China’s Evergrande delays release of earnings report amid debt troubles
Published: Mar 22, 2022 10:28 PM
Evergrande Group Photo: CFP

Evergrande Group Photo: CFP

Debt-stricken real estate developer China Evergrande Group said it won't be able to publish its audited results for last year on or before March 31 as required by the listing rules, citing "drastic changes in the operational environment" since the second half of last year, according to a filing with the Hong Kong Stock Exchange on Tuesday.

"The auditor has added a large number of additional audit procedures this year, which, coupled with the effect of the COVID-19 outbreak and based on the information currently available to the company, means the company will not be able to complete the audit procedures on time," Evergrande said.

The company will publish the audited annual results "as soon as practicable" after the audit procedures have been completed, it noted. The trading suspension will remain in force until it publishes the results.

Evergrande's two Hong Kong-listed units - China Evergrande New Energy Vehicle Group and Evergrande Property Services Group - also announced on Tuesday that their results would be delayed.

Shares of the three companies were suspended on Monday.

In a separate filing, Evergrande Property Services said that deposits of approximately 13.4 billion yuan ($2.1 billion) as security for third-party pledge guarantees had been enforced by the relevant banks. 

The property management firm will establish an independent investigation committee and arrange for experts to be appointed to investigate the pledge guarantees.

Evergrande, which has over $300 billion in liabilities, has sought to accelerate the pace of its project resumption while struggling to contain the debt crisis. 

It planned to deliver 600,000 new homes in 2022, covering 70 million square meters of construction site, which is equivalent to nearly 50 percent of its guaranteed delivery projects within the calendar year. The developer delivered 37,899 new homes to buyers in December.

At least five developers have announced plans to delay the release of their financial results, mainly due to disruptions caused by the COVID-19 pandemic, which have caused problems for auditors.

Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Tuesday that real estate developers should integrate more with the nation's support policies on real estate and make it clear to investors that the environment is likely to improve. 

"It should be emphasized that although these businesses have difficulties, they are operating steadily, which is conducive to helping businesses create a better environment," Yan said.