Xinyuan Real Estate Co., Ltd. Announces First Quarter 2014 Financial Results -- 1Q14 Contract Sales Exceeds Mid-Point of Previous Guidance by 20.4% --

-- 1Q14 Revenue Exceeds Mid-Point of Previous Guidance by 14.6% --

BEIJING, May 16, 2014 /PRNewswire/ -- Xinyuan Real Estate Co., Ltd. ("Xinyuan" or "the Company") (NYSE: XIN), a residential real estate developer with a primary focus on high growth cities in China, today announced its unaudited financial results for the first quarter 2014.

Highlights for the First Quarter 2014

  • Total first quarter revenues were US$226.4 million, a 21.7% decrease from US$289.2 million recorded in the fourth quarter of 2013 and a 33.6% increase from US$169.4 million reported in the first quarter of 2013. First quarter revenue exceeded the mid-point of previous guidance of US$197.5 million by 14.6%.
  • Contract sales totaled US$273.9 million, a 27.4% decrease from US$377.5 million recorded in the fourth quarter of 2013 and a 53.6% increase from US$178.3 million recorded in the first quarter of 2013. First quarter contract sales exceeded the mid-point of previous guidance of US$227.5 million by 20.4%.
  • Total gross floor area ("GFA") sales were 127,100 square meters, a 47.4% decrease from 241,700 square meters sold in the fourth quarter of 2013, and a 2.0% increase from 124,600 square meters sold in the first quarter of 2013.
  • Selling, General, and Administrative ("SG&A") expenses as a percent of total revenue totaled 10.7% compared to 12.1% in the fourth quarter of 2013 and 7.3% in the first quarter of 2013.
  • Net income was US$10.1 million, a 68.0% decrease from US$31.6 million in the fourth quarter of 2013 and a 62.0% decrease from US$26.6 million reported in the first quarter of 2013.  First quarter net income slightly exceeded the mid-point of previous net income guidance.
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.12, compared to diluted net earnings per ADS of US$0.36 in the fourth quarter of 2013 and US$0.37 per ADS in the first quarter of 2013.
  • Cash and cash equivalents, including restricted cash, decreased by US$182.2 million to US$655.0 million as of March 31, 2014 from US$837.2 million as of December 31, 2013. Short and long term debt increased by US$136.2 million from US$811.0 million as of December 31, 2013 to US$947.2 million as of March 31, 2014.
  • Book value was US$11.85 per ADS as of March 31, 2014.
  • The Company repurchased 1.54 million ADSs at a total cost of approximately US$7.6 million in the first quarter.
  • The Board of Directors of the Company has approved the payment of a quarterly dividend of US$0.05 per ADS payable on June 12, 2014 to shareholders of record as of May 30, 2014.
  • The Company acquired three land parcels (for a total of three development projects) in Chengdu, Sanya and Changsha respectively, for a total GFA of 611,600 square meters.

Mr. Yong Zhang, Xinyuan's Chairman said, "We experienced another strong quarter of sales exceeding our contract sales and revenue forecast as market conditions were generally stable in the cities in which we conduct operations.  Of our five main projects this quarter, the majority experienced increases in average selling prices and our two main projects this quarter that experienced an ASP decrease were due to product mix.  Importantly, we did not reduce prices at our available units in the first quarter. We also commenced pre-sales of one new project Beijing Xindo Park and acquired three new land parcels during the first quarter, along with one additional land acquisition in Shanghai in April."

"As we look to the remaining quarters of the year, we expect our project activity will expand.  Three new projects in China are scheduled to launch pre-sales in the second quarter, and we expect greater levels of year-over-year growth in the second quarter and the second half of the year. Our New York Oosten project in Williamsburg is expected to start pre-sales in late May. We remain committed to investing in our business for future development and growth," concluded Mr. Zhang.

Financial Results for the First Quarter 2014

Contract Sales

Contract sales totaled US$273.9 million in the first quarter compared to US$377.5 million in the fourth quarter of 2013 and US$178.3 million in the first quarter of 2013. The Company's GFA sales were 127,100 square meters in the first quarter of 2014 versus 241,700 square meters in the fourth quarter of 2013 and 124,600 square meters in the first quarter of 2013. The average selling price ("ASP") per square meter sold was RMB13,181 (US$2,155) in the first quarter of 2014 versus RMB9,678 (US$1,562) in the fourth quarter of 2013 and RMB8,985 (US$1,431) in the first quarter of 2013.  The Company commenced pre-sales of the Beijing Xindo Park project in the first quarter with total saleable GFA of 132,400 square meters. Sales of Beijing Xindo Park contributed approximately 28.2% of GFA sales, and 44.6% of contract sales in the first quarter 2014.

