New World Development books HK$28.1B loss, exits HK airport mall
The developer logged a HK$18.3 billion (US$2.33 billion) net loss from terminating its 11 SKIES project operating rights, pushing its full-year loss to HK$28.1 billion.
Hong Kong Mall Project Terminated
New World Development (NWD) has terminated its operating rights for the 11 SKIES shopping mall project, located adjacent to the Hong Kong International Airport. The company recorded a net loss of HK$18.3 billion (US$2.33 billion) from this decision. NWD, controlled by the Cheng family, plans to surrender the project to the Hong Kong Airport on April 1, 2027. This includes providing works and services valued at up to HK$1.1 billion without charge.
Financial Year Losses Mount
The termination charges significantly impacted NWD's financial performance. The company reported a net loss of HK$28.1 billion for the financial year ended June, up from a HK$16.3 billion net loss in the previous year. The HK$18.3 billion termination loss included HK$14.7 billion in impairment losses and HK$2.3 billion in early termination charges.
Despite these non-cash losses, NWD posted a core profit of HK$2.2 billion for the year, marking its first core profit in three years.
Debt Reduction and Liquidity Drive
NWD, identified as Hong Kong's most heavily indebted property developer among its local counterparts, has been actively pursuing strategies to reduce its debt. These efforts include divesting assets and enhancing liquidity amidst challenging credit conditions and a subdued property market.
CEO Echo Huang stated that resolving the 11 SKIES charges is a major step, forecasting a significant improvement in cash flow during the first half of fiscal year 2026/27.
Expanded Loan Facility Boosts Cash Flow
Further supporting its liquidity drive, NWD announced an expansion of its loan facility. The company's loan facility with Deutsche Bank increased by approximately HK$1 billion, rising from HK$3.95 billion committed in June to HK$4.9 billion.
This additional financing shows NWD's commitment to strengthening its balance sheet and managing its substantial debt load, which is a key focus for investors watching the Hong Kong property sector.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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