China Housing & Land Development Inc. Announces First Quarter 2012 Financial Results

XI'AN, China, May 15, 2012 /PRNewswire-Asia-FirstCall/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended March 31, 2012.

Highlights for Q1 2012:

  • Total revenue in the first quarter of 2012 decreased 50.9% to $23.5 million from $47.9 million in the fourth quarter of 2011 and increased 4.2% from $22.6 million in the first quarter of 2011.
  • Total gross floor area ("GFA") sales were 17,090 sq. meters during the first quarter of 2012, compared to 44,631 sq. meters in the fourth quarter of 2011 and 28,438 sq. meters in the first quarter of 2011.
  • Average residential selling price ("ASP") in the first quarter of 2012 was RMB 7,407, compared with RMB 6,301 in the fourth quarter of 2011, and RMB 6,115 in the first quarter of 2011.
  • Gross profit increased 2.1% to $7.0 million from $6.9 million in the fourth quarter of 2011 and increased 22.8% from $5.7 million in the first quarter of 2011. First quarter 2012 gross margin was 29.9% compared to 14.4% in the fourth quarter of 2011 and 25.4% in the first quarter of 2011.
  • SG&A expenses as a percentage of total revenue increased to 12.9%, compared to 7.0% in the fourth quarter of 2011 and decreased from 15.2% in the first quarter of 2011.
  • Operating income increased 58.8% to $3.4 million from $2.2 million in the fourth quarter of 2011, and increased 159.8% from $1.3 million in the first quarter of 2011.
  • Net income attributable to the Company in the first quarter of 2012 was $2.2 million, or $0.06 per diluted share.

Mr. Pingji Lu, China Housing's Chairman, commented, "Despite the expected slowdown in real estate market, our financial results for the first quarter were stronger than expected in a seasonally slower quarter for China Housing.  We adjusted our product supply at our Puhua projects in the first quarter making a larger number of lower cost units with lower average GFA available to drive sales.  Our three active projects in the first quarter, JunJing III, Puhua Phase I and Puhua Phase II, continued to generate the majority of total revenue.  Average selling prices at JunJing III were higher than our prior quarter resulting in gross profit margin above 30%.  Our three active projects resulted in GFA sales of 14,994 square meters and average selling price of RMB 7,074.  According to E-House (China) Real Estate Research Institute, total GFA sales in Xi'an were 1.8 million sq. meters from 2.5 million sq. meters in the fourth quarter 2011 and the average residential sale price in Xi'an was RMB 7,703 per square meter from RMB 7,903 in the fourth quarter 2011."

"We continue to monitor the property market environment in Xi'an and to adjust our product supply to meet consumer demand.  We are currently focusing more of our marketing efforts on first time home buyers who are more consistent buyers during times of market uncertainly and a greater portion of our existing and upcoming development projects are geared toward this group."

"Our projects are progressing as planned and the consumer lending environment is improving.  We have four new projects currently scheduled to commence pre-sales in 2012 along with two other projects scheduled for construction in 2013.  Although we do not anticipate additional action by the government to reduce speculation in the local market for the remainder of this year, our growth outlook remains uncertain at this point in time.  We are hopeful we'll see a gradual improvement in demand in Xi'an as the market environment stabilizes.  As this happens, we expect to experience a corresponding level of revenue growth."

Total revenue in the first quarter of 2012 decreased 50.9% to $23.5 million from $47.9 million in the fourth quarter of 2011 and increased 4.2% from $22.6 million in the first quarter of 2011.  In the first quarter of 2012, most of the Company's revenue came from its JunJing III, Puhua Phase I and Phase II projects.  First quarter 2012 contract sales totaled US$20.1 million compared to $44.6 million in the fourth quarter of 2011 and $26.4 million from the first quarter of 2011.  Total gross floor area ("GFA") sales were 17,090 sq. meters during the first quarter of 2012, compared to 44,631 sq. meters in the fourth quarter of 2011 and 28,438 sq. meters in the first quarter of 2011.  The Company's ASP in the first quarter of 2012 increased to RMB 7,407 compared with RMB 6,301 in the fourth quarter of 2011, and RMB 6,115 in the first quarter of 2011.  The increase in ASP was mainly due higher selling price at the Company's JunJing III project.

Gross profit for the three months ended March 31, 2012 was $7.0 million, representing an increase of 2.1% from $6.9 million in the fourth quarter of 2011 and a 22.8% increase from $5.7 million in the same period of 2011.  Gross profit margin for the three months ended March 31, 2012 was 29.9%, which is above the 25.4% in the same period of 2011 and the 14.4% in the fourth quarter of 2011. The increase in gross profit margin was mainly due to increased ASP from JunJing III project. 