Breakdown of GFA Sales and ASP's by Project










Q1 2013

Q4 2013

Q1 2014

Unsold


GFA

ASP

GFA

ASP

GFA

ASP

GFA

Project

(m2 000)

(Rmb)

(m2 000)

(Rmb)

(m2 000)

(Rmb)

(m2 000)

Zhengzhou Royal Palace

17.2

9,093

1.2

23,351

0.4

33,539

0.5

Zhengzhou Century East A

19.4

9,209

1.9

13,319

1.2

15,309

1.4

Zhengzhou Century East B

21.1

8,822

2.3

16,831

0.2

9,147

0.7

Zhengzhou Xin City

-

-

53.7

9,972

33.6

10,672

66.1

Kunshan Intl City Garden

18.3

8,519

8.8

11,209

1.1

12,887

2.4

Kunshan Royal Palace

-

-

42.5

9,265

7.0

10,615

238.9

Suzhou Xin City

-

-

52.6

8,577

19.4

9,369

25.4

Jinan Xinyuan Splendid

40.8

8,764

45.7

10,372

23.8

9,746

90.2

Xuzhou Colorful City

-

-

31.3

8,820

4.0

6,954

94.0

Beijing Xindo Park

-

-

-

-

35.8

20,867

96.6

Others

7.8

-

1.7

-

0.6

-

3.9

  Total

124.6

8,985

241.7

9,678

127.1

13,181

620.1

Revenue

In the first quarter of 2014, the Company's total revenue was US$226.4 million compared to US$289.2 million in the fourth quarter of 2013 and US$169.4 million in the first quarter of 2013.

Gross Profit

Gross profit for the first quarter of 2014 was US$59.4 million, or 26.2% of revenue, compared to a gross profit of US$94.9 million, or 32.8% of revenue, in the fourth quarter of 2013 and a gross profit of US$55.7 million, or 32.9% of revenue, in the first quarter of 2013. The gross margin decrease was mainly due to cost increases of two near completion projects and two lower margin projects which contributed 35% of total revenue in the first quarter.

Selling, General and Administrative Expenses

SG&A expenses were US$24.3 million for the first quarter of 2014 compared to US$35.1 million for the fourth quarter of 2013 and US$12.4 million for the first quarter of 2013. As a percentage of total revenue, SG&A expenses were 10.7% compared to 12.1% in the fourth quarter of 2013 and 7.3% in the first quarter of 2013. The decrease in SG&A expenses compared to the 2013 fourth quarter was mainly due to a fourth quarter year end performance based bonus payments and selling and marketing expenses related to robust sales in the fourth quarter of 2013.

Net Income

Net income for the first quarter of 2014 was US$10.1 million compared to US$31.6 million for the fourth quarter of 2013 and US$26.6 million for the same period in 2013. Net margin was 4.4%, compared to 10.9% in the fourth quarter of 2013 and 15.7% in the first quarter of 2013.  Diluted earnings per ADS were US$0.12, compared to US$0.36 per ADS in the fourth quarter of 2013 and to US$0.37 per ADS in the same period in 2013.

Balance Sheet

As of March 31, 2014, the Company reported US$655.0 million in cash and cash equivalents (including restricted cash) compared to US$837.2 million as of December 31, 2013. Total debt outstanding was US$947.2 million, an increase of US$136.2 million compared to US$811.0 million at the end of the fourth quarter of 2013. The cash decrease was largely due to the payment of US$376.3 million for land acquisitions and deposits, partially offset by the proceeds from bank loans and other debts in the aggregate of US$192.4 million. The balance of the Company's real estate property under development at the end of the first quarter was US$868.7 million compared to US$932.5 million at the end of the fourth quarter of 2013. 

Project Status

Below is a summary table of projects that were active and available for sale in the first quarter of 2014.


