Chinese Evergrande Halves Loss in First Half of 2023

Chinese construction company Evergrande Group reported on Sunday that its net loss in the first half of 2023 was halved compared to the same period last year, attributing this to an increase in revenue.

The world’s most indebted entrepreneur in the real estate sector recorded a loss of 33 billion Chinese yuan (4.53 billion dollars) in the first six months of this year, compared to a loss of 66.4 billion yuan in the same period a year earlier.

The Chinese construction entrepreneur is at the center of the crisis in the Chinese real estate sector, which has faced a wave of defaults, unfinished properties, and unpaid suppliers since the end of 2021, shaking consumer confidence in the world’s second-largest economy, Reuters reminds us.

Evergrande announced that its revenue in the first half of the year increased by 44 percent compared to the previous year, reaching 128.2 billion yuan, as it ‘actively planned to continue sales and successfully capitalized on the brief real estate market boom that emerged at the beginning of the year.’ Cash decreased by 6.3 percent to 13.4 billion yuan.

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

Last month, in a rather delayed business report announcement, Evergrande reported a total net loss of 81 billion dollars for 2021 and 2022, compared to a profit of 8.1 billion yuan in 2020.

As with the previous two annual financial reports of Evergrande, the auditor Prism Hong Kong and Shanghai did not provide a conclusion on this report, citing multiple uncertainties related to the business as a constant source of concern, including future cash flow.

Evergrande stated that its ability to continue will depend on the successful implementation of the foreign debt restructuring plan and successful negotiations with other creditors regarding the extension of repayment terms. Earlier this month, it filed for bankruptcy protection in the U.S. as part of one of the largest debt restructuring processes in the world.

Courts in Hong Kong and the Cayman Islands will decide in early September whether to approve the foreign debt restructuring plan, which includes instruments worth 31.7 billion dollars, including bonds, collateral, and other obligations. Creditors voted on this plan last week, and the entrepreneur has yet to announce the results.

The price of Evergrande’s shares plummeted on Monday on Chinese exchanges, the first day of trading for that stock since March of last year, when it had been suspended, by more than 80 percent.