Chinese property developer Country Garden estimated that first-half profits fell as much as 70% in the first half of the year, as the country’s largest real estate group by sales was drawn into a crisis that has raged through the heavily indebted sector, reports the Financial Times. The company, in a filing on Thursday, said core profit was between about RMB 4.5 billion and RMB 5 billion ($634 million and $736 million) in the first six months of 2022, down from RMB 15.2 billion a year earlier.
Country Garden, which lost its last investment-grade rating after Fitch downgraded it to junk status on Tuesday, cited a market downturn, the effects of the coronavirus pandemic and foreign exchange losses for the fall in earnings. Unlike a growing number of its highly leveraged peers, Country Garden has not defaulted on its debts.
The Chinese property sector has been rattled by a liquidity crisis following last year’s high-profile collapse of Evergrande, the world’s most-indebted developer.