Evergrande Group, known for being the real estate developer with the highest debt globally, has announced a significant reduction in its net losses during the first half of this year. This improvement is attributed to a surge in revenue fueled by the earlier-year surge in the property market.
When trading resumed after a 17-month suspension, the company’s shares experienced a sharp decline of 87% during Monday’s opening session.
In a filing made to the Hong Kong stock exchange on Sunday, Evergrande revealed that its net losses attributable to shareholders stood at 33 billion yuan ($4.5 billion) for the period spanning from January to June. This marked a 50% decrease from the 66.4 billion yuan ($9.1 billion) loss reported in the same timeframe the previous year. Notably, the company’s revenue saw a substantial increase of 44% compared to a year ago, reaching a total of 128.2 billion yuan ($17.6 billion).
Evergrande stated that it had proactively prepared for the revival of sales and successfully capitalized on the short-lived property market upswing that manifested at the year’s outset. While the Shenzhen-based company had long been one of China’s major property developers in terms of sales, its ambitious expansion had relied heavily on borrowed funds. This eventually led to a debt default in 2021, triggering a crisis within China’s real estate sector—an industry accounting for up to 30% of the nation’s economy. In recent times, the company even sought bankruptcy protection in the United States.
