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Profit falls on high costs, low home sales

COUNTRY Garden Holdings Co Ltd, whose 2007 listing in Hong Kong made several of its shareholders billionaires, said its profit plunged 66 percent last year on a drop in property sales and higher operational costs.

Its net income tumbled to 1.378 billion yuan (US$201 million) last year, the Guangdong Province-based company said in a statement to the Hong Kong stock exchange yesterday.

Revenue fell 11 percent to 15.7 billion yuan during 2008, primarily due to sluggish property sales and a drop in turnover from its construction and decoration businesses, the company said.

The company also saw a 11.6-percent drop in property development to 14.7 billion yuan after it sold 2.14 million square meters of houses last year, a year-on-year decline of 17.8 percent. However, the average selling price rose to 6,861 yuan per square meter from 6,359 yuan per square meter in 2007.

Revenue generated from construction and decoration plunged 35 percent to 408.5 million yuan, the firm said.

However, turnover from property management and hotel operations, two other major sources of revenue, jumped 32 percent and 27 percent to 293.3 million yuan and 274.5 million yuan, respectively, from a year earlier.

Country Garden, owned by Yang Huiyan whom Forbes Magazine said was the richest woman in Asia in 2007, accelerated its pace of expansion outside its Guangdong Province home base last year by launching 20 new projects, out of a total of 23.


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