Evergrande, the troubled Chinese property giant that defaulted on its debts in late 2021, has reported a combined loss of 581.9 billion yuan ($81.1 billion) for 2021 and 2022. The long-overdue earnings report was released to investors in Hong Kong.
The company, burdened by an estimated $300 billion of debts, has been severely impacted by the property market crisis in the world’s second-largest economy. In its filing to the Hong Kong Stock Exchange, Evergrande disclosed a loss of 476 billion yuan in 2021 and 105.9 billion yuan in 2022, accompanied by a significant decline in revenue over the two-year period.
These substantial losses can be attributed to various factors, including the depreciating value of properties and other assets, as well as higher borrowing costs. Once China’s top-selling property developer, Evergrande’s shares have been suspended from trading since March 2021.
The Chinese real estate industry faced significant disruption when new borrowing restrictions for large real estate firms were introduced in 2020. Evergrande’s troubles further escalated in 2021 when the company missed a crucial repayment deadline for approximately $1.2 billion of international loans.
The financial turmoil experienced by Evergrande has had a ripple effect across the Chinese property industry, leading to other developers defaulting on their debts and leaving numerous unfinished building projects throughout the country. Earlier this year, Evergrande revealed plans to restructure around $20 billion of its overseas debt.
Over the past 15 years, Evergrande expanded aggressively into various sectors, including sports, entertainment, and electric car manufacturing. In 2010, the company acquired Guangzhou FC and renamed it Guangzhou Evergrande Taobao FC, achieving significant success in the Chinese Super League. However, the club’s fortunes declined, and it was eventually relegated from the Super League, coinciding with Evergrande’s shelved plans for a $1.8 billion stadium. The club has since reverted to its previous name, Guangzhou FC.