SG&A expense was $3.0 million in the first quarter of 2012, compared to $3.4 million in the fourth quarter of 2011 and $3.4 million in the first quarter of 2011. SG&A expenses as a percentage of total revenue was 12.9%, compared to 7.0% in the fourth quarter of 2011 and 15.2% in the first quarter of 2011. The year-over-year percentage decrease was primarily due to the increase in revenue, and cost control in SG&A expense.

Operating income in the first quarter of 2012 increased to $3.4 million, or 14.5% of total revenue, from $2.2 million, or 4.5% of total revenue, in the fourth quarter of 2011, and increased from $1.3 million, or 5.8% of total revenue in the first quarter of 2011. The increase was mainly due to the increase in revenue and gross profit, as well as the decrease in SG&A expense.

Net income attributable to China Housing in the first quarter of 2012 was $2.2 million or $0.06 per basic share and $0.06 per diluted share. This performance compares to a net income of $2.5 million in the fourth quarter of 2011, and 2.8 million in the first quarter of 2011.

Sequential Quarterly Revenue Breakout Comparison

Project

Q1 2012

Q4 2011

Recognized Revenue

Contract Sales

GFA Sold

ASP

Unsold GFA

POC

Recognized Revenue

Contract Sales

GFA Sold

ASP


($)

($)

(m2)

(RMB)

(m2)


($)

($)

(m2)

(RMB)

Projects Under Construction

Puhua Phase One

4,778,151

1,245,345

1,394

5,628

18,891

91.0%

13,736,692

6,128,808

5,248

7,358

Puhua Phase Two

1,770,796

2,348,212

2,678

5,524

180,155

58.5%

6,040,769

4,904,144

5,082

6,080

JunJing III

10,629,103

13,242,856

10,922

7,638

7,410

77.5%

24,408,721

32,921,226

33,913

6,117

Projects Completed

JunJing II Phase One

3,256,293

3,256,293

2,096

9,788

817

100%

-

-

-

-

JunJing I

-

-

-

-


100%

683,643

683,643

388

11,100

Additional Project

-

-

-

-

-

100%

-

-

-

-












Other Income

3,067,428

-

-




3,025,519

-

-


Total

23,501,771

20,092,706

17,090

7,407

207,273

-

47,895,344

44,637,821

44,631

6,301

Q-o-Q Change

-50.9%

-55.0%

-61.7%

17.6%







Total debt outstanding as of March 31, 2012 was $204.3 million compared with $192.4 million on December 31, 2011.  Net debt outstanding (total debt less cash) as of March 31, 2012 was $107.7 million compared with $64.0 million on December 31, 2011.  The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 45.0% on March 31, 2012 and 33.0% on December 31, 2011.

 


Q1 2012                                   

Projects in Planning

Unsold

GFA

First

Pre-sales

Scheduled


(m2)


Ankang Project

243,152

Q3 2012

Park Plaza

141,822

Q3 2012

Golden Bay

252,540

Q3 2012

Puhua Phase Three

177,193

Q3 2012

Puhua Phase Four

216,611

Q3 2013

Textile City

630,000

Q3 2013

Total projects in planning

1,661,318


2012 Outlook

Total recognized revenue for the 2012 second quarter is expected to reach $20 to $22 million, compared to $20.3 million in the same period of 2011.  The Company is reporting contract sales estimates compared to revenue as they are not subject to percentage of completion alterations.

Conference Call Information

Management will host a conference call at 8:00 am ET on May 15th, 2012.  Listeners may access the call by dialing #1-913-312-0953. To listen to the live webcast of the event, please go to http://www.viavid.net.  Listeners may access the call replay, which will be available through May 22nd, 2012, by dialing #1-858-384-5517; passcode: 5181467.

About China Housing & Land Development, Inc.

Based in Xi'an, the capital city of China's Shaanxi province, China Housing & Land Development, Inc., is a leading developer of residential and commercial properties in northwest China. China Housing has been engaged in land acquisition, development, and management, including the sales of residential and commercial real estate properties through its wholly-owned subsidiary in China, since 1992.

China Housing & Land Development is the first Chinese real estate development company traded on NASDAQ.  The Company's news releases, project information, photographs, and more are available on the internet at www.chldinc.com.

Safe Harbor

This news release may contain forward-looking information about China Housing & Land Development, Inc. which is covered under the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward- looking terminology such as believe, expect, may, will, should, project, plan, seek, intend, or anticipate or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and China Housing & Land Development's future performance, operations, and products.

Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Actual performance results may vary significantly from expectations and projections. Further information regarding this and other risk factors are contained in China Housing's public filings with the U.S. Securities and Exchange Commission.

