China Evergrande H1’s net loss shrunk to $4.5 billion

China Evergrande H1's net loss shrunk to $4.5 billion

Written by Claire C

HONG KONG (Reuters) – China Evergrande Group, the world’s most indebted real estate developer, on Sunday reported a smaller net loss for the first half of the year, thanks to higher revenue.

Evergrande said its losses from January to June amounted to 33 billion yuan ($4.53 billion), compared to a loss of 66.4 billion yuan in the same period a year earlier.

The developer is at the center of a real estate crisis in China which since late 2021 has seen a series of debt defaults, unfinished homes and unpaid suppliers shatter consumer confidence in the world’s second largest economy.

And this month, a default on US dollar vouchers by China’s largest private real estate developer, Country Garden, raised fears of contagion in an economy already weakened by tepid domestic and foreign demand, sluggish factory activity and soaring unemployment.

In a statement on Sunday, Evergrande said first-half revenue rose 44% from a year earlier to 128.2 billion yuan, as it “actively planned to resume sales and successfully exploited the brief boom of the real estate market that emerged at the beginning of the year.” year.” Money fell 6.3 percent to 13.4 billion yuan.

Liabilities decreased slightly to 2.39 trillion yuan from 2.44 trillion yuan at the end of 2022, while total assets also shrank to 1.74 trillion yuan from 1.84 trillion yuan.

The developer reported a combined net loss of $81 billion for 2021 and 2022 in its long-awaited earnings report last month, against a profit of 8.1 billion yuan in 2020.

As with Evergrande’s previous two annual financial statements, auditor Prism Hong Kong and Shanghai did not issue a conclusion on this report, citing several uncertainties related to operating as a going concern, including future cash flow.

Evergrande said its viability will depend on the successful implementation of the external debt restructuring plan, and successful negotiations with other lenders on payment extensions.

On Friday, Evergrande said it had “appropriately” met the exchange’s directives to resume trading of its Hong Kong-listed shares and applied to resume it on Aug. 28.

Trading in the stock has been halted since March last year pending results for 2021 and 2022 and the outcome of matters including the investigation into 13.4 billion yuan of deposits seized from a subsidiary.

Evergrande filed for bankruptcy protection in the US earlier this month as part of one of the world’s largest debt restructurings.

Courts in Hong Kong and the Cayman Islands will decide in early September whether to approve an external debt restructuring plan that includes $31.7 billion worth of instruments, including bonds, guarantees and repurchase obligations. Creditors voted on the plan last week and the developer has yet to reveal the outcome.

($1 = 7.2890 CNY)

(Reporting by Claire Gem; Editing by Christopher Cushing, Hugh Lawson and Sharon Singleton)

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