The Chinese real estate giant Evergrande lost 4,198 million euros in the first half

Evergrande has reported this Sunday net attributable losses of 33,012 million yuan (4,198 million euros) in the first half of 2023. It is one more sign of the crisis of the Chinese real estate giant, which last week filed for bankruptcy in United States. The company’s board of directors met this Sunday to approve the results of the first semester.

The group has been dragging financial problems for a few years and is still unable to meet its liabilities. This Sunday it indicated that at the end of June 2023, its total liabilities reached some 2.38 trillion yuan (303,752 million euros), 2.02% lower than the previous year, but around 25% more than at the end of the year. of 2020. Of this amount, 624,765 million yuan (85,701 million dollars or 79,463 million euros) correspond to loans.

The figures also reflect a 5.13% decrease in the value of the company’s total assets compared to the end of the year in 2022, standing at 1.74 trillion yuan (239,231 million dollars or 221,817 million euros).

In the first half of 2023, Evergrande had a turnover of 128,067 million yuan (32,084 million dollars or 28,529 million euros), which represents an increase of 43% compared to the same period of time in 2022. Apart from operating losses, Evergrande blamed A large part of its negative results is due to factors such as the return of land or the loss of value due to impairment of financial assets.

Evergrande assured in the document that it has “sufficient commercial operations.” The company noted that it is “prioritizing the stabilization of operations and the resolution of risks” and that it is “working with the maximum effort to guarantee the delivery of the properties.”

The promoter published last month with a considerable delay its accounts for the years 2021 and 2022, in which it recorded losses for an aggregate amount of 581,211 million yuan (about 72,500 million euros). Evergrande suffered losses of 476,095 million yuan (59,357 million euros) in 2021 and 105,116 million yuan (13,105 million euros) in 2022. The huge losses were due to the return of land, property amortization, loss of assets and financial costs. Despite declaring those huge red numbers, the auditors still do not trust their accounts.

Crisis

The problems of what was the largest Chinese housing developer are a reflection of the real estate crisis that has shaken China. Evergrande borrowed to grow and grow, but when sales slowed and financial conditions tightened it found itself with a gigantic liability that posed a systemic threat to the Chinese economy.

State support and negotiations to deal with its problems have allowed it to buy time and limit the impact, which has threatened to hit the financial sector. The company began to suffer problems in 2019 that worsened the following year as the Chinese government made it difficult to access the financing with which it had generated a huge ball of debt.

Evergrande entered a crisis definitively in 2021. The company defaulted for the first time on a dollar bonus payment in December of that year after months of uncertainty about its finances. In 2021 the company lost 90% of its value on the Hong Kong Stock Exchange, where it has been suspended from listing since the beginning of 2022. The Chinese real estate developer, the most indebted in the world, requested on Monday the resumption of listing of its shares . In a statement sent to the stock market on Friday, Evergrande stated that it had fulfilled all the requirements to lift the suspension of the listing of its shares, which had been in effect since March 21, 2022.

The difficulties of the largest developer triggered concern among analysts and investors about the Chinese real estate sector. This concern for the brick sector is still valid and is one of the main threats to the Chinese economy.

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