JLL reported losses both in the second quarter and first half of the year amid transaction-based revenue headwinds.
The Chicago-headquartered consultancy swung to net loss of $5.5m (£4.3m) in the six months to the end of June from $479.4m profit reported a year ago.
The move comes amid a weak first quarter of 2023, followed by a sharp reduction in income in the second quarter to $3.2m from $335.5m.
Earnings were mostly hurt by an increase in interest expenses to $40.5m in the past three months from $15.7m last year, resulting in interest expenses of $66.8m for the half year, more than doubled from $25.9m posted for the H1 2022.
This was due to an increase in the average outstanding borrowings under JLL’s credit facilities and a higher effective interest rate.
Meanwhile, equity losses totalled $103.5m in Q2 2023 versus equity earnings of $53.6m the year before.
Half year figures stand at $106.1m loss vs $72.1m earnings, respectively. JLL noted a non-cash change in equity earnings/losses primarily associated with two JLL Technologies investments.
JLL chief executive Christian Ulbrich (pictured) said: “We continue to make progress on our long-term plan to improve operating efficiency while also making targeted investments in our brokerage teams that will drive profitable growth as market conditions improve.”
On the revenue front, JLL managed to show a resilient performance, generating $5bn in the three months to June, taking the total for H1 2023 to $9.8bn. However, this was still down on $5.3bn and $10.1bn, respectively, reported a year ago.
Revenue fall was driven by lower leasing activity across most asset classes and geographies. JLL also noted that market-wide transaction slowdown and extended interest rate uncertainty continued to impact its capital markets volumes.
Ulbrich said: “While investment sales and leasing volumes remained muted across the industry this quarter, we are beginning to see recovery signs as credit spreads narrow and asset prices adjust to the current rate environment.”
More positively, the company noted continued demand across its project management segment in its markets advisory division, where revenue was up 9% year-on-year.
Improved revenue performance was also marked in JLL technologies, up 18%, and the workplace management segment within the work dynamics division, which grew 2% on H1 2022.
Elsewhere, JLL reported annual run rate savings growth of $70m to $210m in total, adding that recent cost reduction actions are expected to drive future growth.
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