China Evergrande Group, the world’s most indebted developer, reported a significantly reduced net loss for the first half of the year. The company attributed this improvement to the absence of impairment losses on investments.
According to the company’s announcement on Sunday, its net loss for the period ending in June was 33.01 billion yuan ($4.53 billion), compared to a loss of CNY 66.35 billion the previous year. Meanwhile, revenue increased to CNY 128.18 billion, up from CNY 89.28 billion in the same period in 2022. This boost in revenue was mainly attributed to higher contributions from its property development business.
Notably, impairment losses on financial assets amounted to only CNY 643.0 million, significantly lower than the CNY 8.19 billion loss incurred in the first half of 2022. Furthermore, impairment losses on investments using the equity method were nil for the first half of 2023, compared to CNY 18.03 billion in the previous year.
The Chinese government’s crackdown on leverage in the property sector in 2021 had a negative impact on real estate developers, leading to decreased home sales and limited access to debt markets. Evergrande, overwhelmed by cash-flow problems, eventually defaulted on debt payments and struggled to pay its contractors and suppliers.
As of the end of June, Evergrande’s total liabilities amounted to CNY 2.39 trillion. The company has expressed its commitment to expedite the restructuring of offshore debts in order to protect the long-term interests of its creditors.
In recent developments, Evergrande has sought approval from a U.S. court to restructure more than $19 billion of its offshore debts as part of its extensive debt restructuring plans.
The company also announced that its shares, which have been suspended from trading since March 21 last year, will resume trading on the Hong Kong stock exchange from August 28.
