New World Development Company (17) H2 2025 earnings summary

Executive summary

• Revenues declined 23% year-on-year to HK$27,681 million, mainly due to lower construction revenue, fewer property bookings in Mainland China, and loss of disposed business income.

• Focused on sustainable business, cash flow improvement, and operational efficiency, with progress in deleveraging and cost controls.

• Completed HK$88.2 billion bank refinancing and secured an additional HK$3.95 billion loan facility, enhancing liquidity and extending earliest loan maturity to June 2028.

• Achieved FY2025 property sales target of HK$26 billion, with strong performance in both Hong Kong and Mainland China.

• Reported a full-year net loss attributable to shareholders of HK$16.3 billion, mainly due to one-off impairment provisions and non-cash losses.

Financial highlights

• Core operating profit for FY2025 decreased by 13% year-on-year to HK$6.0 billion; segment results declined 4% year-on-year.

• G&A expenses fell 16% year-on-year to HK$3.5 billion; CAPEX dropped 15% to HK$12.6 billion, below guidance.

• Total debt reduced by HK$5.7 billion to HK$146 billion; net debt down by HK$3.5 billion to HK$120.1 billion.

• Net gearing ratio at 58.1% as of June 2025, up from 55.0% last year.

• Average interest rate on borrowings declined to 4.8% in FY2025, saving HK$1.3 billion in financing costs.

Outlook and guidance

• FY2026 property sales target raised to HK$27 billion, with focus on cash flow and debt reduction.

• CAPEX guidance for FY2026 is below HK$12 billion, prioritizing projects with short cash conversion cycles.

• Continued suspension of dividend and perpetual bond coupon payments to preserve cash.

• No short- to medium-term net gearing targets set due to market and asset disposal uncertainties.

• Mainland China policies expected to support market stabilization; group confident in leveraging core city opportunities.