REA Group has reported its financial results for the half-year ended December 31, 2022, posting a 5% YoY revenue increase to $617 million amid strained market conditions caused by rising interest rates.
This growth was driven in part by a 3% YoY core revenue increase in Australia, where REA Group operates PropTrack, Mortgage Choice and its flagship real estate listings website, realestate.com.au.
At REA Group’s Australian operations, residential revenue increased by 5% to $425m, with an 11% buy yield hike offsetting the 9% drop in national listings. Commercial and developer revenue also recorded 5% growth to $72m, while revenue from media, data, and other was flat at $49m.
In the company’s ASX announcement on February 10, the only decrease was in financial services, where revenue fell 14% YoY to $35m on the back of market activity and an 11% reduction in settlements.
In Australia, REA Group also reported a 7% increase in core operating costs as a result of higher employee costs from wage inflation and continued investment to deliver strategic initiatives, along with increased marketing and travel costs.
This, combined with increased costs in REA India, saw the group’s overall operating costs up by 15%.
Additionally, the half-year results showed a decrease in EBITDA excluding associates of 2% to $359m, along with a 9% decrease in net profit to $205m.
Furthermore, the board determined to pay a final dividend of 75c per share fully franked, flat YoY.
REA Group CEO Owen Wilson (pictured above) commented on the Australian property market and how it had been impacted by “unprecedented consecutive interest rate hikes.”
“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,” Owen said.
“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.”
