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By Clare Jim
HONG KONG (Reuters) -Country Garden said it expected to post a narrower annual loss in 2024 as the embattled developer looks to revive its business and stave off a liquidation lawsuit after reporting a record 178.4 billion yuan ($24.33 billion) loss in 2023.
The 2023 loss announced in long-overdue accounts late on Tuesday included more than $11 billion of impairments on the value of inventory as an unprecedented property market downturn in China weighed on homebuyer sentiment.
Country Garden and a string of other developers including China Evergrande and Sunac China defaulted on debt repayment obligations over the last three years, triggering a destabilising crisis in the economically-crucial property sector and forcing Beijing to announce support measures.
Once China's top developer by sales, Country Garden's hope of narrowing its losses is in line with many peers that have also defaulted on debt, as they booked most provisions in the first couple years of the crisis and slashed expenses, offsetting revenue declines to some extent.
"Thanks to relatively big provisions in 2023, the inventory that needed additional provisions have largely decreased; we expect the full-year loss in 2024 will significantly narrow," Country Garden said in a separate statement.
The sour property sector outlook, however, will continue to cloud over the financial performance of cash-strapped developers in the near-term, with some economists expecting national sales to drop around 5% in 2025.
The decline this year would come on top of an almost 50% fall in property sales in China over the past three years, according to government data.
Guangdong province-based Country Garden, which defaulted on $11 billion of offshore bonds in late 2023, had delayed the publication of its 2023 full-year and 2024 interim reports. As a result, its Hong Kong shares have been suspended from trading since April 2, 2024.
After the accounts were released, the developer said its Hong Kong-listed shares would remain suspended from trading until further notice. It did not provide further details.
The publication of Country Garden's results and an offshore debt restructuring update last week are linked to its efforts to fend off a liquidation petition filed by a creditor in a Hong Kong court relating to its non-payment of a $205 million loan.
It reported a net loss of 12.8 billion yuan, or $1.75 billion, in the first six months of 2024, following 2023's record net loss. Most rival developers also reported a loss or declining profit in 2023.