China Evergrande 2017 core profit almost doubled

Hong Kong

CHINA Evergrande Group, the nation's third-biggest property developer by sales, on Monday said 2017 core profit surged 95 per cent to a record high, boosted by the sale of more apartments and the redemption of high-interest perpetual bonds.

Core profit, which excludes revaluation gains, was 40.51 billion yuan (S$8.46 billion) for the full year, beating a consensus forecast of 27.26 billion yuan from 18 analysts polled by Thomson Reuters SmartEstimate.

Many major property developers are widely expected to book best-ever profits for 2017 on record sales, as industry consolidation brought economies of scale that helped developers minimise the impact of government measures that were aimed at slowing the rate of property price rises.

Evergrande said net profit surged 110 per cent to 37 billion yuan, while revenue increased 47 per cent to 311 billion yuan.

Total borrowings rose 37 per cent to 732.6 billion yuan.

Evergrande, which has pledged to slash debt by 2020, said its net gearing ratio dropped to 184 per cent from 432 per cent a year earlier.

"The group, through a series of capital markets transactions, improved its offshore debt structure, extended its maturity profile and reduced financing costs," Evergrande said in a statement to the Hong Kong stock exchange.

The developer is currently planning a "backdoor listing" in China, where valuations are usually higher than in Hong Kong, by injecting almost all of its property assets held by Hengda Real Estate Group into Shenzhen Real Estate .

The company raised 130 billion yuan through three rounds of fundraising last year from strategic investors, who will hold about 36.5 per cent of the enlarged equity interest of Hengda.

The company's stock was the biggest winner in the industry last year, surging 460 per cent in response to the widely-expected backdoor listing, fresh capital from strategic investors, and share buybacks. REUTERS