(Reuters) – The property services arm of Chinese builder Country Garden is expecting a drop of up to 1.10 billion yuan ($150.03 million) in annual earnings as its sanitation business plans to record an impairment charge for goodwill and tangible assets.
The unit, Country Garden Services , said the impairment was primarily because the expansion of its sanitation business had not been carried out as was scheduled and expected in the past years, leading to a drop in both sales and profit.
The long payment period of some customers of the sanitation business had also resulted in some “unsatisfactory” cash flows, Country Garden Services said in an exchange filing.
It does not expect the charges to affect the normal operations of the firm, the company said, adding it had enough working capital and a stable business operation.
The company expects to report its fiscal 2024 results in mid-to-late March 2025, it said.
Property developer Country Garden, which has been in the middle of a prolonged local debt crisis, said last week it had proposed a deal to its offshore creditors to cut its debt by $11.6 billion.
($1 = 7.3319 Chinese yuan renminbi)
(Reporting by Aaditya Govind Rao & Sherin Sunny in Bengaluru; Editing by Anil D’Silva)
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