GFA

Contract Sales

Project
Cost % Complete

(m2 000)

(US$ millions)

Project

Total
Active Projects

Sold to date

Total
Active Projects

Sales to date

% Sold



Zhengzhou Royal Palace

132.4

131.9

241.7

238.9

98.8%

91.0%

Zhengzhou Century East A

77.3

75.9

127.5

124.9

98.0%

95.0%

Zhengzhou Century East B

166.5

165.8

247.1

246.0

99.6%

96.9%

Zhengzhou Xin City

185.0

118.9

330.1

195.7

59.3%

62.5%

Kunshan Intl City Garden

497.9

495.5

613.4

608.8

99.3%

100.0%

Kunshan Royal Palace

288.4

49.5

511.3

76.4

14.9%

41.3%

Suzhou Xin City

126.8

101.4

187.1

142.6

76.2%

71.6%

Jinan Xinyuan Splendid

565.2

475.0

795.3

669.5

84.2%

85.2%

Xuzhou Colorful City

129.3

35.3

198.9

49.6

24.9%

45.1%

Beijing Xindo Park

132.4

35.8

461.0

122.3

26.5%

68.9%

Others remaining GFA

3.9






  Total active projects

2,305.1

1,685.0

3,713.4

2,474.7

66.6%

78.0%

As of May 15, 2014, the Company's total saleable GFA was approximately 2,457,700 square meters for active projects and under planning stage projects. Below is a summary of all of our planning stage projects:


Unsold GFA

(m2 000)

Pre sales
Scheduled

Zhengzhou Xindo Park

293.4

Q2 2014

Suzhou Lake Royal Palace

171.9

Q2 2014

Xingyang Splendid

240.2

Q2 2014

New York Oosten

37.1

Q2 2014

Jinan Royal Palace

420.5

Q3 2014

Newly Acquired Chengdu Land

225.0

Q4 2014

Newly Acquired Sanya Land

118.2

Q1 2015

Newly Acquired Shanghai Land

62.9

Q1 2015

Newly Acquired Changsha Land

268.4

Q1 2015

Total projects under planning

1,837.6


Total active projects

620.1


Total all Xinyuan projects

2,457.7


Second Quarter Outlook

The Company expects contract sales in the second quarter of 2014 to reach approximately US$277 million.  Revenue is expected to total US$230 million in the second quarter while net income is expected to reach US$23 million which includes certain tax expense benefits to be realized in the second quarter. 

Conference Call Information

The Company will hold a conference call at 8:00 am ET on May 16, 2014 to discuss first quarter 2014 results. Listeners may access the call by dialing 1-913-312-1427. A webcast will also be available through the Company's investor relations website at http://www.xyre.com. A replay of the call will be available through May 23, 2014 by dialing 1-858-384-5517, access code: 6996086

About Xinyuan Real Estate Co., Ltd.

Xinyuan Real Estate Co., Ltd. ("Xinyuan") (NYSE: XIN) is a developer of large scale, high quality residential real estate projects aimed at providing middle-income consumers with a comfortable and convenient community lifestyle. In China, Xinyuan primarily focuses its development projects in Tier II cities, including Hefei, Jinan, Kunshan, Suzhou, Zhengzhou, Xuzhou and Chengdu. The Company's U.S. development arm, XIN Development Group International, Inc. ,is a pioneer amongst Chinese real estate residential developers, entering the US market in 2012.  Xinyuan is the first real estate developer from China to be listed on the New York Stock Exchange. For more information, please visit http://www.xyre.com.

Forward Looking Statements

Certain statements in this press release constitute "forward-looking statements". These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995.  These forward-looking statements includes statements about estimated financial performance, sales performance and activity, among others and can generally be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements.  Statements that are not historical statements are forward-looking statements.  Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including, but not limited to, our ability to continue to implement our business model successfully; our ability to secure adequate financing for our project development; our ability to successfully sell or complete our property projects under construction and planning; our ability to enter into new geographic markets and expand our operations; the marketing and sales ability of our third-party sales agents; the performance of our third-party contractors; the impact of laws, regulations and policies relating to real estate developers and the real estate industry in the countries in which we operate; ; our ability to obtain permits and licenses to carry on our business in compliance with applicable laws and regulations; competition from other real estate developers; the growth of the real estate industry in the markets in which we operate; fluctuations in general economic and business conditions in the markets in which we operate; and other risks outlined in our public filings with the Securities and Exchange Commission, including our annual report on Form 20-F for the year ended December 31, 2013.  Except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statement is made.

