Shares of SEEK Ltd, the Australian employment marketplace operator, closed lower on Tuesday after the company disclosed a substantial write-down on its Chinese investment and outlined plans to exit its stake in Employment Hero. The stock finished the session down 3.3% at A$16.54, reflecting investor unease amidst a mixed set of half-year results.
Financial Performance: Adjusted Profit Up, Statutory Loss on Impairment
For the six months ended December 31, 2025, SEEK reported a 35% increase in adjusted net profit after tax, which reached A$104.1 million. This performance was supported by a 12% rise in net revenue to A$600.9 million and a 19% gain in EBITDA, which climbed to A$267.1 million. However, the statutory result told a different story, with the company posting a loss of A$249.9 million. This was primarily due to significant items, including a total impairment of A$356 million related to its investment in Zhaopin, the Chinese online recruitment platform.
The Zhaopin write-down stems from ongoing discussions concerning a simplification of the entity's ownership structure and a strategic review being conducted by its new management team. This development has introduced considerable uncertainty into the valuation and near-term outlook for SEEK's China operations, a segment that has been a persistent concern for the market.
Revised Outlook and Shareholder Returns
In response to the evolving operating environment, SEEK's management tightened its full-year guidance for fiscal 2026. The company now anticipates net revenue to be in the range of A$1.19 billion to A$1.23 billion. Adjusted profit is forecast between A$195 million and A$215 million, while the EBITDA guidance remains unchanged at A$530 million to A$550 million. Total expenditure is still expected to be between A$810 million and A$840 million.
Despite the statutory loss, SEEK announced a record interim dividend of 27 Australian cents per share, fully franked. This provides shareholders with valuable Australian tax credits. The record date for the dividend is set for March 18, 2026, with payment to follow on April 1, 2026.
Strategic Moves: Employment Hero Divestment and Market Position
A key strategic update accompanied the earnings release. SEEK announced that its venture capital arm, the SEEK Growth Fund, has initiated a process to sell its stake in Employment Hero, a workforce management platform. The fund expects to open a liquidity window for this holding in calendar 2026 and will use "reasonable endeavours" to manage liquidity requests over the subsequent 12 to 24 months.
Chief Executive Ian Narev expressed satisfaction with the momentum generated by the company's "Unification" program. He emphasized a strategy focused on expanding job placements, increasing yield—the revenue generated per ad or placement—and improving operating leverage. Narev notably highlighted that SEEK maintains a 4.9x lead in placement market share over its nearest competitor in the Australian market.
Market Context and Analyst Commentary
The results were delivered during Australia's busy February reporting season, a period where investors are quick to penalize perceived weaknesses. The primary concern for SEEK remains the balance between strong yield growth and softer job advertisement volumes. The company acknowledged that economic signals across the Asia-Pacific region are mixed, and potential tighter monetary policy in Australia could dampen hiring appetite. Recruitment activity in parts of Asia is expected to remain subdued in the near term.
Analyst reaction was measured. UBS analyst Lucy Huang noted the results were broadly in line with expectations, with yield performance carrying the period. However, she pointed to potential downside risks if advertising volumes deteriorate further, according to commentary reported by Finance News Network.
Attention now turns to broker assessments in the coming days, further details on the Employment Hero divestment process, and whether SEEK's elevated yield metrics can be sustained as macroeconomic pressures potentially weigh on the total number of job listings. The company's ability to navigate its China exposure while executing its core strategy will be closely watched by the market.
