Xinyuan Real Estate Co., Ltd. Announces Second Quarter 2015 Financial Results

Aug 12, 2015, 06:00 ET from Xinyuan Real Estate Co., Ltd.

BEIJING, Aug. 12, 2015 /PRNewswire/ -- Xinyuan Real Estate Co., Ltd. ("Xinyuan" or the "Company") (NYSE: XIN), an NYSE-listed real estate developer and property manager primarily in China and recently in other countries, today announced its unaudited financial results for the second quarter 2015.

Highlights for the Second Quarter 2015

  • Total second quarter revenue increased by 65.0% to US$275.1 million from US$166.7 million in the first quarter of 2015 and increased by 64.9% from US$166.8 million in the second quarter of 2014. Contract sales increased by 79.7% to US$332.3 million from US$184.9 million in the first quarter of 2015 and increased by 67.2% from US$198.7 million in the second quarter of 2014.
  • Total gross floor area ("GFA") sales increased by 93.4% to 218,700 square meters from 113,100 square meters sold in the first quarter of 2015 and increased by 46.2% from 149,600 square meters sold in the second quarter of 2014.
  • Selling, General and Administrative ("SG&A") expenses as a percent of total revenue decreased to 13.0% from 16.6% in the first quarter of 2015 and 19.3% in the second quarter of 2014.
  • Net income increased by 348.9% to US$20.2 million from US$4.5 million in the first quarter of 2015 and increased by 77.2% from US$11.4 million in the second quarter of 2014.
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders increased to US$0.27 from US$0.06 in the first quarter of 2015 and US$0.14 in the second quarter of 2014.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "We are very pleased to report strong operational and financial results for the second quarter compared to the same period last year as well as the prior quarter. There were eighteen active projects that contributed to our sales in the second quarter. We also commenced pre-sales of two new projects, Zhengzhou Xindo Park and Jinan Xin Central, which contributed 17.7% to our GFA sales."

"We continue to make good progress with our development activity outside of China, led by our Oosten project in Brooklyn, NYC. Additionally, we are exploring opportunities to develop real estate related products and services that will complement our core real estate development portfolio in China, which include property management services and a joint venture with a cinema company for movie theater development. We believe such initiatives can attract greater interest and support for our projects as well as enhance brand visibility and our overall competitive positioning."

"While we believe favorable government policies had a positive impact on our performance this quarter, overall market conditions remain uncertain for the second half of the year. We will continue to maximize our overall performance and are also pleased to reiterate comfort with our full year guidance of contract sales and net income growth of about 30% compared to the prior year."

Financial Results for the Second Quarter 2015

Contract Sales

Contract sales totaled US$332.3 million in the second quarter compared to US$184.9 million in the first quarter of 2015 and US$198.7 million in the second quarter of 2014. The Company's GFA sales were 218,700 square meters in the second quarter of 2015 versus 113,100 square meters in the first quarter of 2015 and 149,600 square meters in the second quarter of 2014. The average selling price ("ASP") per square meter sold was RMB9,309 (US$1,519) in the second quarter of 2015 versus RMB10,031 (US$1,634) in the first quarter of 2015 and RMB8,155 (US$1,329) in the second quarter of 2014.

The Company commenced pre-sales of two new projects in the second quarter of 2015, Jinan Xin Central and Zhengzhou Xindo Park, which contributed 17.7% of total GFA sales.

Breakdown of GFA Sales and ASPs by Project

Project

Q2 2014

Q1 2015

Q2 2015

Unsold

GFA

ASP

GFA

ASP

GFA

ASP

GFA

(m2 000)

(RMB)

(m2 000)

(RMB)

(m2 000)

(RMB)

(m2 000)

