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

-- Company Beats 2Q12 Revenue Guidance --

14 Aug, 2012, 07:00 ET from China Housing & Land Development, Inc.

XI'AN, China, Aug. 14, 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 June 30, 2012.

Highlights for Q2 2012:

  • Total revenue in the second quarter of 2012 increased 49.0% to $35.0 million from $23.5 million in the first quarter of 2012 and increased 72.9% from $20.3 million in the second quarter of 2011.
  • Total gross floor area ("GFA") sales were 25,908 sq. meters during the second quarter of 2012, compared to 20,366 sq. meters in the first quarter of 2012 and 12,769 sq. meters in the second quarter of 2011.
  • Average residential selling price ("ASP") in the second quarter of 2012 was RMB 5,705, compared with RMB 6,215 in the first quarter of 2012, and RMB 6,551 in the second quarter of 2011.
  • Gross profit increased 15.3% to $8.1 million from $7.0 million in the first quarter of 2012 and increased 58.6% from $5.1 million in the second quarter of 2011. Second quarter 2012 gross margin was 23.2% compared to 29.9% in the first quarter of 2012 and 25.3% in the second quarter of 2011.
  • SG&A expenses as a percentage of total revenue decreased to 11.3%, compared to 12.9% in the first quarter of 2012 and decreased from 16.4% in the second quarter of 2011.
  • Operating income decreased 10.4% to $3.1 million from $3.4 million in the first quarter of 2012, and increased 258.8% from $0.9 million in the second quarter of 2011.
  • Net income attributable to the Company in the second quarter of 2012 was $1.9 million, or $0.05 per diluted share.

Mr. Pingji Lu, China Housing's Chairman, commented, "We were pleased that our financial results for the second quarter were stronger than our original forecast. This performance was fueled by increased sales at our Puhua Phase I and II projects. Our three active projects, Puhua Phase I, Puhua Phase II and JunJing III generated the majority of our revenue with GFA sales of approximately 26 thousand square meters and a total average selling price of RMB 5,705 per square meter.  While overall GFA sales were high at two of our three main projects this quarter, our gross profit margin was lower than expected.  This was due to a change in estimated revenue and cost of sales at our JunJing III project as well as decreased ASP at our Puhua Phase II project to enhance sales. We aim to keep our gross margin in the 25% to 28% range and believe this will be achievable in the remaining half of the year."

"As we look ahead to the second half of the year, we believe market conditions will continue to improve and consumers will continue to resume their buying activity. We have one main project — Puhua Phase II, that will drive sales in the second half of the year. We also have several new projects under construction that are expected to commence pre-sales in the latter half of the year.  Recently, we have improved our debt position and believe we have sufficient levels of capital for our business expansion in the coming quarters ahead. We see a number of unique opportunities to drive demand for our residential and commercial properties in the Xi'an market and look forward to capitalizing on our growth to build China Housing into a larger, more profitable business." 

Total revenue in the second quarter of 2012 increased 49.0% to $35.0 million from $23.5 million in the first quarter of 2012 and increased 72.9% from $20.3 million in the second quarter of 2011.  In the second quarter of 2012, most of the Company's revenue came from its Puhua Phase I and Phase II projects.  Second quarter 2012 contract sales totaled $24.8 million compared to $20.1 million in the first quarter of 2012 and $12.9 million from the second quarter of 2011.  Total gross floor area ("GFA") sales were 25,908 sq. meters during the second quarter of 2012, compared to 20,366 sq. meters in the first quarter of 2012 and 12,769 sq. meters in the second quarter of 2011. The Company's ASP in the second quarter of 2012 increased to RMB 5,705 compared to RMB 6,215 in the first quarter of 2012, and RMB 6,551 in the second quarter of 2011.

Gross profit for the three months ended June 30, 2012 was $8.1 million, representing an increase of 15.3% from $7.0 million in the first quarter of 2012 and a 58.6% increase from $5.1 million in the same period of 2011. The increase in gross profit was due to increased sales from the Company's three main projects. Gross profit margin for the three months ended June 30, 2012 was 23.2%, which is below the 25.3% in the same period of 2011 and the 29.9% in the first quarter of 2012. The decrease in gross profit margin was mainly due to a change in estimated revenue and cost of sales at our JunJing III project. 

