Lifull Q2 2024 Results: Revenues Down 20% YoY, Net Profit Down 13.5%

Lifull, the highly diversified Japanese portal operator, has released its financial statement for the three months until March 2024, with some caveats for performance after consolidation and acquisitions in the past 12 months.

Highlights include:

• Q2 revenues dropped 20.8% to 9.1 billion yen (USD 59 million), from 11.5 billion yen (USD 75M) in 2023.
• Q2 net profits dropped 13.5% to 515 million yen (USD 3.3 million), from 596 million yen ( USD 3.8M) in 2023.
• Full-year revenue forecasts for Overseas were adjusted down.
• 71.7% of revenues are attributed to the Japanese portal Homes.co.jp.
• Profits of 910 million yen for the sale of Lifull Space.

Lifull operates the Homes.co.jp portal domestically as well as international aggregators Mitula, Trovit and Nestoria which together with portal assets such as dotproperty, Hipflat, LaEncontré, and Properati form its Lifull Connect overseas segment.

The firm acquired Thai brokerage FazWaz in February 2023 and swiftly followed up with the purchase of Lamudi Mexico from EMPG in March.

The good news for Lifull is that real estate portal revenues for the quarter were steady. However, the Aggregation (down 29% YoY) and Tech-Enabled Agency (down 23% YoY) segments saw significantly reduced activity.

Nevertheless, Lifull remained positive in its comments, saying Lifull HOME'S is "progressing according to plan"—however, no numbers were attached to this statement.

HOME'S Services achieved a slight revenue increase (1.2%) at the expense of profitability, which dipped 17.8% to one billion yen for the quarter.

Due to some consolidations in the business, some metrics jumped up despite relatively poor performance for the quarter.

For example, the Overseas segment achieved revenues of four billion yen for the quarter, but Lifull said "revenue is expected to fall short of full-year forecasts". Meanwhile, one-off costs for the transition (namely, the integration of FazWaz) to the new management team have also reduced segment profit.

Overall, Lifull has reduced its forecast for the Overseas segment by 14.6% for the full financial year, while HOME'S Services has been reduced by 4.1%:

"We have revised our full-year forecast in light of partial delays in achievement of business plans and onetime increases in expenses related to changes in the management structure of our Overseas Businesses. No revisions have been made to revenue or expenses of other segments."

Lifull's presentation noted that FazWaz represents the highest earning potential in the future, while aggregators like Mitula and Nestoria are the least likely to grow revenues in the long term.