Recruitment firm HRnetGroup CHZ has announced earnings of $63.6 million for the FY2023 ended Dec 31, 2023, 5.9% lower compared to its earnings of $67.5 million in the previous financial year.
Earnings per share for the full-year period came to 6.44 cents, down from 6.75 cents in FY2022.
Revenue for FY2023 also decreased 5.4% y-o-y to $578.5 million in the face of challenging economic conditions and sector-wide profit downgrades.
Gross profit also fell 20.2% y-o-y to $139.0 million, with gross profit margin decreasing 0.4 percentage points to 11.4% in FY2023.
Across the 17 Asian cities in which the group operates, Hong Kong, Jakarta and Taipei registered flexible staffing (FS) growth which was offset by reduced demand elsewhere.
Singapore, the group’s largest market with a 66.7% contribution to overall revenue, narrowly escaped a technical recession in 2023, affecting both professional recruitment (PR) and FS businesses.
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Meanwhile, the group’s PR business in Mainland China bore the brunt of the country’s weak economic performance.
As at Dec 31, 2023, cash and cash equivalents stood at $271.6 million.
The board has declared a final dividend of 2.13 cents per share. Along with the interim dividend of 1.87 cents paid out in September last year, the group’s total FY2023 dividends came to 4.0 cents per share.
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Looking ahead, the group notes that PR continues to face headwinds, with cost and headcount reductions a common phenomenon in the recruitment industry. Nonetheless, its strategy to pivot towards growth sectors or pockets of opportunities within relevant sectors remains the group’s focus.
“Whilst evergreen sectors like healthcare and life science and IT and technology will continue to be strong for our business, the semiconductor industry is expected to gain traction across the region as various economies look to diversify supply chain risk and ramp up efforts to advance and ride on the wave of artificial intelligence technologies,” says the group.
Separately, HRnetGroup announced on Feb 22 that it had signed a term sheet to invest in AllwaysHRnet (Shanghai) through its subsidiary, HRnet One (Shanghai).
AllwaysHRnet will be a joint venture entity with a share capital of RMB5 million ($950,000), with HRnet One (Shanghai) and Shanghai Xin Allways holding stakes of 51% and 49%, respectively.
Xin Allways is an entity incorporated in Shanghai, co-owned by four co-founders and key employees of Shanghai Allways Consulting, which specialises in recruitment in the China semiconductor industry.
This joint venture will see the transfer of businesses, contracts, databases, intellectual properties and all other relevant assets from Shanghai Allways to AllwaysHRnet. In addition, each of the co-owners will enter into employment contracts and non-compete agreements with HRnetGroup.
Shares in HRnetGroup closed 1 cent higher or 1.41% up at 72 cents on Feb 22.
