AUSTRALIAN-based REA Group Ltd's revenue in Asia doubled more than twofold to A$19.2 million during the first half ended December 31, 2016 but is still miles away from being a major revenue contributor to the group.
The group's Asian operations also posted an operating profit of A$2.6 million during the first half, a slight improvement from the A$2.5 million registered a year ago.
During the first half, the group's total revenue grew 16% at A$337.3 million while operating profit rose 13% at A$200.1 million. Its net profit for the period was up by 6% at A$121.8 million.
The group's Australian operation remained its strongest division -- as its revenue represents more than 94% of the group's total revenue and its operating profit is 100 times more than Asia's operating profit.
The group's Asia business comprises iProperty and its Chinese listing site myfun.com.
The group revealed that its financial performance in Asia has been impacted by the decreased market transactions in Hong Kong by 13% and Malaysia by 17%.
Despite these conditions, the number of listings on iProperty sites increased during the half. It also revealed that average monthly visits to the combined Asian sites increased by 4% to 7.5 million and mobile visits have increased 11%. In Malaysia alone, mobile visits jumped by 23%.
During the half, iProperty and Brickz.my have also tied up to provide subscription-based data services providing transaction insights on the property market in Malaysia for property buyers, investors, developers and property agents.
Potential is big in Asia
While Asia is contributing only a small part of REA Group's overall business, the company remain optimistic on the region's potential.
This is partly because the company expects strong growth in the online real estate advertising over the near to medium-term.
Currently, the majority of the real estate advertising is spent on digital platforms (online). However, in Southeast Asia, about 10% of total real estate advertising are via digital platforms.
"These results and innovations highlights the long-term growth potential we see in the region. Asia is early in the transition to digital advertising and the opportunity for us is very clear as we build greater connections across our network.
"We will continue to focus on Asia, along with our continued relationship with Move in the US," said REA Group chief executive officer Tracey Fellows in a statement.
The huge growth potential of Southeast Asia was also one of the main reasons why the group acquired iProperty over a year ago -- in a deal that values iProperty at more than A$750 million.
To recap, in November 2015, REA Group made an offer of close to A$578 million to buy the remaining shares it does not own in iProperty. Prior to that, it has a 22.7% stake in the company.
Australia going strong
During the first half, Australia's revenue grew 12% to A$318.2 million, while the number of agents grew 5%.
The bulk of its revenue came from residential listings -- which jumped 14% to A$194 million.
The first half also saw its portal realestate.com.au registered a 14% jump in monthly visits at 47.9 million. It also revealed that its average monthly total time spent on site was at 254.2 million minutes and has an average monthly page views of 885.4 million.
"We have further cemented our leadership position on the back of record audience and engagement. In December, monthly visits to realestate.com.au were more than 2.6 times our nearest competitor and consumers spent over 8 times more time on our site than any other property site," claims Fellows.
Catcha’s iProperty gets US$100mil funding from News Corp company
iProperty’s widening loss: A deeper look into the business
iProperty market cap crosses RM1bil mark
For more technology news and the latest updates, follow us on Twitter, LinkedIn or Like us on Facebook.