HRnetGroup ("HRnet") reported their FY2023 earning result on Thursday [here]. Here is a quick dive into the numbers:
Numbers in S$ million unless stated otherwise.
| Twelve Months Ending | 31 Dec 2023 | 31 Dec 2022 | % Change |
|---|---|---|---|
| Revenue | 578.47 | 611.78 | 5.4 |
| Gross Profit | 138.97 | 174.15 | (20.2) |
| Net Profit | 66.06 | 72.46 | (8.8) |
| EPS (in cents) | 6.44 | 6.75 | (4.6) |
| DPS (in cents) | 4.00 | 4.00 | - |
HRnet has two key business segments: Flexible Staffing (FS) and Professional Recruitment (PR). Management said the uncertain economic climate saw continued shifts towards FS and the revenue proportion rose to 88.0% (FY22: 83.4%), while the gross profit proportion rose to 50.3% (FY22: 42.1%). On the other hand, the revenue and gross profit proportion for PR dropped to 11.3% (FY22: 15.9%) and 47.0% (FY22: 55.5%) respectively. Management attributed this to hiring freezes and cautious sentiments prevailing across the Asian cities HRnet operates in. Singapore is HRnet's largest market, contributing 66.7% (FY22: 64.9%) of the revenue. Overall gross profit reduction was mainly in Singapore and Greater China.
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| Flexible Staffing (source: FY2023 result presentation) |
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| Professional Recruitment (source: FY2023 result presentation) |
My Thoughts
HRnet business is closely entwined with the health of the economy. It is no surprise that their Greater China entity suffered, given China's lacklustre economic performance. FY2023 net profit would have been worse, if not for a S$8.1M increase y/y in "Other Income", which comprises reversal of trade-related accruals, government grants, interest income, fair value gain and dividend income. Management is watchful of overhead cost and continues to do so. Will take it easy and monitor the company's performance through 2024.
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