China Housing & Land Development Inc. Announces Second Quarter 2013 Financial Results -- Company Beats 2Q13 Forecast --

XI'AN, China, Aug. 14, 2013 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended June 30, 2013.

Highlights for Q2 2013:

  • Total revenue in the second quarter of 2013 was $59.7 million, a 9.9% increase from $54.4 million in the first quarter of 2013 and a 70.6% increase from $35.0 million in the second quarter of 2012.  Second quarter recognized revenue significantly exceeded the Company's second quarter revenue outlook of $34 to $36 million.
  • Total gross floor area ("GFA") sales were 48,439 sq. meters during the second quarter of 2013, compared with 89,691 sq. meters in the first quarter of 2013 and 25,908 sq. meters in the second quarter of 2012.
  • Average residential selling price ("ASP") in the second quarter of 2013 was RMB 7,499, compared with RMB 5,695 in the first quarter of 2013, and RMB 5,705 in the second quarter of 2012.
  • Gross profit increased $18.3 million in the second quarter of 2013, a 101.9% increase from $9.0 million in the first quarter of 2013 and a 125.3% increase from $8.1 million in the second quarter of 2012. Second quarter 2013 gross margin was 30.6%, compared with 16.6% in the first quarter of 2013 and 23.2% in the second quarter of 2012.
  • SG&A expenses as a percentage of total revenue increased to 8.2%, from 5.8% in the first quarter of 2013 and decreased from 11.3% in the second quarter of 2012.
  • Operating income was $9.2 million in the second quarter of 2013, a 113.9% increase from $4.3 million in the first quarter of 2013, and a 199.4% increase from $3.1 million in the second quarter of 2012.
  • Net income attributable to the Company in the second quarter of 2013 was $6.4 million, or $0.18 per diluted share, a 107.0% increase from $3.1 million, or $0.09 per diluted share, in the first quarter of 2013.

Mr. Pingji Lu, China Housing's Chairman, commented, "We are pleased to report another strong quarter as our second quarter top line results once again exceeded our guidance forecast. Our strong project development efforts combined with continued strength in the Xi'an residential housing market led to higher average selling prices compared to the last quarter and prior year periods. Four projects contributed the majority of our revenue during the second quarter of 2013, which include our Puhua Phase Two and Three, Park Plaza and Ankang projects."

"We experienced a notable increase in gross profit and a higher gross margin than both the previous quarter and the same period last year, as a result of a considerable increase in revenue and average selling prices while costs remained relatively flat. Furthermore, our Ankang project, which began pre-sales in the fourth quarter of 2012, began to contribute to our revenue during the second quarter."

"As we enter the second half of the year, our current four projects provide us with solid sales and profit opportunities. Additionally, we will initiate marketing for Golden Bay in the third quarter and adjust our sales strategy based on market feedback on the project. We anticipate that official pre-sales will start in the fourth quarter. We remain optimistic about our opportunities in the Xi'an real estate market and continue to focus on the execution of our development project plan. We believe our financial performance in the second half of the year will be strong and that our commitment to providing the highest quality residential properties will continue to drive our growth forward."

Total revenue in the second quarter of 2013 increased 9.9% to $59.7 million from $54.4 million in the first quarter of 2013 and increased 70.6% from $35.0 million in the second quarter of 2012. Other revenue in the second quarter of 2013 decreased to $7.0 million from $11.1 million in the first quarter of 2013 and increased from $4.9 million in the second quarter of 2012. The year-over-year increase was caused by the recognition of interest income on deposits based on the Company's borrowing activity from several overseas banks.

In the second quarter of 2013, the majority of the Company's real estate revenue came from its Puhua Phase Two and Three projects, Park Plaza and Ankang projects. Second quarter 2013 contract sales totaled $59.0 million compared with $82.4 million in the first quarter of 2013 and $24.8 million in the second quarter of 2012. Total gross floor area ("GFA") sales were 48,439 sq. meters during the second quarter of 2013, compared with 89,691 sq. meters in the first quarter of 2013 and 25,908 sq. meters in the second quarter of 2012. The Company's ASP in the second quarter of 2013 was RMB 7,499, compared with RMB 5,695 in the first quarter of 2013, and RMB 5,705 in the second quarter of 2012.

