China Evergrande Group has recently released its long-delayed earnings report, revealing a staggering combined loss of $81 billion. The company’s financial performance has taken a significant hit, as highlighted in the report published late on Monday.
In 2021, the world’s most heavily indebted property developer, Evergrande, experienced a significant financial crisis, leading to default. To address its mounting debt, the company announced a restructuring program for its offshore debts in March. Evergrande faced difficulties in completing projects, repaying suppliers and lenders, resulting in substantial losses.
The company reported net losses of 476 billion yuan ($66.36 billion) in 2021 and 105.9 billion yuan ($14.76 billion) in 2022. These losses were primarily due to write-downs of properties, returning of lands, financial asset losses, and financing costs. In contrast, in its last successful year of operation, 2020, Evergrande recorded a net profit of 8.1 billion yuan.
The immense debt burden carried by Evergrande in recent years has raised serious concerns about the stability of China’s property sector, which is a cornerstone of the country’s economy. Defaults and abandoned property projects have been observed nationwide, exacerbating the apprehensions surrounding the situation.