Mainland property giant China Vanke has posted a 16.7 percent drop in net profit, to 4.03 billion yuan, for 2008.

Vanke Chairman Wang Shi yesterday attributed the setback to a provision for diminution in the value of 13 projects worth 890 million yuan.

Wang also rebuffed speculation that the company had taken the lead to slash prices in the market. "I admit that we initiated the price cut last year, but the extent of the cutback was moderate - between 10 to 15 percent - compared to peers."

The company's average selling price was 8,600 yuan per sq m last year. Wang said property prices would soon bottom out but refused to forecast the price trend.

In 2008, China Vanke bought 4 million sq m. The average cost of land was 2,003 yuan per sq m. The company's booked area was at 4.51 million sq m.

Wang said China Vanke amassed about 8.7 billion yuan for land acquisition.

Last year, the company registered 38.63 billion yuan in sales revenue, an increase of 15.3 percent year-on-year.

Vanke has about 19.98 billion in cash. Its net debt ratio stands at 33.1 percent.

Long-term borrowing accounted for 45.5 percent, while short-term and one-year loans amounted to 17.87 billion.

In February alone, the company recorded 3.9 billion yuan in sales, an increase of 150 percent year-on-year.

Wang said he was optimistic about this year's sales performance. He said the company had about 3.464 million sq m of yet-to-be-booked land worth about 27.34 billion yuan as of year-end 2008.

(China Daily March 10, 2009)