China’s Evergrande Property Services Eyes Profit Decline
China’s Evergrande Property Services Group anticipates a significant decrease in its annual profit for 2024, citing legal expenses and a more cautious revenue recognition approach as primary factors.
Key Takeaways
- Expected profit decrease of up to 37% for the year ended December 31, 2024.
- Legal expenses related to a deposit pledge are a major contributor.
- A more prudent revenue recognition approach was adopted.
- Consolidated revenue is expected to increase slightly compared to the previous year.
Background
In early January, a Guangzhou city court ordered China Evergrande, along with related parties, to repay pledge guarantees on deposit certificates totaling 13.4 billion yuan ($1.85 billion). This legal battle has significantly impacted Evergrande Property Services Group's financial outlook.
Financial Impact
The company expects to record an unaudited net profit between 980 million yuan and 1,120 million yuan in fiscal 2024, a notable decrease from the 1,563.8 million yuan reported the previous year.
Revenue Expectations
Despite the profit decline, the company anticipates unaudited consolidated revenue for fiscal 2024 to range between 12,650 million yuan and 12,850 million yuan, a slight increase from the 12,486.5 million yuan recorded a year prior.
Official Statement
According to the company, the profit decrease is primarily attributed to non-operating expenses and a more conservative revenue recognition method, rather than core business operations.
Finalizing Results
Evergrande Property Services Group is currently in the process of finalizing its annual results, and further details are expected upon completion.
Currency Conversion
All currency conversions in this article are based on the exchange rate of $1 = 7.2350 Chinese yuan renminbi.