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

-- Company Beats 3Q12 Revenue Guidance --

Nov 14, 2012, 06:00 ET from China Housing & Land Development, Inc.

XI'AN, China, Nov. 14, 2012 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended September 30, 2012.

Highlights for Q3 2012:

  • Total revenue in the third quarter of 2012 decreased 17.4% to $28.9 million from $35.0 million in the second quarter of 2012 and decreased 9.0% from $32.1 million in the third quarter of 2011.
  • Total gross floor area ("GFA") sales were 12,773 sq. meters during the third quarter of 2012, compared to 25,908 sq. meters in the second quarter of 2012 and 19,212 sq. meters in the third quarter of 2011.
  • Average residential selling price ("ASP") in the third quarter of 2012 was RMB 6,359, compared with RMB 5,705 in the second quarter of 2012, and RMB 7,326 in the third quarter of 2011.
  • Gross profit decreased 31.5% to $5.6 million from $8.1 million in the second quarter of 2012 and decreased 41.7% from $9.5 million in the third quarter of 2011. Third quarter 2012 gross margin was 19.2% compared to 23.2% in the second quarter of 2012 and 29.7% in the third quarter of 2011.
  • SG&A expenses as a percentage of total revenue increased to 12.9%, compared to 11.3% in the second quarter of 2012 and increased from 9.1% in the third quarter of 2011.
  • Operating income decreased 52.9% to $1.4 million from $3.1 million in the second quarter of 2012, and decreased 76.3% from $6.1 million in the second quarter of 2011.
  • Net income attributable to the Company in the third quarter of 2012 was $0.9 million, or $0.03 per diluted share.

Mr. Pingji Lu, China Housing's Chairman, commented, "Our stronger-than-expected top line financial results and healthy average selling price trends were indicative of continued improvement in Xi'an's real estate market. GFA sales were down sequentially largely because one core project, Puhua Phase II, was responsible for most of the revenue generation compared to past quarters when multiple projects contributed to our revenue stream.  Average selling prices at our projects increased 11% to RMB 6,359 compared with RMB 5,705 in the second quarter of 2012 and each of our three projects in the third quarter showed ASP improvement." 

"As we evaluate the opportunities in our business in the coming months and quarters ahead, we expected continued improvement to our performance. In our fourth quarter, we expect our revenue performance to be better than the first three quarters of 2012 as we have two more projects scheduled to come online in a stabilized pricing environment. Looking out to 2013, we have an additional four projects under planning that are expected to commence pre-sales in the next twelve months in addition to our two new projects in the last quarter of this year.  Together, these six new projects under planning represent a total of nearly 1.7 million square meters of unsold GFA. We believe the pricing environment will remain stable providing us with greater opportunities to increase our revenue and contract sales."

Total revenue in the third quarter of 2012 decreased 17.4% to $28.9 million from $35.0 million in the second quarter of 2012 and decreased 9.0% from $32.1 million in the third quarter of 2011.  In the third quarter of 2012, the majority of the Company's revenue came from its Puhua Phase II project with additional revenue from its Puhua Phase I and JunJing III projects.  Third quarter 2012 contract sales totaled $12.8 million compared to $24.8 million in the second quarter of 2012 and $21.9 million from the third quarter of 2011.  Total gross floor area ("GFA") sales were 12,773 sq. meters during the third quarter of 2012, compared to 25,908 sq. meters in the second quarter of 2012 and 19,212 sq. meters in the third quarter of 2011.  The Company's ASP in the third quarter of 2012 increased to RMB 6,359 compared to RMB 5,705 in the second quarter of 2012, and RMB 7,326 in the third quarter of 2011.

Gross profit for the three months ended September 30, 2012 was $5.6 million, representing a decrease of 31.5% from $8.1 million in the second quarter of 2012 and a 41.7% decrease from $9.5 million in the same period of 2011. Gross profit margin for the three months ended September 30, 2012 was 19.2%, which is below the 29.7% in the same period of 2011 and the 23.2% in the second quarter of 2012. The decrease in gross profit and gross profit margin was mainly due to  an adjustment of total estimated project costs, which the Company recorded the accumulated impact of these adjustments in the third quarter of 2012.

