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Hong Kong property developer New World Development (OTCPK:NDVLY), controlled by billionaire Henry Cheng’s family, has warned of a huge annual loss amid a prolonged downturn in the region’s real estate market.
The company expects to record a loss attributable to shareholders of up to HK$20B ($2.57B) for FY2024, it disclosed in an exchange filing, sending its Hong Kong-listed shares sinking 13% on Monday.
New World (OTCPK:NDVLY) blamed the loss on lack of revenue of major projects, asset impairment, losses on investments, interest rate hikes, and currency depreciation. The company is expected to report earnings later this month.
This would be New World’s (OTCPK:NDVLY) first annual loss in two decades, according to the Financial Times, at a time when it is struggling with mounting debt levels.
Hong Kong’s real estate market has been stuck in a slump due to declining commercial rents and home prices amid higher interest rates and China’s economic slowdown.
“If prices and rents continue to fall, more write-offs may still be on the cards,” Gary Ng, senior economist at Natixis, told FT.
