Chinese developer Longfor plans further debt reductions this year
HONG KONG, Aug 23 (Reuters) -China's Longfor Group 0960.HK, one of few private property developers to avoid default during the sector's debt crisis, said on Friday it would further lower its short-term debt by making early repayments this year.
Beijing-based Longfor has fared better than many industry peers during the crisis because of its focus on larger cities, which have been recording stronger sales than those of smaller cities.
The company's first-half earnings were hurt by a drop in sales and margins, with core profit falling 28% from the same period last year to 4.75 billion yuan ($665.53 million). Core profit excludes effects of fair value changes.
Its shares closed down 0.5% after the financial results, compared with a 0.7% drop on the Hang Seng Mainland Properties Index .HSMPI.
Talking to reporters, Longfor CFO Zhao Yi said the company had cash ready to repay the remaining onshore public bonds maturing this year, worth 1 billion yuan, and plans to make early repayments totalling 6 billion yuan on bonds due in the first quarter of 2025.
He added that over the next few months it will also repay the outstanding 7 billion yuan of an offshore syndication loan due in January.
Longfor lowered its short-term debt by 5.2 billion yuan during the first six months of the year, bringing its total debt down to 187.4 billion yuan as of end-June.
Longfor also said it wants operating income from its non-property development business - such as its investment property operation and property services - to account for the biggest part of company revenue by 2028 compared with 28% in the first half.
That goal is aimed at increasing cashflow and margins, and further reducing debt.
($1 = 7.1372 Chinese yuan renminbi)
Reporting by Clare Jim;
Editing by Helen Popper
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