Notes to Unaudited Financial Information

This release contains unaudited financial information which is subject to year-end audit adjustments. Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between our audited financial statements and this unaudited financial information.

For more information, please contact:

In China:

Ms. Helen Zhang
Interim Chief Financial Officer
Tel: +86 (10) 8588-9398
Email: irmanager@xyre.com

ICR, LLC
In U.S.: +1-646-308-1472
In China: +86 (10) 6583-7511
Email: William.zima@icrinc.com







XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All US$ amounts and number of shares data in thousands, except per share data)








Three months ended


March 31,


December 31,


March 31,


2014


2013


2013


(unaudited)


(unaudited)


(unaudited)







Total revenue

226,412


289,160


169,429







Total costs of revenue

(167,043)


(194,228)


(113,762)

Gross profit

59,369


94,932


55,667







Selling and distribution expenses

(4,781)


(9,443)


(2,788)

General and administrative expenses

(19,494)


(25,650)


(9,574)







Operating income

35,094


59,839


43,305







Interest income

1,531


3,084


1,635

Interest expense

(8,641)


(6,411)


-

Other income

-


1,539


-

Share of loss of equity investee

(217)


(117)


-







Income from operations before income taxes

27,767


57,934


44,940







Income taxes

(17,717)


(26,303)


(18,325)







Net income

10,050


31,631


26,615







Net income attributable to Xinyuan Real Estate Co., Ltd. shareholders

10,050


31,631


26,615







Earnings per ADS:






  Basic

0.13


0.41


0.37

  Diluted

0.12


0.36


0.37

ADS used in computation:






  Basic

77,801


77,616


71,043

  Diluted

90,810


91,097


72,292








 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(All US$ amounts and number of shares data in thousands)




March 31,


December  31,



2014


2013



(unaudited)


(audited)

ASSETS





Current assets





Cash and cash equivalents


348,096


587,119

Restricted cash


306,857


250,098

Accounts receivable


24,986


8,528

Other receivables


143,813


10,593

Restricted deposit


11,411


11,514

Deposits for land use right


480,739


297,389

Other deposits and prepayments


106,026


103,790

Advances to suppliers


20,175


15,317

Real estate property held for sale


5,524


5,524

Real estate property development completed


17,036


21,260

Real estate property under development


868,679


932,519

Amounts due from related party


1,301


820

Amounts due from employees


586


59

Other current assets


34


-






Total current assets


2,335,263


2,244,530






Real estate properties held for lease, net


61,534


60,410

Property and equipment, net


45,688


46,706

Other long-term investment


242


242

Investment in joint venture


5,676


5,945

Deferred tax assets


10,593


10,191

Deferred charges


8,699


9,049

Other assets


4,940


5,028






TOTAL ASSETS


2,472,635


2,382,101











LIABILITIES AND SHAREHOLDERS' EQUITY





Current liabilities





Accounts payable


171,161


194,403

Short-term bank loans and other debts


113,782


23,291

Customer deposits


81,805


75,285

Income tax payable


106,833


121,642

Deferred tax liabilities


85,821


78,958

Other payables and accrued liabilities


79,881


73,446

Payroll and welfare payable


4,610


19,638

Current portion of long-term bank loans and other debt


231,015


217,964

Current maturities of capital lease obligations


2,721


2,746






Total current liabilities


877,629


807,373






Non- current liabilities





Long-term bank loans


61,768


32,804

Other long term debts


540,662


536,943

Deferred tax liabilities


9,385


9,385

Unrecognized tax benefits


16,167


16,314

Capital lease obligations, net of current  maturities


25,742


26,646

TOTAL LIABILITIES


1,531,353


1,429,465






Shareholders' equity





Common shares


16


16

Treasury shares


(10,696)


(3,085)

Additional paid-in capital


535,169


534,937

Statutory reserves


68,547


68,547

Retained earnings


250,447


244,310

Accumulated other comprehensive income


97,799


107,911

TOTAL EQUITY


941,282


952,636






TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


2,472,635


2,382,101

SOURCE Xinyuan Real Estate Co., Ltd.



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