at 46 per cent. This has since been cut to 20 per cent, although neither Vietnam nor the US have published official term sheets on the trade deal that has been arrived at.

As for the outlook for PropertyGuru’s earnings growth, Ng said the company will focus on serving its two key customer groups: real estate agents and developers, and the home buyers and renters.

The biggest downside risks come from rising inflation and interest rates, he said, as these could hurt demand for homes.