Evergrande Group Photo: CFP

China's real estate developer Evergrande Group reported on Monday overdue financial reports for the past two years, which revealed that the debt-beleaguered property giant has incurred heavy losses, though it endeavored to increase capital liquidity including a proposed offshore debt restructuring plan.

Evergrande posted a net loss of 686.2 billion yuan ($95.7 billion) in 2021, and 125.8 billion yuan of loss in 2022, or combined losses of $812 billion yuan during the past two years, according to the filing it sent to the Hong Kong Stock Exchange.

Its shares have remained suspended for about 16 months.

The steep losses were mainly caused by return of land, losses on company financial assets and other woes, the company said in the annual report.

Its total liabilities reached 2.4 trillion yuan at the end of last year, up 23 percent from 2020.

"The company's large and quality land reserves provide solid support to ensure the delivery of properties, gradual settlement of its debts, and resumption of normal operations," Evergrande said in a statement.

As of the end of 2022, Evergrande-owned land reserves equal to 210 million square meters.

Meanwhile, the company has been making some progress on the offshore debt restructuring plan which it proposed in March this year. 

"The company and its financial and legal advisers are actively finalizing documentation for a proposal with a group of offshore bonds holders and their advisers, and expect to apply to the courts of the relevant jurisdictions in late July 2023 for the advancement of relevant arrangements," the company noted.

Looking forward, the property giant said it will ramp up efforts to ensure the steady and orderly advancement of key tasks such as delivery of housing projects, operation of its new-energy vehicle project, and exploration of the efficient disposal and utilization of its core assets the help resolve the risks.

China's real estate market has been on a downward spiral since the second half of 2021 when the country's property prices and home sales both experienced a sharp drop, with many developers facing liquidity woes and deteriorating balance sheets.

Investment in real estate in 2022 fell 10 percent from 2021. Property sales slumped by 26.8 percent, data from the National Bureau of Statistics (NBS) showed.

The weak momentum of the property sector continued in the first half with investment falling 7.9 percent year-on-year to 5.86 trillion yuan, according to latest NBS data released on Monday.

China's property sector is shifting from high-speed growth to steady development over the medium and longer term, Fu Linghui, a NBS spokesperson, told a press conference on Monday.

Property investment will remain "relatively low" but it will gradually return to a reasonable level following the market adjustments, Fu said.

The recovery path of domestic property market is bumpy yet the sector is navigating in a right direction, Wanlian Securities said in a note, betting the industry will still receive policy support along the path of economic rebound in the country.

It estimated that the second half of the year may see an increase in the number of property transactions. 

Global Times