HONG KONG (Reuters) -Country Garden, once China's biggest developer and now facing a liquidation lawsuit, reported steep losses on Tuesday in its long-overdue 2023 and interim 2024 financial results, hurt by large provisions amid a prolonged property sector crisis.

Government figures show property sales in China shrank almost 50% over the past three years as the industry reeled from an unprecedented debt crisis that began in 2021.

Country Garden, however, said it expected a smaller annual loss for the full year of 2024 on improved margins following the previous provisions, and drops in administrative and sales expenses.

It delayed the publication of its 2023 full-year and 2024 interim financial reports after defaulting on $11 billion of offshore bonds in late 2023. As a result, its Hong Kong shares have been suspended from trading since April 2, 2024.

The developer said in a filing on Tuesday the shares will remain suspended until further notice. It did not provide further details.

It reported a net loss of 12.8 billion yuan ($1.75 billion) in the first six months of 2024, following a record net loss of 178.4 billion yuan in the full year of 2023. Most developers have also reported a loss or declining profit in 2023.

The interim loss last year has, however, narrowed from a 48.9 billion yuan net loss a year ago, while the annual figure compared to a 2022 net loss of 6.1 billion yuan, and a 26.8 billion yuan net profit in 2021.

It had interest-bearing debt of 250.2 billion yuan as of end-June last year, while its cash and cash equivalents stood at 6.7 billion yuan.

"Thanks to relatively big provisions in 2023, the inventory that needed additional provisions have largely decreased; we expect the full year loss in 2024 will significantly narrow," the company said in a separate statement.

The provisions on inventory in the first six months of last year was 2.7 billion yuan, compared to 82.4 billion yuan in the previous 12 months.

Country Garden said it still has 200,000 apartments yet to complete construction after delivering 1.7 million homes to buyers in the past three years. It had 3,059 projects under development across the country as of June 2024.

LIQUIDATION PETITION

Country Garden's annual sales by value dropped more than 70% last year, sending its national ranking down to 16 from 7 in 2023, according to a survey by real estate researcher CRIC, a sharp drop for a company that was once China's biggest developer by sales.

The publication of the results and its offshore debt restructuring update published last week are linked to Country Garden's efforts to fend off a liquidation petition filed by a creditor in a Hong Kong court relating to its non-payment of a $205 million loan.

Guangdong province-based Country Garden said it has proposed to creditors a debt restructuring that would cut its offshore debt worth $16.4 billion by 70%, and it had reached an "understanding" with a lender group.

The next liquidation hearing will be held on Jan. 20.

($1 = 7.3311 Chinese yuan renminbi)

(Reporting by Clare Jim; Editing by Sumeet Chatterjee, Jamie Freed and Emelia Sithole-Matarise)