Hemnet Blames "Challenging" Market For Q3 Sales and Profits Dip

Market-leading Swedish real estate portal operator Hemnet saw sales and profits fall in Q3 as "a continued challenging property market" affected the business. Notable points from the company's report for the July to September quarter included:

• Net sales dropped by 1.5% year-on-year to SEK 366.7m
• EBITDA dropped by 5.9% to SEK 195.4m
• Average revenue per listing (ARPL) was up 20.9% to SEK 7,477
• The number of published listings was down 19.2% to 41,600

Commenting on the results, recently appointed CEO, Jonas Gustafsson said:

"Despite a continued challenging property market, Hemnet demonstrated strong ARPL growth and resilience in the third quarter. Average Revenue Per Published Listing (ARPL) maintained its momentum, increasing by 21% to SEK 7,477. Net revenue declined by 1.5% to SEK 367 million, and EBITDA was down 5.9% to SEK 195 million, corresponding to an EBITDA margin of 53.3%.

Although the market remains challenging, we continue to act decisively – faster, smarter, and with a continued focus on innovation. Through this, we are strengthening Hemnet’s position for the benefit of buyers, sellers, and agents alike."

Hemnet says that its results reflect a domestic housing market seeing record high supply, longer sales cycles and continued price pressure. The company noted that its unique visitor count was actually up slightly year-on-year at almost two million unique visitors per week despite the weaker market conditions.

The other significant area of optimism expressed in Hemnet's reporting was around its average revenue per listing (ARPL), which has been on an impressive upward trajectory since the company floated on the Stockholm Nasdaq back in 2021. The company noted that it has managed to successfully migrate three-quarters of listings onto its Plus, Premium and new Max packages.

Gustafsson said that the company has been moving to strengthen relationships in the primary sector and saw revenues from property developers increase in the third quarter. He also signalled that Hemnet is working on new product initiatives designed to capture listings earlier in the sales cycle and shift the point at which Hemnet gets paid.

"To help sellers and agents fully leverage Hemnet’s potential, we are working on several strategic product initiatives. One of these is a pilot project launched on October 1, where we are testing the option for home sellers to pay only when, and if, the property is sold. We believe this commercial model can lower the threshold for sellers to advertise on Hemnet from start [sic], while also aligning payment timing with how real estate agents receive their commission."

Hemnet will be piloting a "pay only upon sale" model with agents next year, ostensibly to combat the threat of growing rivals Boneo and Booli, both of which offer pre-market listings.