China Vanke, the country's largest locally listed property developer, aims to achieve higher unit sales and revenue this year by improving the competitiveness of its products and cutting administrative expenses and operating costs by 20 per cent.
The company reported yesterday a 16.7 per cent fall in net profit to 4.03 billion yuan (HK$4.57 billion) for the year to last December, from 4.84 billion yuan in 2007. Sales rose 15.3 per cent to 38.6 billion yuan.
Vanke declared a final dividend of 5 fen per share, compared with 10 fen in 2007.
Executive vice-president Xiao Li said that excluding a write-down on the value of some projects, the company's earnings last year were similar to those of 2007.
Vanke took a 1.23 billion yuan charge to reflect the reduced value of 13 projects, cutting after-tax income by 920 million yuan.
'Housing prices in 2008 in major cities generally declined,' Vanke president Yu Liang said. 'As many projects to be booked in 2009 came from the sales in 2008, the gross margin of the housing industry is expected to drop sharply this year.'
Vanke cut the prices of homes it sold by an average of 10 to 15 per cent last year. The mainland developer also reduced the amount of floor space it completed by 33 per cent to 5.23 million square metres.
The company said in a statement it would continue to face challenges because of the uncertain economic climate, but it still hoped sales in terms of floor space would rise this year.
The developer plans to complete 6.19 million square metres of home building this year, a 17 per cent increase from last year.
Chairman Wang Shi said the slump in the mainland property market might have bottomed out. However, there could be declines in certain areas such as the eastern regions, he said.
Mr Wang said the Pearl River Delta market could see the bottom after having fallen for more than a year, while ruling out a slump in prices in northern China.
Vanke's sales in February rose 150 per cent from a year earlier to 3.9 billion yuan, said Ms Xiao.
The company said home sales rose 19 per cent in January from a year earlier, the first increase in eight months since Vanke trimmed prices.