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REA profit hit by $182m Asia write-down

Simone Ziaziaris  |  11 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] REA Group's (ASX: REA) full-year reported net profit has slipped 19 per cent to $206.3 million, on the back of a $182.8 million write-down of its Asian business due to weak market conditions.

But the online real-estate advertiser's net profit from core operations for the year to June 30 grew 12 per cent to $228.3 million while revenue from core operations rose 16 per cent to $671.2 million.

Revenue in REA's Australian arm, which includes realestate.com.au, realcommercial.com.au and Flatmates.com.au, grew 14 per cent to $633.5 million for the year, while for the company's North America business it rose 10 per cent to $US394 million ($A501 million).

In June, the company flagged the non-cash impairment hit, saying the pre- and post-tax impairment of goodwill was due to a decline in several Asian property markets as a result of changes to government and banking regulations.

On Friday, REA said there had been a 33 per cent reduction in the number of properties sold in Malaysia, while in Hong Kong, the government had introduced a number of cooling measures, such as an increase in stamp duty, to soften a highly competitive market.

The group's Asian operations, which include iProperty and Chinese site myfun.com, together recorded $37.7 million in revenue for the year.

Chief financial officer Owen Wilson said that despite the Asia decline, the company is confident the market's revenue will improve in 2018.

"The long-term opportunity in Asia is undeniable," Mr Wilson said.

"Overall, we are very confident about next year and much more importantly, the long term."

ASIAN WRITEDOWN HITS REA GROUP:

* Full year reported net profit down 19pct to $206m

* Revenue from core operations up 16pct to $671.2m

* Final fully franked dividend of 51 cents, up 5.5 cents

 

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