Chinese developer Longfor’s 50% profit slump reflects the poor state of housing market
- Beijing-based developer’s net profit fell to 12.85 billion yuan (US$1.8 billion) in 2023, from 24.36 billion yuan in 2022
- Contracted sales fell 13.9 per cent to 173.5 billion yuan last year, corresponding to gross floor area sales of about 10.8 million square metres
Chinese property giant Longfor Group reported a near 50 per cent slump in net profit for last year, while revenue from home sales plunged because of the sluggish housing market.
Net profit came in at 12.85 billion yuan (US$1.8 billion) in 2023, compared with 24.36 billion yuan a year earlier, the company said in a filing to the Hong Kong stock exchange on Friday.
Overall revenue was 180.74 billion yuan, of which investment property operations and services accounted for 24.88 billion yuan, an increase of 5.7 per cent from a year earlier. Revenue from property development, however, decreased 31.3 per cent year on year to 155.86 billion yuan.
“The falling sales over the past two years, plus the decrease in new home prices and earnings, have become a common problem industry-wide,” Zhao Yi, chief financial officer, said at the results briefing.
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The lacklustre earnings were due to lower contracted sales, which fell 13.9 per cent to 173.5 billion yuan last year, corresponding to gross floor area sales of about 10.8 million square metres, according to the earnings report.
