HRnetGroup (CHZ) H1 2023 earnings summary

Executive summary

• H1 2023 revenue was S$294.8m, down 6.2% YoY, and PATMI was S$28.3m, down 18.3%, amid challenging hiring conditions.

• Flexible staffing proved more resilient than professional recruitment; lower SG&A partly offset weaker gross profit.

Financial highlights

• Gross profit was S$71.5m, down 22.2% YoY; profit before tax was S$35.3m, down 22.8%.

• PATMI was S$28.3m, down 18.3%, while net income was S$29.6m, down 21.4%.

• SG&A and other expenses fell 16.8% to S$45.8m from S$55.1m, mainly due to lower employee benefit expenses and profit-sharing payouts.

• Other income included S$3.7m in reversals of trade-related accruals, S$3.2m interest income and S$2.6m in government grants and subsidies.

Outlook and guidance

• Continued investment in people, startups and ventures planned, with a long-term view as Asia recovers.

• Growth plans combine organic startups and M&A, targeting market readiness, integration, synergies and profit accretion; S$43.1m of IPO proceeds remained pending deployment at 30 June 2023.

• Near-term sector focus to shift toward industrial and engineering, consumer and luxury retail, healthcare and life sciences, and away from fintech, crypto, ecommerce and internet sectors.