Evergrande Posts Long-Delayed Results, Revealing Two-Year Loss of $81B

China Evergrande on Monday posted its long-awaited financial results for 2021 and 2022, with the world’s most indebted developer disclosing hefty but narrowing annual losses and paving the way for a potential resumption of trading in its suspended shares.

Evergrande recorded a 2022 loss attributable to shareholders of RMB 105.9 billion ($14.8 billion), a sharp improvement on a RMB 476 billion ($66.4 billion) loss suffered in 2021, the Shenzhen-based builder said in a filing with the Hong Kong stock exchange.

Evergrande’s 2022 revenue fell 8 percent year-on-year to RMB 230.1 billion as the group eked out a gross profit of RMB 25 billion and delivered properties of 724 projects during the 12-month period.

Total liabilities on Evergrande’s balance sheet towered at RMB 2.44 trillion ($340 billion) as of the end of 2022, against total assets of RMB 1.84 trillion and negative equity of RMB 599 billion. The developer’s contracted sales for the year, which was marred by COVID-19 curbs throughout China, totalled RMB 31.7 billion, down 91 percent from 2021 levels.

Attention Turns to Restructuring

In the filing, chairman Xu Jiayin said Evergrande would focus on “key tasks” like the delivery of properties, the continuous operation of the group’s electric car and property services divisions, and efficient disposal and effective utilisation of core assets.

The group’s immediate priority is finalising the restructuring of a $22.7 billion offshore debt load after securing agreements from holders of $19.1 billion worth of bonds in April. Xu said Monday that Evergrande expects to apply to Hong Kong and Cayman Islands courts in late July for the advancement of the so-called schemes of arrangement with creditors.

Evergrande is also contending with a winding-up petition filed last year by an investor in the developer’s Fangchebao online platform over a share-repurchase dispute. After several adjournments, the hearing for the petition is scheduled for 31 July.

The company announced plans to hold an annual general meeting — its first since June 2021 — at which the Evergrande board’s directors will retire and offer themselves for re-election.

Trading Hurdle Cleared

With the publication of its annual reports, Evergrande looks set to mimic fellow Shenzhen developer Kaisa Group Holdings, whose stock resumed Hong Kong trading in March after the release of the company’s overdue 2021 results.

In April, Sunac China Holdings’ HKEX-listed shares began trading again after a 12-month suspension following the release of the developer’s annual reports for 2021 and 2022.

Evergrande said Monday that trading in the company’s shares would remain suspended until further notice.