FILE PHOTO: A general view of developer New World Development's office tower, K11 Atelier King's Road, in North Point of Hong Kong, China February 2, 2023. REUTERS/Clare Jim/File photo
HONG KONG: Shares of New World Development, a major property developer in Hong Kong, plunged 14% after it estimated a net loss of as much as HK$20 billion ($2.6 billion) for the financial year ended in June.
The shares fell to HK$6.74 in early trading, marking a fresh 21-year low.
The company said in a filing on Friday that it expected a drop of as much as 23% in core operating profit from continuing operations due to a lack of revenue and that it would have fair value and impairment losses of as much as HK$9.5 billion.
"Together with the continuous interest rate hikes experienced during the year as well as the depreciation of Renminbi, the group expects to record a (net) loss," it said.
In a separate statement on Friday, the company said the provisions were one-off non-cash and unrealised items and do not affect the group’s cash flow.
New World has one of the highest debt-to-equity ratios among Hong Kong's property developers and its de-leveraging plan as been closely watched by investors over the past year.
While Hong Kong has not seen major defaults on debt by property developers like in mainland China, investors have been worried about weakening liquidity for the sector due to sluggish residential and commercial property markets. - Reuters
