HONG KONG (Reuters) -China's largest private property developer Country Garden on Wednesday reported a record loss in the first half of 2023, as real-estate woes drag on the world's second largest economy.
The developer said its net loss between January and June of this year amounted to 48.9 billion yuan ($6.72 billion), versus a 6.7 billion yuan net loss in the second half of 2022, and a 612 million yuan net profit in the first half of 2022.
The results come as Chinese authorities take steps to revive the troubled property market, which accounts for roughly a quarter of the economy. The sector's woes have raised concerns that it could have a destabilising impact on an economy already weakened by rising unemployment and falling demand.
The liquidity stress in the company became public this month after it missed two dollar-coupon payments and sought to extend an onshore private bond repayment, deepening contagion fears in China's struggling property sector and the wider economy.
Country Garden said its revenue in the first half rose 40% from a year ago but its cost of sale surged 73%, while total liabilities were unchanged from the end of 2022, at 1.4 trillion yuan.
Country Garden shares closed down 3.3% to HK$0.88 before the earnings announcement.
Early on Wednesday, Country Garden said it would issue HK$270 million ($34.4 million) worth of new shares to an investment unit of Hong Kong-based manufacturer Kingboard Holdings, which would reduce its outstanding loan to the unit to HK$1.6 billion.
The company said the issue would help "preserve cash resources... and reduce the gearing level." The new shares, representing 1.25% of the enlarged share capital, would be issued at HK$0.77 each, a 15.4% discount from Tuesday's closing price.
($1 = 7.2810 Chinese yuan renminbi)
(Reporting by Clare Jim; Editing by Tomasz Janowski and Andy Sullivan)
