Country Garden Services Faces Earnings Hit Amid Sanitation Business Struggles
Impairment Charges Loom Large
Country Garden Services, the property services arm of Chinese builder Country Garden, is bracing for a significant earnings drop of up to 1.10 billion yuan ($150.03 million) in its annual earnings. This downward revision is primarily attributed to the sanitation business, which is set to record an impairment charge for goodwill and tangible assets.
Expansion Woes and Cash Flow Concerns
The sanitation business’s expansion plans have not unfolded as expected, leading to a decline in both sales and profit. Furthermore, the lengthy payment periods of some customers have resulted in unsatisfactory cash flows, according to an exchange filing. These challenges have cumulatively contributed to the anticipated earnings drop.
Business Operations Unaffected
Despite these setbacks, Country Garden Services reassures that the impairment charges will not impact the normal operations of the firm. The company boasts sufficient working capital and a stable business operation, ensuring continuity and minimizing disruptions.
Fiscal 2024 Results on the Horizon
Country Garden Services expects to release its fiscal 2024 results in mid-to-late March 2025. This announcement comes on the heels of its parent company, Country Garden, proposing a debt reduction deal to its offshore creditors, aiming to trim its debt by $11.6 billion.
Currency Conversion
For reference, $1 is equivalent to 7.3319 Chinese yuan renminbi.
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