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Virus creates US$7b impact on China Vanke's cashflow
THE novel coronavirus epidemic is hitting the cashflow of China Vanke.
This is thanks to a drop of 51 billion yuan (S$10.44 billion) in sales in February and March from a year ago, the nation's second-largest property developer by sales said on Wednesday.
Official data showed that property investment in China fell at its fastest pace on record in the first two months of the year, as home sales, construction and other economic activity all nosedived because of the Covid-19 virus.
The developer said it faced pressure to deliver 10,000 units to home buyers in the first quarter after a halt in construction this year.
It expects 90 per cent of work to resume by the end of March, up from 80 per cent now.
''We hope to catch up on sales in the later days,'' president and chief executive officer Zhu Jiusheng told an analyst conference.
''The previously suppressed purchase demand will be released (into the market), but the speed at which it will do that is still uncertain,'' he said.
Customer visits have recovered to half of January levels, he added.
Vanke has reported February sales of 28 billion yuan, or a drop of 15.2 billion yuan from a year ago; there are signs that the March decline could be as much as 36 billion yuan.
On Tuesday, the firm reported a core profit of 38.3 billion yuan in 2019, up 14.4 per cent from a year ago.
It cut its dividend payout ratio to around 30 per cent, from 35 per cent in 2018. REUTERS