What’s new: Fosun International Ltd. reported a 95% plunge in 2022 profit as repeated Covid-19 outbreaks hurt its business and global capital market turmoil widen its investment losses.
The conglomerate reported a net profit of 540 million yuan ($78.2 million) in 2022, down 94.7% from 2021, thought its revenue increased 8.74% to 175.4 billion yuan.
A loss of 3.5 billion yuan in its insurance and asset management segments dragged down the company’s profit, Fosun said. The red ink mainly reflected falling values of investments held by its insurance and asset management units, the company said.
Fosun Chairman Guo Guangchang said the company expects 2023 to be better, particularly for its tourism and retail businesses.
The background: Fosun operates a wide variety of businesses ranging from real estate development and tourism to pharmaceuticals and consumer products. The company came under mounting pressure from its huge debt overhang amid the declining property market and weak retail consumption as several rounds of Covid outbreaks strained liquidity.
The company’s debt crisis exploded in June when its dollar bonds suffered a record sell-off after Moody’s Investors Service put Fosun on review for a downgrade. Fosun has been aggressively selling assets to repay debt. In 2022, the group sold or announced plans to sell nearly 40 billion yuan of assets.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
Get our weekly free Must-Read newsletter.