Gross profit for the three months ended June 30, 2013 was $18.3 million, representing an increase of 101.9% from $9.0 million in the first quarter of 2013 and a 125.3% increase from $8.1 million in the second quarter of 2012. Gross profit margin for the three months ended June 30, 2013 was 30.6%, which is above the 16.6% in the first quarter of 2013 and the 23.2% in the second quarter of 2012. The increase in gross profit margin was mainly due to a combination of increased sales volume, increased average selling prices, and sales of Puhua Phase Two commercial units, which had higher gross margin. The Company continues to expect full year gross margin to be in the 25% to 30% range in 2013.

SG&A expense was $4.9 million in the second quarter of 2013, compared with $3.2 million in the first quarter of 2013 and $4.0 million in the second quarter of 2012. SG&A expense as a percentage of total revenue was 8.2%, compared with 5.8% in the first quarter of 2013 and 11.3% in the second quarter of 2012. The year-over-year increase in SG&A expense was due to increased selling expenses during the second quarter of 2013 associated with new projects commencing pre-sales activity. 

Operating income in the second quarter of 2013 was $9.2 million, or 15.3% of total revenue, compared with $4.3 million, or 7.9% of total revenue, in the first quarter of 2013, and $3.1 million, or 8.7% of total revenue in the second quarter of 2012. The year-over-year increase in operating income was mainly due to increased sales revenue and improved gross profit margin.

Net income attributable to China Housing in the second quarter of 2013 was $6.4 million, or $0.18 per diluted share. This performance compares with net income of $3.1 million, or $0.09 per diluted share, in the first quarter of 2013 and net income of $1.9 million, or $0.06 per diluted share, in the second quarter of 2012.

Sequential Quarterly Revenue Breakout Comparison

Project

Q2 2013






Q1 2013





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










Park Plaza

21,709,086

25,098,516

17,348

8,903

110,323

70.9%

19,794,628

30,152,026

22,151

8,439

Puhua Phase

Three

9,168,480

10,163,137

8,665

7,218

71,733

50.9%

17,348,070

36,469,024

48,902

4,624

Puhua Phase

Two

14,621,508

14,039,803

9,181

9,411

127,204

79.9%

5,372,159

7,122,505

5,076

8,700

Ankang

5,526,291

8,024,028

12,655

3,902

191,151

21.5%

-

7,876,083

12,909

4,631

Projects Completed










Puhua Phase

One

1,673,638

1,673,638

591

17,427

7,311

100%

649,744

649,744

569

7,080

JunJing III

24,132

24,132

-

-

873

100%

109,970

109,970

84

8,118

JunJing II

Phase One

-

-

-

-

817

100%

-

-

-

-

JunJing I

-

-

-

-

4,699

100%

-

-

-

-

Other Projects

19,500

-

-

-

-


-

-

-

-

Other Income

6,996,473

-

-




11,099,124

-

-


Total

59,739,107

59,023,253

48,439

7,499

514,110

-

54,373,695

82,379,352

89,691

5,695

Q-o-Q Change

9.9%

-28.4%

-46.0%

31.7%







Total debt outstanding as of June 30, 2013 was $301.9 million compared with $202.6 million on December 31, 2012. Net debt outstanding (total debt less cash and restricted cash) as of June 30, 2013 was $88.7 million compared with $85.9 million on December 31, 2012. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 35.3 percent on June 30, 2013 and 36.6 percent on December 31, 2012.


Q2 2013

Projects in Planning

Unsold

GFA

First

Pre-sales

Scheduled


(m2)


Golden Bay

252,540

Q4 2013

Puhua Phase Four

263,833

Q3 2014

Textile City

630,000

Q3 2014

Total projects in planning

1,146,373


2013 Third Quarter Outlook

Total recognized revenue for the 2013 third quarter is expected to reach $34 million to $36 million, compared with $59.7 million in the 2013 second quarter and $28.9 million in the third quarter of 2012. The Company is reporting revenues, which are subject to percentage of completion alterations.

Conference Call Information

Management will host a conference call at 8:30 am ET on August 14, 2013. Listeners may access the call by dialing #1-913-312-0643. 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 21, 2013, by dialing #1-858-384-5517; passcode: 7803652.