SG&A expense was $4.0 million in the second quarter of 2012, compared to $3.0 million in the first quarter of 2012 and $3.3 million in the second quarter of 2011. SG&A expense as a percentage of total revenue was 11.3%, compared to 12.9% in the first quarter of 2012 and 16.4% in the second quarter of 2011. The year-over-year increase in SG&A expense was primarily due to increased selling expenses associated with increased sales revenue.

Operating income in the second quarter of 2012 was $3.1 million, or 8.7% of total revenue, decreased from $3.4 million, or 14.5% of total revenue, in the first quarter of 2012, and increased from $0.9 million, or 4.2% of total revenue in the second quarter of 2011. The year-over-year increase was mainly due to increased revenue.

Net income attributable to China Housing in the second quarter of 2012 was $1.9 million, or $0.05 per diluted share. This performance compares to a net income of $3.4 million in the first quarter of 2012.

Sequential Quarterly Revenue Breakout Comparison

Project

Q2 2012

Q1 2012

Recognized Revenue

Contract Sales

GFA Sold

ASP

Unsold GFA

POC

Recognized Revenue

Contract Sales

GFA Sold

ASP

($)

($)

(sqm)

(RMB)

(sqm)

($)

($)

(sqm)

(RMB)

Projects Under Construction

Puhua Phase One

12,043,477

6,029,952

4,980

7,666

14,030

97.6%

4,778,151

1,245,345

1,394

5,628

Puhua Phase Two

14,541,350

15,973,143

19,343

5,228

161,106

55.3%

1,770,796

2,348,212

2,678

5,524

JunJing III

4,313,484

2,285,239

1,857

7,790

2,077

82.8%

10,629,103

13,242,856

14,198

5,876

Projects Completed

JunJing II Phase One

-

-

-

-

817

100%

3,256,293

3,256,293

2,096

9,788

JunJing I

(828,763)

(828,763)

(272)

19,938

4,825

100%

-

-

-

-

Additional Project

-

-

-

-

-

100%

-

-

-

-

Other Income

4,945,971

-

-

3,067,428

-

-

Total

35,015,520

23,459,571

25,908

5,705

182,855

- 

23,501,771

20,092,706

20,366

6,215

Q-o-Q Change

49.0%

16.8%

27.2%

-8.2%

Total debt outstanding as of June 30, 2012 was $201.2 million compared with $192.4 million on December 31, 2011.  Net debt outstanding (total debt less cash) as of June 30, 2012, 2012 was $105 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 44.3% on June 30, 2012 and 33.0% on December 31, 2011.

Q2 2012

Projects in Planning

Unsold

GFA

First

Pre-sales

Scheduled

(sqm)

Puhua Phase Three

177,193

Q4 2012

Park Plaza

141,822

Q4 2012

Ankang Project

243,152

Q4 2012

Golden Bay

252,540

Q2 2013

Puhua Phase Four

216,611

Q3 2013

Textile City

630,000

Q3 2013

Total projects in planning

1,661,318

2012 Third Quarter Outlook

Total recognized revenue for the 2012 third quarter is expected to reach $23 to $26 million, compared to $32.1 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 August 14th, 2012.  Listeners may access the call by dialing #1-913-312-0647. 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 August 21st, 2012, by dialing #1-858-384-5517; passcode: 9513435.

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 +86-29-8258-2648 in Xi'an 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

Unaudited Interim Condensed Consolidated Balance Sheets

As of June 30, 2012 and December 31, 2011

June 30,

December 31,

2012

2011

 ASSETS

Cash and cash equivalents

$

12,394,253

$

22,014,953

Cash - restricted

83,809,061

105,720,400

Accounts receivable, net of allowance for                     doubtful accounts of $566,537 and                     $571,857, respectively

16,069,860

20,253,706

Other receivables, prepaid expenses and                     other assets, net

3,108,756

1,483,758

Real estate held for development or sale

217,163,574

163,482,316

Property and equipment, net

34,691,813

33,018,990

Advance to suppliers

2,179,083

889,965

Deposits on land use rights

41,921,048

65,286,137

Intangible assets, net

53,536,752

54,148,953

Goodwill

1,877,156

1,894,782

Deferred tax asset

-

308,248

Deferred financing costs

189,586

253,569

Total assets

$

466,940,942

$

468,755,777

LIABILITIES

Accounts payable

$

39,665,399

$

44,275,965

Advances from customers

49,053,224

57,541,251

Accrued expenses

7,697,765

8,380,041

Income and other taxes payable

15,374,676

14,386,133

Other payables

7,049,958

7,474,035

Loans from employees

18,872,973

14,887,431

Loans payable

149,015,279

148,402,690

Deferred tax liability

14,621,291

14,861,462

Warrants liability

976

4,162

Fair value of embedded derivatives

109,345

330,629

Convertible debt

9,639,742

9,165,591

Mandatorily redeemable non-controlling                     interests in Subsidiaries

