Guangzhou R&F Properties announced its delayed 2021 annual results, reporting a net loss of RMB 16.5bn ($2.4bn) for the year 2021 against a profit of RMB 9.1bn ($1.4bn) for the year 2020. The net loss is mainly attributable to the decrease in revenue from property development due to challenging conditions in the real estate industry, and impairment provision for inventory. The group’s revenue from property development was down by 12% YoY to RMB 69bn ($10.2bn). Rental income from property investment fell 8% YoY to RMB 1bn ($150mn) while revenue from hotel operations rose 13.6% YoY to RMB 5bn ($740mn). As of December 2021, the Group’s total cash stood at RMB 21.1bn ($3.1bn), down 47% YoY; of the cash on book, 85% was denominated in Renminbi and 15% was denominated in other currencies. Total borrowing stood at RMB 128.8bn ($19.1bn) comprising of bank loans, offshore dollar denominated senior notes, domestic bonds, trust loans, and others, each accounting for 46%, 25%, 11% and 18% respectively. The company has also secured uncommitted credit facilities from banks, of which RMB 112.4bn ($16.6bn) was unutilised. For 2021, gearing ratio stood at 130% against 130.2% in 2020. In July Fitch has downgraded R&F to RD (Restricted Default) from C, following the completion of the Chinese developer’s exchange offer.
R&F’s bonds are currently trading at distressed levels of around 16-25 cents.