(Reuters) -Hong Kong-based property developer New World Development said on Friday it expects to swing to a loss of up to HK$6.80 billion ($875.07 million) for the first half of fiscal 2025 on lower expected realizable prices for its properties.
China’s property sector has been battling declining demand, with official data on Wednesday indicating that new home prices stalled in January despite continued government efforts to prop up sentiment.
New World now expects a loss attributable between HK$6.60 billion and HK$6.80 billion from its continuing operations for the first half of fiscal 2025.
That compares to a profit attributable of HK$502 million recorded in the previous corresponding period.
The company forecast an impairment loss for its development properties and a decrease in fair value on its investment properties, totalling around HK$4.70 billion to HK$5.10 billion for the first half of fiscal 2025.
However, it expects a core operating profit from continuing operations between HK$4.35 billion and HK$4.55 billion for the period, representing a decrease of 15% to 19% from a year earlier, according to its statement.
The embattled property developer, owned by the billionaire Cheng family, had speculations arise last month as Bloomberg reported on a potential bond default, even though the company said it “continues business as usual”.
The company is also conducting ongoing negotiations for the potential sale of its shopping centre, K11 Art Mall, in a possible bid to raise funds.
The firm has been struggling with governance issues as a surprise exit in September by former chief executive officer Adrian Cheng, the third-generation scion of the founding family, was followed by another CEO replacement in November.
($1 = 7.7708 Hong Kong dollars)
(Reporting by Shivangi Lahiri in Bengaluru; Editing by Shreya Biswas)