23,658,219

19,935,482

Total liabilities

334,758,847

339,644,872

SHAREHOLDERS' EQUITY

Common stock: $.001 par value, authorized                    100,000,000 shares issued 35,438,079                     and 35,078,639, respectively

35,438

35,079

Additional paid in capital

49,774,295

48,961,658

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

(434,240)

(420,098)

Statutory reserves

7,857,612

7,857,612

Retained earnings

54,697,621

50,555,460

Accumulated other comprehensive income

20,251,369

22,121,194

Total shareholders' equity

132,182,095

129,110,905

Total liabilities and shareholders' equity

$

466,940,942

$

468,755,777

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Income

For The Three and Six Months Ended June 30, 2012 and 2011

(Unaudited)

3 Months

3 Months

6 Months

6 Months

June 30,

2012

June 30,

2011

June 30,

2012

June 30,

2011

REVENUES

Real estate sales

$

30,069,549

$

15,573,256

$

50,503,892

$

35,230,073

Other income

4,945,971

4,678,936

8,013,399

7,579,815

Total revenues

35,015,520

20,252,192

58,517,291

42,809,888

COST OF SALES

Cost of real estate sales

23,115,905

13,150,640

37,348,769

27,789,214

Cost of other revenue

3,792,088

1,987,855

6,031,958

4,184,424

Total cost of revenues

26,907,993

15,138,495

43,380,727

31,973,638

Gross margin

8,107,527

5,113,697

15,136,564

10,836,250

OPERATING EXPENSES

Selling, general, and administrative            expenses

3,956,069

3,321,725

6,979,754

6,754,441

Stock-based compensation

690,390

17,820

812,996

17,820

Other expenses

58,455

348,901

64,888

390,478

Interest expense

100,676

365,460

330,948

962,608

Accretion expense on convertible            debt

241,665

206,813

474,151

543,804

Total operating expenses

5,047,255

4,260,719

8,662,737

8,669,151

NET INCOME FROM BUSINESS OPERATIONS

3,060,272

852,978

6,473,827

2,167,099

CHANGES IN FAIR VALUE OF DERIVATIVES

Change in fair value of embedded derivatives

(150,181)

(409,478)

(221,284)

(1,462,232)

Change in fair value of warrants

(3,554)

(263,623)

(3,186)

(1,114,274)

Total changes in fair value of derivatives

(153,735)

(673,101)

(224,470)

(2,576,506)

Income before provision for income taxes 

3,214,007

1,526,079

6,698,297

4,743,605

Provision for income taxes

1,372,027

985,101

2,341,512

1,771,590

(Recovery of) provision for deferred income taxes

(64,768)

(33,922)

214,624

(71,968)

NET INCOME

$

1,906,748

$

574,900

$

4,142,161

$

3,043,983

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

34,914,731

35,078,639

34,822,496

34,485,897

Diluted

34,914,731

36,694,348

34,822,496

36,101,606

NET INCOME PER SHARE

Basic

$

0.05

$

0.02

$

0.12

$

0.09

Diluted

$

0.05

$

0.01

$

0.12

$

0.05

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

 Interim Condensed Consolidated Statements of Comprehensive Income

For The Three and Six Months Ended June 30, 2012 and 2011

(Unaudited)

3 Months

3 Months

6 Months

6 Months

June 30,

June 30,

June 30,

June 30,

2012

2011

2012

2011

NET INCOME

$

1,906,748

$

574,900

$

4,142,161

$

3,043,983

OTHER COMPREHENSIVE INCOME (LOSS)

(Loss) gain in foreign exchange

(1,763,412)

1,721,118

(1,869,825)

3,083,989

COMPREHENSIVE INCOME

$

143,336

$

2,296,018

$

2,272,336

$

6,127,972

 

SOURCE China Housing & Land Development, Inc.



RELATED LINKS

http://www.chldinc.com


http://www.viavid.net