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Chinese property developer CIFI warns of US$2 billion loss for 2022, as the cash-strapped firm formulates plan to repay defaulted offshore debt
- Shanghai-based CIFI said that it expected a loss ranging from US$1.87 billion to US$2.02 billion for 2022
- The shortfall was mainly attributed to a decline in the number of properties delivered and increased impairment provision for property projects
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Yujie Xuein Shenzhen
Cash-strapped Chinese property developer CIFI Holdings (Group) Co has warned of a US$2 billion loss for last year, saying the industry’s debt crisis and housing market slump led to a substantial decrease in its business.
Shanghai-based CIFI said that it expected a loss ranging from 13 billion yuan to 14 billion yuan (US$1.87 billion to US$2.02 billion) for 2022, according to the company’s filing with the Hong Kong stock exchange late on Friday.
It estimated core net losses attributable to equity owners to range from 5.1 billion yuan to 5.6 billion yuan during the same period, compared to a core net profit of 7.28 billion yuan in 2021.
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The expected shortfall was mainly attributed to a decline in the number of properties delivered and increased impairment provision for property projects, which were both “affected by the overall unfavourable business environment of the real estate industry and the pandemic” last year, according to the company’s filing. It also chalked up the deficit to the yuan’s depreciation and fair value loss recorded from investment properties.
CIFI’s profit warning reflected the predicament afflicting one of China’s most important industries – the property sector represents around 25 per cent of the country’s total gross domestic product – which prompted Beijing to push a sweeping rescue package to bail out a market mired in a record slowdown and deep liquidity crunch.
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