Country Garden Flags Going-Concern Uncertainty After Swing to $6.7 Billion Loss Amid Property Slump

By Kosaku Narioka

Country Garden Holdings said Wednesday that there is some uncertainty over its ability to continue as a going concern as it posted net loss for the first half of 2023 after writing down the value of property projects amid a slump in the Chinese real-estate market.

The Chinese property developer said its net loss was 48.93 billion Chinese yuan ($6.72 billion) for the six-month period ended June 30 compared with a net profit of CNY612 million in the year-earlier period.

While revenue rose 39% from a year earlier to CNY226.31 billion, the developer booked a net write-down of properties of about CNY40.34 billion partly due to weakness in the real estate market.

Country Garden has said it is aiming to resolve liquidity pressure and is considering adopting debt-management steps to safeguard interests of stakeholders.

The developer said whether the company would be able to continue as a going concern would depend on progress and completion of such debt management measures and timely refinancing of its existing borrowings upon maturity, among other things. Country Garden said its directors believed that the company would be able to meet its financial obligations over the next year after reviewing the future liquidity and performance of the company.

Net gearing ratio, measured by net debt over total equity, rose 50.1% at the end of June from 40.0% at the end of December. The company's cash and cash equivalents fell to CNY101.115 billion at the end of June from CNY128.28 billion at the end of 2022.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

August 30, 2023 12:59 ET (16:59 GMT)

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