Yanlord records H2 loss of 2 billion yuan; FY23 ‘exceptionally unusual’ with China’s real estate credit crisis, CEO says

CHINESE property developer Yanlord Land Group sank into the red with a net loss of two billion Chinese yuan (S$378.9 million) in the fiscal second half ended Dec 31, 2023, reversing from a net profit of 155.6 million yuan posted the same period a year ago. 

The group attributed this to a rise in fair value loss on investment properties, the write-down of completed properties for sale and properties under development for sale, and an increase in net impairment losses on financial assets.

The results translate to a loss per share of 1.054 yuan, against earnings per share of 0.0805 yuan in the year-ago period.

Revenue was up 64.6 per cent to 28.6 billion yuan, however, driven by higher average selling price per square metre. The group said it achieved this on the back of the delivery of a higher-priced project, Yanlord Arcadia in Shanghai.

Meanwhile, the cost of sales – which mainly included land, construction and capitalised borrowing costs – rose 79.1 per cent to 24.5 billion yuan in the half, from 13.7 billion yuan in the year-ago period.

Cost of sales included write-down of completed properties for sale and properties under development for sale of 1.453 billion yuan due to the estimated net realisable value was lower than the development costs for projects mainly in Shenzhen, Wuxi, Zhuhai and Chengdu, it noted.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

For the full year, the group’s revenue grew 51.1 per cent to 43.4 billion yuan, from 28.7 billion in FY22, as it noted that the gross floor area delivered to customers in FY23 was higher.

The projects delivered in FY23 were mainly Yanlord Arcadia, Yanlord Hub City and Riverbay Century Gardens in Nanjing and Moons Villa in Shanghai. They represent 49.8 per cent, 11.2 per cent, 8.4 per cent, and 6.4 per cent of the group’s gross revenue from sale of properties in FY23, respectively, the group stated.

Meanwhile, the group’s total debt fell 26.4 per cent to 33.4 billion yuan, with cash and cash equivalents of 13 billion yuan. Its net gearing ratio fell as well, by 7.8 percentage points to 46.7 per cent as at Dec 31, 2023, compared to the last financial year end.

Zhong Sheng Jian, Yanlord’s chairman and chief executive officer, said 2023 was “exceptionally unusual” as economic recovery remains a challenge, pointing out that China’s real estate-related credit crisis, which began in the third quarter of 2021, persisted through the year.

The country’s primary property sales have witnessed decline for two consecutive years now, falling by more than a third compared to their peak in 2021, he added.

In the year ahead, the group said, it will continue to launch new projects for pre-sales with its joint ventures and associates, in accordance with their development schedule.

The board did not propose a dividend for FY23. The company also did not pay out any dividends in FY22.

Shares of Yanlord closed at S$0.495, down 1 per cent or S$0.005 on Tuesday before the results’ release.