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HONG KONG, March 26 (Reuters) – China Evergrande Group, the country's third-largest real estate developer, said its core earnings in 2018 jumped 93.3 percent from a year earlier. , reaching a record level, delivering more buildings and reducing costs.
Its main profit, which excludes remeasurement gains and non-recurring items, amounted to 78.32 billion yuan (11.67 billion US dollars).
Net profit rose 53.4 percent to 37.4 billion yuan, while revenue rose 49.9 percent to 466.2 billion yuan.
"The board strongly believes that the new economy and the modernization of consumption in China will generate benefits both domestically and abroad in a broader sense. The stable and sustainable development of the Chinese economy will allow a solid and steady development of the real estate sector, "said the company in a statement.
The group's net badets increased by 27.4% at the end of 2018 to reach 308.63 billion yuan over the previous year. Its net debt ratio decreased by 31.8 percentage points to 151.9%, while the total amount of loans decreased by 59.5 billion yuan, or 8.1%.
In August 2017, the developer, which had one of the highest debt ratios in the industry and one of the highest levels of debt in China at the time , was committed to reducing its net debt ratio to about 70% by June 2020, up from 240% in June. 2017
Its record annual result comes as major Chinese developers such as China Vanke and Country Garden Holdings also posted record annual profits.
Analysts believe, however, that earnings growth in the sector may slow down in the second half, as more expensive land costs reduce margins due to slower domestic sales.
China's real estate sales by surface area fell 3.6% year-over-year in the first two months of 2019, while new home prices rose at their lowest pace in 10 months in February, as a sign of slowing demand as economic conditions slowed. ($ 1 = 6.7137 Chinese yuan) (report by Clare Jim and Twinnie Siu, edition of James Pomfret and Gopakumar Warrier)
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