All information provided in this news release and in any attachments is as of the date of the release, and the companies do not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

China Housing contacts

Mr. Cangsang Huang
Chief Financial Officer
Tel:   +86-29-8258-2648 in Xi'an
Email: chuang@chldinc.com

Ms. Jing Lu
Chief Operating Officer, Board Secretary, and Investor Relations Officer
+86 29.8258.2639 in Xi'an
jinglu@chldinc.com / English and Chinese

Mr. Shuai Luo
Investor Relations
+86 29.8258.2632 in Xi'an
Laurentluo@chldinc.com / English and Chinese

Mr. Bill Zima, ICR
+86 10 6583 7511
William.Zima@icrinc.com

China Housing Investor Relations Department
+1 646. 308.1285


 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Interim Condensed Consolidated Balance Sheets

As of March 31, 2012 (unaudited) and December 31, 2011

 


March 31,



December 31,




2012



2011


 ASSETS







Cash and cash equivalents


$

8,438,125



$

22,014,953


Cash - restricted



88,253,258




105,720,400


Accounts receivable, net of allowance for doubtful

     accounts of $571,530 and $571,857, respectively



21,275,060




20,253,706


Other receivables, prepaid expenses and other assets, net



1,968,295




1,483,758


Real estate held for development or sale



172,117,818




163,482,316


Property and equipment, net



32,663,300




33,018,990


Advance to suppliers



682,932




889,965


Deposits on land use rights



90,690,658




65,286,137


Intangible assets, net



54,063,286




54,148,953


Goodwill



1,893,699




1,894,782


Deferred tax asset



-




308,248


Deferred financing costs



214,572




253,569


Total assets


$

472,261,004



$

468,755,777











LIABILITIES









Accounts payable


$

35,389,393



$

44,275,965


Advances from customers



54,156,966




57,541,251


Accrued expenses



7,688,639




8,380,041


Income and other taxes payable



16,350,514




14,386,133


Other payables



7,871,437




7,474,035


Loans from employees



14,878,920




14,887,431


Loans payable



158,286,249




148,402,690


Deferred tax liability



14,824,719




14,861,462


Warrants liability



4,530




4,162


Fair value of embedded derivatives



259,526




330,629


Convertible debt



9,398,077




9,165,591


Mandatorily redeemable non-controlling interests in Subsidiaries



21,803,665




19,935,482


Total liabilities



340,912,635




339,644,872











SHAREHOLDERS' EQUITY









Common stock: $.001 par value, authorized 100,000,000 shares









issued 35,098,079 and 35,078,639, respectively



35,098




35,079


Additional paid in capital



49,084,245




48,961,658


Treasury stock at cost 351,480 and 337,800 shares, respectively



(434,240)




(420,098)


Statutory reserves



7,857,612




7,857,612


Retained earnings



52,790,873




50,555,460


Accumulated other comprehensive income



22,014,781




22,121,194


Total shareholders' equity



131,348,369




129,110,905











Total liabilities and shareholders' equity


$

472,261,004



$

468,755,777


 

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Income

For The Three Months Ended March 31, 2012 and 2011

(Unaudited)

 



March 31,

2012



March 31,

2011


REVENUES







Real Estate sales


$

20,434,343



$

19,656,817


Other revenue



3,067,428




2,900,879


Total revenues



23,501,771




22,557,696











COST OF REVENUES









Cost of real estate sales



14,232,864




14,638,574


Cost of other revenue



2,239,870




2,196,569


 Total cost of revenues



16,472,734




16,835,143











Gross margin



7,029,037




5,722,553











OPERATING EXPENSES









Selling, general, and administrative expenses



3,023,685




3,432,716


Stock based compensation



122,606




-


Other expenses



6,433




41,577


Financing expense



230,272




597,148


Accretion expense on convertible debt



232,486




336,991


Total operating expenses



3,615,483




4,408,432











NET INCOME FROM BUSINESS OPERATIONS



3,413,555




1,314,121











CHANGE IN FAIR VALUE OF DERIVATIVES









Change in fair value of embedded derivatives



(71,103)




(1,052,754)


Change in fair value of warrants



368




(850,651)


Total change in fair value of derivatives



(70,735)




(1,903,405)











Income before provision for income taxes



3,484,290




3,217,526











Provision for income taxes



969,485




786,489


Provision for (recovery of) deferred income taxes



279,392




(38,046)











NET INCOME


$

2,235,413



$

2,469,083











WEIGHTED AVERAGE SHARES OUTSTANDING









Basic



34,730,261




33,886,568











Diluted



34,730,261




35,502,277











NET INCOME PER SHARE









Basic



0.06




0.07











Diluted



0.06




0.05


SOURCE China Housing & Land Development, Inc.



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