Country Garden’s delayed results show significant losses amid a decline in sales in the sector

at Clare Gym

HONG KONG (Reuters) – Country Garden, once China’s biggest developer and now facing a court case, on Tuesday reported a long-delayed forecast of big losses for 2023 and 2024 financial results, hit by massive supply cuts amid a protracted property sector crisis.

Property sales in China have fallen nearly 50 percent in the past three years as the industry is reeling from an unprecedented debt crisis that began in 2021.

Country Garden, however, said it expects a smaller annual loss for the full year 2024, following the previous provisions on improved margins and lower administrative and selling expenses.

In the year It delayed the publication of full-year 2023 and 2024 interim financial reports after passing $11 billion in offshore bonds, prompting Hong Kong stocks to be suspended from trading from April 2, 2024.

The developer said in a filing on Tuesday that shares will remain suspended until further notice, without giving further details.

In the year It reported a net loss of 12.8 billion yuan ($1.75 billion) in the first six months of 2024.

Last year’s temporary loss, however, narrowed from a net loss of 48.9 billion yuan a year earlier, and the annual figure was 2.1 billion yuan. A net loss of 6.1 billion yuan in 2022, and a net profit of 26.8 billion yuan in 2021.

At the end of June last year, it had 250.2 billion yuan of interest-bearing debt, and cash and cash equivalents reached 6.7 billion yuan.

Liquidity question

Country Garden’s annual sales fell by more than 70% last year, dropping its national ranking from 7 to 16 in 2023, according to a study by real estate researcher CRIC. .

The publication of the result and an update on the overseas debt settlement published last week is linked to Country Garden’s defense of a competition petition filed by creditors in a Hong Kong court over default on a $205 million loan.

Guangdong province-based Country Garden said it had proposed a debt restructuring plan to creditors that would reduce its $16.4 billion in foreign debt by 70 percent and had reached an “understanding” with a group of creditors.

The next trial will be held on January 20.

($1 = 7.3311 Chinese Yuan Renminbi)

(Reporting by Clare Jim; Editing by Sumit Chatterjee, Jamie Freed and Emilia Sithole-Mataris)