NWD to report US$2.4 billion loss in past financial year amid property sector woes

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A non-cash impairment loss of up to HK$9.5 billion will not have any impact on its core operating profit or operating cash flow, NWD said

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New World Development’s latest earnings guidance reflects the property sector’s struggles, as a downturn persists in the residential markets of Hong Kong and the mainland. Photo: Shutterstock

Zhang Shidongin Shanghai

Published: 5:34pm, 31 Aug 2024Updated: 7:15pm, 31 Aug 2024

New World Development (NWD), controlled by one of Hong Kong’s richest families, looks set to report a loss for its financial year ending June, as property market woes continue to beset the city and the Chinese mainland.

According to its statement to the Hong Kong stock exchange on Friday, NWD said it expects to record a loss attributable to shareholders of the company that range from HK$19 billion (US$2.4 billion) to HK$20 billion for the 12 months ended June 30.

That preliminary estimate stems from the lack of revenue recognition of major projects – such as Pavilia Farm I and II – completed and handed over in the previous financial year, a revaluation or impairment loss on investment and development properties and goodwill, loss recognised on the disposal of its shares in NWS Holdings, together with the continuous interest rate hikes experienced during the year as well as the depreciation of yuan, according to the statement.

The developer also said that it may record core operating profit from continuing operations of between HK$6.5 billion to HK$6.9 billion, representing a year-on-year decrease of 18 per cent to 23 per cent.

In its statement, NWD pointed out that it suffered from a non-cash impairment loss of as much as HK$9.5 billion owing to a reassessment of its investment and development properties in the past financial year.