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Bond Market News
NWD Warns of Potential Loss of Up to $871mn
February 24, 2025
New World Development (NWD), warned of a potential loss of up to HKD 6.8bn ($871mn) for the six months ending December 2024, citing weak property markets in Hong Kong and mainland China. This follows a profit of HKD 502mn ($64.6mn) in the same period the previous year. The expected loss is primarily due to non-cash impairment losses of HKD 4.7-5.1bn ($600-660mn) from its properties’ fair value changes. Despite these losses, NWD anticipates a core operating profit of HKD 4.35-4.55bn ($560-590mn), a 15-19% YoY decline. The company’s large debt pile, along with a net gearing ratio of 55%, and the impact of falling property prices have worsened its financial performance. Strategists note that NWD has been selling properties at discounted prices, whilst carrying high interest rates on its debt. As per UBS, due to high inventories, Hong Kong developers are expected to continue selling flats at discounts this year.
NWD dollar bonds were trading stable, with its 6.15% Perp trading at 50.5 cents on the dollar.
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