SG&A expense was $3.7 million in the third quarter of 2012, compared to $4.0 million in the second quarter of 2012 and $2.9 million in the third quarter of 2011. SG&A expense as a percentage of total revenue was 12.9%, compared to 11.3% in the second quarter of 2012 and 9.1% in the third quarter of 2011. The year-over-year increase in SG&A expense was primarily due to increased employee salaries, which contributed to the higher administrative expenses.

Operating income in the third quarter of 2012 was $1.4 million, or 5.0% of total revenue, decreased from $3.1 million, or 8.7% of total revenue, in the second quarter of 2012, and decreased from $6.1 million, or 19.0% of total revenue in the third quarter of 2011. The year-over-year decrease was mainly due to the reduced gross margin during the three months ended September 30, 2012 in connection with change of estimates in our projects.

Net income attributable to China Housing in the third quarter of 2012 was $0.9 million, or $0.03 per diluted share. This performance compares to a net income of $1.9 million in the second quarter of 2012.

Sequential Quarterly Revenue Breakout Comparison

Project

Q3 2012

Q2 2012

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   

3,814,640

2,474,085

1,716

9,157

12,314

98.9%

12,043,477

6,029,952

4,980

7,666

Puhua Phase Two

15,421,851

9,544,391

10,476

5,785

150,630

74.1%

14,541,350

15,973,143

19,343

5,228

JunJing III

4,863,938

753,382

539

8,878

1,738

91.4%

4,313,484

2,285,239

1,857

7,790

Projects Completed

JunJing II Phase One

-

-

-

-

817

100%

-

-

-

-

JunJing I

-

-

-

-

4,825

100%

(828,763)

(828,763)

(272)

19,938

Additional Project

18,897

18,897

42

2,888

-

-

-

-

-

Other Income

4,798,239

-

-

4,945,971

-

-

Total

28,917,565

12,790,755

12,773

6,359

164,682

- 

35,015,520

23,459,571

25,908

5,705

Q-o-Q Change

-17.4%

-45.5%

-50.7%

11.5%

Total debt outstanding as of September 30, 2012 was $198.3 million compared with $192.4 million on December 31, 2011. Net debt outstanding (total debt less cash and restricted cash) as of September 30, 2012 was $103.6 million compared with $64.7 million on December 31, 2011. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 43.3 percent on September 30, 2012 and 33.4 percent on December 31, 2011

Q3 2012

Projects in Planning

Unsold

GFA

First

Pre-sales

Scheduled

(m2)

Puhua Phase Three

177,193

Q4 2012

Ankang Project

243,152

Q4 2012

Park Plaza

141,822

Q1 2013

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 Fourth Quarter Outlook

Total recognized revenue for the 2012 fourth quarter is expected to reach $25.0 million to $27.0 million, compared to $28.9 million in the 2012 third quarter and $47.9 million in the same period of 2011. The Company is reporting revenues, which are subject to percentage of completion alterations.

Conference Call Information

Management will host a conference call at 8:00 am ET on November 14th, 2012.  Listeners may access the call by dialing #1-785-424-1826. 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 November 21st, 2012, by dialing #1-858-384-5517; passcode: 11700.

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 September 30, 2012 and December 31, 2011

(Unaudited)

 

