Property developer Country Garden warns first-half core net profit could plunge 70% on year
Property developer Country Garden warns first-half core net profit could plunge 70% on year

Property developer Country Garden warns first-half core net profit could plunge 70% on year

 

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Country Garden, the largest property developer by sales in China, on Thursday issued a profit warning, saying that the company is expected to record a core net profit ranging from approximately 4.5 billion yuan to 5 billion yuan for the first half of the year, representing a year-on-year drop of 67.1% – 70.4%, and the net profit attributable to shareholders is expected to range from about 200 million yuan to 1 billion yuan for the half-year ended 30 June 2022, slumping 93.3% – 98.7% from a year earlier.

The expected decline in profit was mainly attributable to fewer property sales and revenue due to the severe operation environment for the real estate sector, the long-last impact of the Covid-19 outbreaks, the downtrend in the housing market and slowing pace of project construction.

In addition, the declines were also due to that some projects with low profit margin has been during the period, leading to declines in the gross profit margin on the real estate business; the company increased provisions for property project write-downs out of prudence; and losses caused by fluctuation in foreign exchange rates, it said.

However, Country Garden noted that its business operation is normal and its has sufficient available cash.