Chinese conglomerate Dalian Wanda Group reported on Sunday substantial declines in both revenue and assets in 2017, as the company sold stakes in cultural and tourism projects and hotel assets to defuse rising debt concerns.
Dalian Wanda Group announced a drop of 10.8 percent in revenue to 227.4 billion yuan (.54 billion) and a drop of 11.5 percent in total assets for 2017, according to Wanda's work report released on Sunday, following its annual meeting.
Although it reported its second consecutive decline in revenue, the report said that net profit remained flat compared with 2016, without providing figures.
The company attributed the declines in assets to sell-outs of culture assets and downsizing real estate assets.
In July 2017, Wanda sold a 91 percent stake in its tourism and theme-park projects to Sunac. It also sold its hotels to R&F, one of China's top 20 developers by contracted sales, which brought yielded 63.7 billion yuan in cash for Wanda, easing the pressure of bank debt incurred amid a global acquisition spree.
In his speech at the annual meeting, Wanda Chairman Wang Jianlin sought to reassure investors that the company would be able to pay off its domestic and foreign debts.
"Wanda will adopt all capital means, such as disposing non-core assets, to reduce the corporate's domestic and overseas debt," Wang said, according to the report.
The group also plans to lower corporate debt to the "absolute safe" level in the next two or three years, the report noted.
In 2017, Wanda Group saw a 32.6 percent increase in revenue from culture business, but that did not offset heavy losses in its real estate businesses. Revenue from its real estate business declined 23.7 percent from a year earlier.
In a move to address rumors that Wanda has been transferring assets overseas, the report said that overseas assets only account for 7 percent of its total assets.
The group has been under pressure since last year due to tightening regulations on overseas merger and acquisitions in the real estate, tourism and several other sectors, and reported high levels of company debt. Banks strengthened their scrutiny of the company's position and ratings agencies downgraded its property unit's credit ratings.
On Thursday, Fitch Ratings, one of the top three global rating agencies, downgraded Dalian Wanda Commercial Property's long-term foreign-currency issuer default rating, the senior unsecured rating and the rating of its outstanding US dollar senior notes two notches to BB plus from BBB, citing offshore liquidity concerns after Wanda failed to issue offshore notes in 2017.
Wanda will soon sell two Australian property projects, Reuters reported, citing sources. Last week, Wanda announced it would sell its interests in One Nine Elms, a London luxury development project.