China's Gemdale H1 profit down 40%

BEIJING - Gemdale Corporation, one of China's biggest property developers, saw its first-half net profit plunge 39.5 percent year-on-year to 303.8 million yuan ($49 million), it said on Saturday.

Revenues for the period, however, climbed 35.9 percent from a year earlier to 8.8 billion yuan, the Shenzhen-based developer said in its first-half financial report delivered to Shanghai Stock Exchange.

The company said the results were due to reduced profit margins following aggressive sales promotion earlier in the year and an increase of operating costs.

The company's property sales in terms of floor space in the first six months rose 32.2 percent year-on-year to 1.5 million square meters, while sales in terms of value climbed 46.5 percent to 19.7 billion yuan.

Gemdale said the country would continue to implement property regulation policies in the second half of the year and home prices are unlikely to see sharp rises.

Official data showed prices of both new and existing homes continued to rise in most Chinese cities in June, despite property purchase restrictions in place since early 2010. Out of a statistical pool of 70 cities, 63 saw month-on-month home price rises.