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28-08-2019, 07:06 PM
China Evergrande first major mainland developer to report profit decline as cooling measures hit sales
* The country’s third-largest property developer reports its first profit decline since H1 2016
* Sales ease 7.4 per cent in the first half as cooling measures bite
Pearl Liu
Published: 6:56pm, 28 Aug, 2019
China Evergrande, the country’s third largest property developer by sales, posted a 45 per cent plunge in first-half core profit on Wednesday, becoming the first among the mainland’s top developers to report a decline in earnings.
The sharp fall in core earnings – its first drop since the first half of 2016 – came after the central government rolled out a slew of cooling measures to curb property price growth earlier this year.
Interim core profit came in at 30.35 billion yuan (US$4.2 billion), while revenue dropped 24.4 per cent to 226.98 billion yuan in the comparable period.
No interim dividend was recommended.
Contracted sales in the first six months eased 7.4 per cent year on year to 281.81 billion yuan, accounting for less than half the company’s 600 billion yuan annual sales target. For the six months to June, it said average selling price increased to a historical high of 10,756 yuan per square metre.
Despite the sales shortfall, the company said it was confident that it could achieve its annual sales target of 600 billion yuan.
“We can definitely meet the target as 74 million square metres will be put on sale in the next half,” said Xia Haijun, vice-chairman and president of China Evergrande. “If we manage to sell 40 per cent of this area, the sales target will be met.”
Evergrande’s net gearing ratio, a measure of equity to debt, stood at 152.1 per cent, up from 151.9 per cent at the end of 2018, up 24 percentage points from six months earlier, according to a company filing to the Hong Kong stock exchange.
Xia had pledged last year to cut the net gearing ratio to 100 per cent by the end of 2019 and to 70 per cent by 2020.
More details in https://www.scmp.com/business/article/30...it-decline
* The country’s third-largest property developer reports its first profit decline since H1 2016
* Sales ease 7.4 per cent in the first half as cooling measures bite
Pearl Liu
Published: 6:56pm, 28 Aug, 2019
China Evergrande, the country’s third largest property developer by sales, posted a 45 per cent plunge in first-half core profit on Wednesday, becoming the first among the mainland’s top developers to report a decline in earnings.
The sharp fall in core earnings – its first drop since the first half of 2016 – came after the central government rolled out a slew of cooling measures to curb property price growth earlier this year.
Interim core profit came in at 30.35 billion yuan (US$4.2 billion), while revenue dropped 24.4 per cent to 226.98 billion yuan in the comparable period.
No interim dividend was recommended.
Contracted sales in the first six months eased 7.4 per cent year on year to 281.81 billion yuan, accounting for less than half the company’s 600 billion yuan annual sales target. For the six months to June, it said average selling price increased to a historical high of 10,756 yuan per square metre.
Despite the sales shortfall, the company said it was confident that it could achieve its annual sales target of 600 billion yuan.
“We can definitely meet the target as 74 million square metres will be put on sale in the next half,” said Xia Haijun, vice-chairman and president of China Evergrande. “If we manage to sell 40 per cent of this area, the sales target will be met.”
Evergrande’s net gearing ratio, a measure of equity to debt, stood at 152.1 per cent, up from 151.9 per cent at the end of 2018, up 24 percentage points from six months earlier, according to a company filing to the Hong Kong stock exchange.
Xia had pledged last year to cut the net gearing ratio to 100 per cent by the end of 2019 and to 70 per cent by 2020.
More details in https://www.scmp.com/business/article/30...it-decline
Specuvestor: Asset - Business - Structure.