Dalian Wanda reported a nearly 11% drop in revenue in 2017, one in a series of financial knocks expected to include a further sale of properties in the coming weeks.
The beleaguered Chinese real estate-to-entertainment group said that revenue fell to RMB227 billion and that net profit was basically flat. The group’s net asset value dropped by 12% in 2017 to RMB700 million.
The group has been on the receiving end of a succession of Chinese government actions to curb reckless corporate overseas expansion. These measures have included capital controls and restrictions on China’s banking and investment sector, as well as Cabinet-level redrafting of rules on preferred and disfavored investment sectors. Entertainment, hotels and sports are all now frowned upon.
The measures caused Wanda to reshuffle many of its assets. It has sold off hotels in China and handed off much of its theme-park business. “The revenue from real estate reached RMB83.17 billion, down 24% year-on-year, mainly due to the sharp decrease in revenue from real estate resulting from the transfer of cultural tourism projects,” the group announced Saturday. Wanda said that cultural-sector businesses represented 28% of group revenue in 2017.
The company said its other entertainment businesses, including Wanda Cinema Line and AMC, continued to grow. The per-screen box office of Wanda movie theaters is 1.9 times the Chinese average, the company said. Its cinema loyalty scheme claimed 100 million members.
“Wanda’s film group achieved revenue of RMB53.2 billion in 2017, or 99% of its target, up 36% [year on year]. In 2017, Wanda opened 199 new movie theaters worldwide with a total increase of 1,585 screens. To date, Wanda operates 1,551 movie theaters worldwide with 15,932 screens,” Wanda said.
In recent days Wanda’s overseas asset disposals have continued. It sold a property in London’s Nine Elms district – notching a $60 million profit in the process – and is poised to sell two Australian developments in the coming days .