Country Garden Holdings Co. posted a record first-half loss, underscoring how China’s real estate slump has brought the property giant to the brink of a debt default.
(Bloomberg) — Country Garden Holdings Co. posted a record first-half loss, underscoring how China’s real estate slump has brought the property giant to the brink of a debt default.
The Foshan-based company posted a net loss of 48.9 billion yuan ($6.72 billion) in the six months ended June 30, compared with a profit of 612 million yuan a year earlier. The developer warned of the loss — the biggest since its 2007 listing in Hong Kong — earlier this month.
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Once the country’s biggest developer by sales, Country Garden is in a debt crisis that threatens to be worse than when peer China Evergrande Group defaulted because it has four times as many property projects. In the latest sign of its cash crunch, the company announced plans earlier Wednesday to pay down a loan by issuing $34 million of shares.
“With sales going downhill the earnings outlook is not going to have a significant turnaround,” Bloomberg Intelligence analyst Kristy Hung said before the results were published. “It’s going to suffer because of its exposure to lower cities where housing market sentiment is the weakest.”
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