New World Development posts HK$16.3 billion loss as woes persist
[HONG KONG] New World Development posted a second straight year of losses as debt pressures and a weak property market took a toll on the distressed Hong Kong builder.
The developer controlled by the billionaire Cheng family lost HK$16.3 billion (S$2.7 billion) from continuing operations in the year ended Jun 30, mainly due to one-time impairment provisions and losses, according to a filing to the Hong Kong stock exchange Friday (Sep 26). That is steeper than the HK$11.8 billion loss a year earlier.
The results cap another tumultuous year for the property firm, which has been trying to alleviate a liquidity crunch during the real estate slump.
After securing an US$11 billion refinancing deal earlier this year, New World said this week that it obtained a separate loan of HK$3.95 billion, which was 75 per cent less than the upper end of its original target. The company is also in talks with firms including Blackstone for a capital injection.
The residential sectors in Hong Kong and mainland China – where New World sells homes – remain sluggish. Home values in Hong Kong have yet to recover after falling almost 30 per cent from their peak in 2021, while China’s housing crisis has dragged on for more than four years with no end in sight.
On top of that, a weak commercial real estate market is suppressing the value of New World’s assets as it seeks to raise cash from disposals. Prices of office units and retail space have slumped by 48 per cent and 41 per cent respectively from their 2018 highs, according to government data.
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Considered one of the Big Four developers in Hong Kong, New World has faced a slew of challenges in the past year from mounting debts to frequent management changes after the sudden departure of heir Adrian Cheng in September 2024. BLOOMBERG
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