Shares in REA Group have fallen after the online real-estate advertiser flagged a non-cash impairment hit of approximately $180 million in its full-year results on the back of weak market conditions in Asia.
REA's shares dropped by more than three per cent during Thursday's session, but recovered to close at $67.45, down 52 cents, or 0.8 per cent.
The News Corp-controlled group said the pre- and post-tax impairment of goodwill for the year to June 30, 2017, was due to a decline in several Asian property markets as a result of changes to government and banking regulations.
REA said there had been a 33 per cent reduction in the number of properties sold in Malaysia, while in Hong Kong, the government had introduced a number of cooling measures, such as an increase of stamp duty, to soften a highly competitive market.
The group's chief executive Tracey Fellows said that while market conditions had been challenging in Asia, the group remains confident in the long-term growth opportunities in the region.
"We continue to invest in senior leadership to drive strategy and our focus on innovation and marketing positions us well for the market recovery," Ms Fellows said in a statement.
The announcement comes only days after REA said it would acquire an 80.3 per cent stake of mortgage broker Smartline and secured a broking partnership with National Australia Bank as part of a move into home financing.
The two strategic investments in the mortgage broking market are expected to contribute, net of broker commissions, between $26 million to $30 million in full-year revenue in 2018, REA said on Tuesday.
Outcomes of the impairment, which REA said has no effect on current trading, are subject to the finalisation of the company's full-year results which are expected to be released on August 11.
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