Evergrande has been hit by the property crisis that has rocked the world’s second largest economy over the past two years
The Evergrande Mingdu residential complex, owned by Evergrande Group, is seen in Huai ‘an, Jiangsu province, China, December 3, 2022. © CFOTO / Future Publishing via Getty Images
China Evergrande Group posted a combined loss of $81 billion over two years, its long-delayed results report published on Monday reveals.
The world’s most indebted property developer defaulted in late 2021 and has been struggling to complete projects and repay suppliers and lenders. In March, Evergrande announced one of the country’s biggest debt restructuring programs and is now gathering support to complete the process.
Evergrande’s net losses for 2021 and 2022 amounted to 476 billion yuan ($66.36 billion) and 105.9 billion yuan, respectively, as a result of write-downs of properties, return of lands, losses on financial assets, and financing costs, the company said.
Market experts were not optimistic about Evergrande’s prospects.
“Results are meaningless if the business model is broken,” Charles Macgregor, the head of Asia at Lucror Analytics, said.
The results highlight the scale of the problems the country’s major property developer has faced amid a housing crisis that has rocked the Chinese economy over the past two years. Evergrande’s debt crunch has rippled through China’s property sector, triggering a string of defaults with abandoned property projects seen across the country.
READ MORE: UK faces major mortgage crisis
The earnings marked the company’s first two full-year losses since Evergrande’s listing in 2009. The developer’s shares listed in Hong Kong have been halted from trading since last March, pending the 2021 and 2022 financial results, and their trading will remain suspended, Evergrande said on Monday. The company risks being delisted if its shares remain suspended for 18 months.
For more stories on economy & finance visit RT’s business section
