On Monday evening, China Evergrande presented results for 2021 and 2022. It showed a total deficit for 2021 of NOK 963 billion. Last year saw a deficit of NOK 176 billion. It writes business today.
“The losses represent the existence of a sufficiently large amount of uncertainty that could cast strong doubt on the group’s ability to continue operations,” the company wrote in its 2022 annual report.
The total debt and liability was NOK 3.420 billion at the turn of last year, which is in line with a new Chinese record.
Analysts are skeptical about Evergrande’s future.
– The results are meaningless if the business model is broken, director Charles MacGregor at Lucror Analytics, told Channel News Asia.
China Evergrande was for many years the world’s largest real estate company, most recently in 2016. In 2021, the company literally collapsed when they defaulted on debt payments and were unable to deliver the results they agreed to.
The property sector sometimes accounts for nearly 30 percent of value creation in China. Macroeconomist Harry Murphy Cruise at Moody’s Analytics told the BBC it was problematic.
– China’s economy urgently needs rebalancing. There have been two to three decades of massive growth from large infrastructure and property projects. This is not a sustainable growth model.
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