Hemnet Sees Operating Profit Increase 61% in Bumper Second Quarter

The leading Swedish real estate portal operator Hemnet has released its shareholder report covering the second quarter of 2024. Highlights of the Stockholm-based company's interim report for the three months ended June 30th include:

• Net sales increased by 51.3% year-on-year to SEK 405.0m ($38.3m)
• EBITDA increased 53.7% year-on-year to SEK 216.2m ($20.4m)
• Operating profit increased 60.7% year-on-year to SEK 195.6m ($18.5m)
• Average revenue per listing (ARPL), increased 51.6% year-on-year to SEK 6,274 ($593)

Hemnet benefits from operating in one of the few vendor-paid advertising markets worldwide. Its impressive second-quarter uptick was attributed by CEO Cecilia Beck-Friis (pictured above) to increased demand among home sellers for extra services and increased listing volumes.

"Hemnet’s strong results for the second quarter were mainly driven by higher demand for our value-added services from property sellers. We also benefited from a steady increase in the number of published listings as the positive trends in the property market continued with more properties for sale, more transactions and increasing property prices."

The company is increasingly looking to steer Swedish home sellers towards these 'value-added services' and recently increased the amount of compensation that agents can earn from the portal in exchange for recommending them.

"On July 1, we launched our new compensation model for agents that reinforces our strong partnership with the industry and is weighted more heavily towards sales of our value-added services and therefore better aligns with Hemnet’s growth strategy. The new model is designed to give agent offices, who are active partners, even better possibilities to earn more from their partnership with Hemnet and we see this as one of the many opportunities to strengthen our relationships with the industry."

Hemnet is a clear market leader in Sweden claiming 550% more traffic than its closest competitor. Since floating on the stock market in 2021, the company has been able to leverage its position and the dynamics of the Swedish property market to steadily increase the revenue it generates from each listing.

Although its residential sales business continues to grow rapidly, Beck-Friis noted that Hemnet's B2B services such as display advertising and new development listings continue to be limited by "macroeconomic factors" impacting the portal's customers.