Evergrande Property Services in China forecasts up to 37% drop in annual profit for 2024
China’s Evergrande Property Services Group recently announced a potential decline of up to 37% in its annual profit for the year ending December 31, 2024. This decrease is attributed to various factors, including legal expenses stemming from a deposit pledge issue. The company’s parent, China Evergrande, was ordered by a Guangzhou city court in early January to repay pledge guarantees on deposit certificates amounting to 13.4 billion yuan ($1.85 billion).
Evergrande Property initiated legal action against its parent company, which is known as the world’s most heavily indebted property developer, in early 2024 for using its deposits as collateral for pledge guarantees. As a result of these legal battles and other challenges, Evergrande Property Services Group anticipates reporting an unaudited net profit ranging from 980 million yuan to 1,120 million yuan for the fiscal year 2024, compared to 1,563.8 million yuan in the previous year.
The company’s decision to take action against its parent reflects the complex financial issues that both firms have been grappling with. The court’s ruling demanding the repayment of pledge guarantees highlights the significant financial strains and legal hurdles that Evergrande Property Services Group has faced. These difficulties have ultimately impacted the company’s financial performance, resulting in the projected decline in annual profit for 2024.
Despite these challenges, Evergrande Property Services Group remains focused on addressing its financial and legal obligations while navigating a complex and evolving business environment. The company’s efforts to uphold its financial integrity amidst legal disputes and other obstacles underscore the broader challenges facing the real estate industry in China and the global market. By steadfastly confronting these challenges, Evergrande Property Services Group aims to safeguard its long-term financial stability and fulfill its commitments to stakeholders and investors.