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, CFA
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 Consolidated Statements of Income

For Three and Six Months Ended June 30, 2013 and 2012


















3 months


3 months


6 months


6 months




June 30, 2013


June 30, 2012


June 30, 2013


June 30, 2012

REVENUES













Real estate sales

$

52,742,634


$

30,069,549


$

96,017,205


$

50,503,892


Other revenue


6,996,473



4,945,971



18,095,597



8,013,399

Total revenues


59,739,107



35,015,520



114,112,802



58,517,291















COST OF REVENUES













Cost of real estate sales


37,235,900



23,115,905



73,024,315



37,348,769


Cost of other revenue


4,232,921



3,792,088



13,768,820



6,031,958

Total cost of revenues


41,468,821



26,907,993



86,793,135



43,380,727















Gross margin


18,270,286



8,107,527



27,319,667



15,136,564















OPERATING EXPENSES













Selling, general and administrative expenses


4,904,517



3,956,069



8,066,398



6,979,754


Stock-based compensation


1,006,736



690,390



1,104,273



812,996


Other expenses


390,567



58,455



450,549



64,888


Financing expense 


2,807,094



100,676



4,253,880



330,948


Accretion expense on convertible debt


-



241,665



-



474,151

Total operating expenses


9,108,914



5,047,255



13,875,100



8,662,737





9,161,372



3,060,272







CHANGE IN FAIR VALUE OF DERIVATIVES













Change in fair value of embedded derivatives


-



(150,181)



-



(221,284)


Change in fair value of warrants


-



(3,554)



-



(3,186)

Total change in fair value of derivatives


-



(153,735)



-



(224,470)















Income before provision for income taxes


9,161,372



3,214,007



13,444,567



6,698,297
















Provision for income taxes


2,835,057



1,372,027



4,102,200



2,341,512


(Recovery of) provision for deferred income taxes


(50,013)



(64,768)



(114,648)



214,624

Provision for income taxes


2,785,044



1,307,259



3,987,552



2,556,136















NET INCOME

$

6,376,328


$

1,906,748


$

9,457,015


$

4,142,161















WEIGHTED AVERAGE SHARES OUTSTANDING













Basic



35,086,599



34,914,731



35,086,599



34,822,496
















Diluted


35,086,599



34,914,731



35,086,599



34,822,496















NET INCOME PER SHARE













Basic


$

0.18


$

0.06


$

0.27


$

0.12
















Diluted

$

0.18


$

0.06


$

0.27


$

0.12















The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Unaudited Interim Condensed Consolidated Balance Sheets 

As of June 30, 2013 and December 31, 2012














March 31,


December 31,





2013


2012

ASSETS








Cash


$

100,960,800


$

6,121,448


Cash - restricted


112,235,956



110,576,248


Accounts receivable, net of allowance for doubtful








accounts of $586,439 and $577,713, respectively


50,137,448



26,897,958


Construction in excess of billing


953,735



1,484,626


Other receivables, prepaid expenses and other assets, net


7,972,560



6,854,325


Real estate held for development or sale


225,395,977



238,111,545


Property and equipment, net


34,354,503



33,837,346


Advances to suppliers


460,774



1,363,817


Deposits on land use rights


43,393,688



42,748,017


Intangible asset, net


55,192,879



54,482,252


Goodwill


1,943,098



1,914,186


Deferred financing costs


116,221



194,162




Total assets


633,117,639



524,585,930










LIABILITIES







Accounts payable

$

52,640,327


$

55,142,928


Advances from customers


43,172,088



48,829,289


Accrued expenses


17,467,815



22,229,514


Income and other taxes payable


27,265,975



20,929,485


Other payables 


12,532,968



11,228,553


Loans from employees


23,002,319



27,868,785


Loans payable


278,893,997



174,749,368


Deferred tax liability


14,625,370



14,521,613



Total liabilities


469,600,859



375,499,535










SHAREHOLDERS' EQUITY







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








Issued 35,438,079 and 35,438,079, respectively


35,438



35,438


Common stock subscribed


900,364



-


Additional paid in capital


50,176,083



49,972,174


Treasury Stock


(434,240)



(434,240)


Statutory reserves


9,903,457



9,903,457


Retained earnings


74,514,348



65,057,333


Accumulated other comprehensive income


28,421,330



24,552,233



Total shareholders' equity


163,516,780



149,086,395













Total liabilities and shareholders' equity

$

633,117,639


$

524,585,930










The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

SOURCE China Housing & Land Development, Inc.



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