REA shrugs downturn in property

ONLINE real estate advertising company REA Group has enjoyed a healthy first half in Australia despite the slowing property market.

REA yesterday said it was taking a $173.2 million charge on its Asian operations, but revenue from its core operations clocked in at $469.2 million for the six months to December – up 15 per cent from the same period a year earlier.

Earnings before interest, tax, depreciation and amortisation from core operations spiked 19 per cent to $289.1 million.

Its first-half profit came in at $2.3 million, down from $132.5 million a year earlier, once the non-cash impairment charge on the Asian business was taken into account.

Revenue in the Australian operation grew 15 per cent to $443.2 million for the half, driven by an increase in revenue from the residential business – up 16 per cent to $302 million – and the inclusion of Hometrack and contributions from its Smartline unit.

The results came in a challenging market where listings have broadly fallen and a crackdown on lending to foreign buyers has pushed down home building. REA chief Owen Wilson said there had been strong growth, despite the tough conditions.

The company said market conditions were not expected to improve in the short-term, and listings may be weaker in the lead up to the NSW and federal elections.

Residential listings in January were down 11 per cent.

REA is majority owned by Bulletin publisher News Corp. REA Group’s shares lost almost 5 per cent to close at $74.06.