Published by Global Banking & Finance Review®
Posted on January 14, 2025
4 min readLast updated: January 27, 2026
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Country Garden reports a record 2023 loss due to China's property slump. The developer aims to narrow losses in 2024 amid ongoing financial challenges.
By Clare Jim
HONG KONG (Reuters) -Country Garden said it expected to post a narrower annual loss in 2024 as the embattled developer looks to revive its business and stave off a liquidation lawsuit after reporting a record 178.4 billion yuan ($24.33 billion) loss in 2023.
The 2023 loss announced in long-overdue accounts late on Tuesday included more than $11 billion of impairments on the value of inventory as an unprecedented property market downturn in China weighed on homebuyer sentiment.
Country Garden and a string of other developers including China Evergrande and Sunac China defaulted on debt repayment obligations over the last three years, triggering a destabilising crisis in the economically-crucial property sector and forcing Beijing to announce support measures.
Once China's top developer by sales, Country Garden's hope of narrowing its losses is in line with many peers that have also defaulted on debt, as they booked most provisions in the first couple years of the crisis and slashed expenses, offsetting revenue declines to some extent.
"Thanks to relatively big provisions in 2023, the inventory that needed additional provisions have largely decreased; we expect the full-year loss in 2024 will significantly narrow," Country Garden said in a separate statement.
The sour property sector outlook, however, will continue to cloud over the financial performance of cash-strapped developers in the near-term, with some economists expecting national sales to drop around 5% in 2025.
The decline this year would come on top of an almost 50% fall in property sales in China over the past three years, according to government data.
Guangdong province-based Country Garden, which defaulted on $11 billion of offshore bonds in late 2023, had delayed the publication of its 2023 full-year and 2024 interim reports. As a result, its Hong Kong shares have been suspended from trading since April 2, 2024.
After the accounts were released, the developer said its Hong Kong-listed shares would remain suspended from trading until further notice. It did not provide further details.
The publication of Country Garden's results and an offshore debt restructuring update last week are linked to its efforts to fend off a liquidation petition filed by a creditor in a Hong Kong court relating to its non-payment of a $205 million loan.
It reported a net loss of 12.8 billion yuan, or $1.75 billion, in the first six months of 2024, following 2023's record net loss. Most rival developers also reported a loss or declining profit in 2023.
The interim loss last year has, however, narrowed from a 48.9 billion yuan net loss a year ago, while the annual figure compared to a 2022 net loss of 6.1 billion yuan, and a 26.8 billion yuan net profit in 2021.
"The path to returning to profit or restoring cashflow is still very long," said Thomas Kwok, head of equity business of CHIEF Securities. "It will very much depend on the homebuying power in the country but China's economy is slowing."
Country Garden's 2024 full-year accounts are due by the end of March.
INVENTORY PROVISIONS SHRINK
Country Garden had interest-bearing debt of 250.2 billion yuan as of end-June last year, while its cash and cash equivalents stood at 6.7 billion yuan, its financial filing showed.
The provision on inventory in the first six months of last year was 2.7 billion yuan, compared to 82.4 billion yuan, or $11.2 billion, for the full year in 2023.
Country Garden said it still has 200,000 apartments yet to complete construction after delivering 1.7 million homes to buyers in the past three years. It had 3,059 projects under development across the country as of June 2024.
Country Garden's annual sales by value dropped more than 70% last year, sending its national ranking down to 16 from 7 in 2023, according to a survey by real estate researcher CRIC.
Country Garden said it has proposed to creditors a debt restructuring that would cut its offshore debt worth $16.4 billion by 70%, and it had reached an "understanding" with a lender group.
The next liquidation hearing will be held on Jan. 20.
($1 = 7.3311 Chinese yuan renminbi)
(Reporting by Clare Jim; Editing by Sumeet Chatterjee and Jamie Freed)
Country Garden reported a net loss of 12.8 billion yuan, or $1.75 billion, in the first six months of 2024, following a record net loss in 2023.
The unprecedented property market downturn in China and the default on debt repayment obligations by Country Garden and other developers have triggered a destabilizing crisis in the economy.
Country Garden has proposed a debt restructuring that aims to cut its offshore debt worth $16.4 billion by 70% and has reached an understanding with a lender group.
Country Garden's provision on inventory in the first six months of last year was 2.7 billion yuan, significantly lower than the 82.4 billion yuan for the full year in 2023, indicating a decrease in additional provisions needed.
Country Garden's 2024 full-year accounts are due by the end of March.
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