Jikbang Rebounds: 30% Deficit Cut, Q1 Operating Profit Turns Black

Proptech company Zigbang achieved positive performance improvements in 2023 through fundamental structural improvements, even amidst the construction and real estate market downturn. On a consolidated basis, it recorded sales of 101.4 billion won and an operating loss of 28.7 billion won, which is a result of reducing the operating loss by more than 30% compared to the previous year. Although it maintained sales in the 100 billion won range for two consecutive years, revenue slightly decreased compared to the previous year due to market conditions. The primary cause of the operating loss was amortization expenses for intangible assets, such as goodwill, incurred during the acquisition of Samsung SDS's Home IoT business unit, which is emphasized as an accounting cost with no actual cash outflow. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which reflects its actual cash generating capability, recorded -16.7 billion won, a significant improvement of over 41% compared to the previous year (-28.5 billion won), proving a clear improvement in cash flow. Notably, Zigbang succeeded in turning its operating profit to a surplus in the first quarter of 2024, initiating a tangible turnaround. This is the result of comprehensive efforts to improve its fundamental structure, including efficient fund management, securing profitability in new businesses, and strengthening productivity. Last year, Zigbang boldly reorganized its business structure. Moving away from its previous focus on advertising one-room and two-room listings, it concentrated on developing high-profit business models, such as launching exclusive services for certified real estate agents, 'Apartment PRO' and 'Apartment BASIC,' centered around the comprehensive apartment information platform 'Hogangnono,' and introducing informational advertising products for the pre-sale market. In the smart home new business segment, it also comprehensively reorganized everything from production processes to sales channels in response to rising costs and the construction market downturn, focusing on improving productivity. This year, Zigbang plans to stably establish its new real estate businesses while strengthening its B2C online sales channels for smart homes and gradually expanding the supply of new products and integrated solutions to the B2B construction market, thereby laying the groundwork for continuous growth. CEO Ahn Sung-woo stated his ambition to accelerate the performance turnaround by leveraging the Q1 profit turnaround achieved through improved profitability, by advancing real estate services and launching new smart home products.