Hemnet Q2 results show solid ARPL growth despite listing decline

Investing.com -- Hemnet Group AB on Friday reported solid second-quarter results with Adjusted EBITDA coming in 1.5% ahead of company-compiled consensus, while Net Sales were in-line with expectations.

The Swedish property portal saw its Adjusted EBITDA margin expand by 0.6 percentage points to 54%, slightly ahead of the 53.4% consensus.

This margin expansion reverses a negative trend from the previous three quarters.

Average revenue per listing (ARPL) grew by 34.7%, which was 2.6% ahead of consensus, though this represents a deceleration from the 37% growth in Q1 and 40.6% in Q4 of the previous year.

The company attributed the continued strong ARPL growth to higher conversion rates to premium packages.

The growth was supported by the company’s Hemnet Max service, which while accounting for a smaller share of upgrades itself, has created a halo effect encouraging more sellers to upgrade their listings to Premium and Plus tiers.

Property listings declined by 9.3% compared to the same period last year, falling 0.9% short of consensus expectations, reflecting a slowdown in market activity. This contrasts with the 0.2% growth seen in Q1.

For the first half of the year, Hemnet achieved 23.3% net sales growth and a 51.5% EBITDA margin. The company maintained its financial objectives of 15-20% net sales growth and long-term EBITDA margins above 55%, with leverage below 2x.

Hemnet’s stock closed at SEK289.00 on Thursday, with Jefferies analysts maintaining a Buy rating and a price target of SEK435.00, suggesting a 51% potential upside.

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