September 30,

December 31,

2012

2011

 ASSETS

Cash and cash equivalents

$

9,945,932

$

22,014,953

Cash - restricted

84,810,432

105,720,400

Accounts receivable, net of allowance for doubtful

     accounts of $572,685 and $571,857, respectively

15,338,313

20,253,706

Other receivables, prepaid expenses and other assets, net

4,560,501

1,483,758

Real estate held for development or sale

227,267,782

163,482,316

Property and equipment, net

38,007,612

33,018,990

Advance to suppliers

2,500,544

889,965

Deposits on land use rights

42,375,958

65,286,137

Intangible assets, net

54,062,887

54,148,953

Goodwill

1,897,526

1,894,782

Deferred tax asset

-

308,248

Deferred financing costs

272,310

253,569

Total assets

$

481,039,797

$

468,755,777

LIABILITIES

Accounts payable

$

44,364,975

$

44,275,965

Advances from customers

51,804,582

57,541,251

Accrued expenses

11,973,368

8,380,041

Income and other taxes payable

16,885,902

14,386,133

Other payables

7,753,735

7,474,035

Loans from employees

19,911,533

14,887,431

Loans payable

142,332,730

148,402,690

Deferred tax liability

14,465,340

14,861,462

Warrants liability

-

4,162

Fair value of embedded derivatives

-

330,629

Convertible debt

9,893,765

9,165,591

Mandatorily redeemable non-controlling interests in Subsidiaries

26,183,964

19,935,482

Total liabilities

345,569,894

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

49,870,733

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

55,585,254

50,555,460

Accumulated other comprehensive income

22,555,106

22,121,194

Total shareholders' equity

135,469,903

129,110,905

Total liabilities and shareholders' equity

$

481,039,797

$

468,755,777

 

 

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

 

Interim Condensed Consolidated Statements of Income

For The Three and Nine Months Ended September 30, 2012 and 2011

(Unaudited)

 

3 Months

3 Months

9 Months

9 Months

September 30,

2012

September 30,

2011

September 30,

2012

September 30,

2011

REVENUES

Real estate sales

$

24,119,326

$

26,711,856

$

74,623,218

$

61,941,929

Other income

4,798,239

5,387,137

12,811,638

12,966,952

Total revenues

28,917,565

32,098,993

87,434,856

74,908,881

COST OF SALES

Cost of real estate sales

19,231,940

18,829,374

56,580,709

46,618,588

Cost of other revenue

4,134,356

3,743,196

10,166,314

7,927,620

Total cost of revenues

23,366,296

22,572,570

66,747,023

54,546,208

Gross margin

5,551,269

9,526,423

20,687,833

20,362,673

OPERATING EXPENSES

Selling, general, and administrative expenses

3,717,423

2,913,008

10,697,177

9,667,449

Stock-based compensation

96,438

96,438

909,434

114,258

Other (income) expenses

(22,503)

54,267

42,385

444,745

Interest expense

63,764

148,739

394,712

1,111,347

Accretion expense on convertible debt

254,023

217,391

728,174

761,195

Total operating expenses

4,109,145

3,429,843

12,771,882

12,098,994

CHANGES IN FAIR VALUE OF DERIVATIVES

Change in fair value of embedded derivatives

(109,344)

(60,705)

(330,628)

(1,522,937)

Change in fair value of warrants

(976)

58,937

(4,162)

(1,055,337)

Total changes in fair value of derivatives

(110,320)

(1,768)

(334,790)

(2,578,274)

Income before provision for income taxes 

1,552,444

6,098,348

8,250,741

10,841,953

Provision for income taxes

975,645

1,758,024

3,317,157

3,529,614

Recovery of deferred income taxes

(310,834)

(62,542)

(96,210)

(134,510)

NET INCOME

$

887,633

$

4,402,866

$

5,029,794

$

7,446,849

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

35,086,599

35,071,915

34,911,173

34,683,383

Diluted

35,086,599

36,687,624

34,911,173

36,299,092

NET INCOME PER SHARE

Basic

0.03

0.13

0.14

0.21

Diluted

0.03

0.12

0.14

0.18

 

 

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

 

 Interim Condensed Consolidated Statements of Comprehensive Income

For The Three and Nine Months Ended September 30, 2012 and 2011

(Unaudited)

 

3 Months

3 Months

9 Months

9 Months

September 30,

September 30,

September 30,

September 30,

2012

2011

2012

2011

NET INCOME

$

887,633

$

4,402,866

$

5,029,794

$

7,446,849

OTHER COMPREHENSIVE INCOME

Gain in foreign exchange

2,303,737

2,107,334

433,912

5,191,323

COMPREHENSIVE INCOME

$

3,191,370

$

6,510,200

$

5,463,706

$

12,638,172

SOURCE China Housing & Land Development, Inc.



RELATED LINKS

http://www.chldinc.com