 Zhengzhou Xin City

35.0

6,086

5.5

13,995

9.4

15,992

3.7

 Zhengzhou Thriving Family

33.0

7,196

8.3

6,961

4.6

7,214

16.6

 Xingyang Splendid I

24.5

5,250

5.0

5,052

3.9

5,291

62.2

 Xingyang Splendid II

-

-

0.1

11,688

0.9

12,957

132.9

 Kunshan Royal Palace

6.3

10,081

14.3

8,672

28.8

9,120

151.8

 Suzhou Xin City

10.8

10,040

1.4

10,383

1.3

13,253

1.1

 Suzhou Lake Royal Palace

-

-

9.9

8,207

22.8

9,293

122.9

 Jinan Xinyuan Splendid

25.8

8,895

6.8

10,284

7.3

7,598

16.2

 Jinan Royal Palace

3.5

6,856

12.2

6,235

18.9

6,318

372.9

 Xuzhou Colorful City

2.7

15,546

3.9

9,008

8.7

8,449

68.8

 Beijing Xindo Park

6.1

24,431

12.2

22,934

8.1

26,720

44.5

 Chengdu Thriving Family

-

-

9.0

5,607

12.6

5,647

174.5

 Changsha Xinyuan Splendid

-

-

7.4

5,165

18.1

5,804

216.5

 Sanya Yazhou Bay No.1

-

-

2.0

13,404

1.6

12,753

106.8

 Xi'an Metropolitan*

-

-

9.5

6,268

28.1

6,359

252.9

 Shanghai Royal Palace

-

-

5.5

20,889

5.1

21,314

47.2

 Zhengzhou Xindo Park

-

-

-

-

10.2

9,593

133.3

 Jinan Xin Central

-

-

-

-

28.5

9,328

168.5

 Others

1.9

-

0.1

-

-0.2

-

4.5

   Total

149.6

8,155

113.1

10,031

218.7

9,309

2,097.8

* The Company owns 51% equity interest in a joint venture, Shaanxi Zhongmao Economy Development Co., Ltd. which develops Xi'an Metropolitan. The Company accounts for its investment under the equity method.

Revenue

In the second quarter of 2015, the Company's total revenue was US$275.1 million compared to US$166.7 million in the first quarter of 2015 and US$166.8 million in the second quarter of 2014.

Gross Profit

Gross profit for the second quarter of 2015 was US$60.9 million, or 22.2% of revenue, compared to a gross profit of US$48.0 million, or 28.8% of revenue, in the first quarter of 2015 and a gross profit of US$43.3 million, or 25.9% of revenue, in the second quarter of 2014.

Selling, General and Administrative Expenses

SG&A expenses were US$35.8 million for the second quarter of 2015 compared to US$27.7 million for the first quarter of 2015 and US$32.1 million for the second quarter of 2014. As a percentage of total revenue, SG&A expenses were 13.0% compared to 16.6% in the first quarter of 2015 and 19.3% in the second quarter of 2014.

Net Income

Net income for the second quarter of 2015 was US$20.2 million compared to US$4.5 million for the first quarter of 2015 and US$11.4 million for the second quarter of 2014. Net margin was 7.3% compared to 2.7% in the first quarter of 2015 and 6.8% in the second quarter of 2014. Diluted earnings per ADS were US$0.27 compared to US$0.06 per ADS in the first quarter of 2015 and US$0.14 per ADS in the second quarter of 2014.

Balance Sheet

As of June 30, 2015, the Company reported US$441.4 million in cash and cash equivalents (including restricted cash) compared to US$432.8 million as of March 31, 2015. Total debt outstanding was US$1,721.8 million, an increase of US$38.3 million compared to US$1,683.5 million at the end of the first quarter of 2015. The balance of the Company's real estate property under development at the end of the second quarter of 2015 was US$2,097.1 million compared to US$2,045.4 million at the end of the first quarter of 2015.

Real Estate Project Status in China

Below is a summary table of projects that were active and available for sale in the second quarter of 2015.

Project

GFA

Contract Sales

 Project Cost % Complete

(m2 000)

(US$ millions)

Total Active Project

Sold to date

Total Active Project

Sales to date

% Sold

 Zhengzhou Xin City

208.9

205.2

361.5

347.8

96.2%

82.3%

 Zhengzhou Thriving Family

131.5

114.9

146.2

135.1

92.4%

62.0%

 Xingyang Splendid I

118.8

56.6

92.0

47.4

51.5%

53.9%

 Xingyang Splendid II

135.6

2.7

133.0

5.8

4.4%

33.8%

 Kunshan Royal Palace

280.3

128.5

505.7

192.5

38.1%

67.1%

 Suzhou Xin City

127.3

126.2

187.3

184.6

98.6%

94.7%

 Suzhou Lake Royal Palace

169.6

46.7

365.7

67.8

18.5%

81.1%

 Jinan Xinyuan Splendid

572.0

555.8

807.4

791.2

98.0%

95.3%

 Jinan Royal Palace

449.2

76.3

696.8

79.2

11.4%

53.1%

 Xuzhou Colorful City

128.7

59.9

208.3

87.5

42.0%

63.1%

 Beijing Xindo Park

131.9

87.4

484.1

324.7

67.1%

90.9%

 Chengdu Thriving Family

211.9

37.4

355.7

34.1

9.6%

73.9%

 Changsha Xinyuan Splendid

252.7

36.2

366.6

32.3

8.8%

56.1%

 Sanya Yazhou Bay No.1

116.9

10.1

304.2

23.4

7.7%

55.5%

 Xi'an Metropolitan*

296.6

43.7

493.3

45.3

9.2%

48.1%

 Shanghai Royal Palace

57.8

10.6

301.3

36.2

12.0%

81.1%

 Zhengzhou Xindo Park

143.4

10.1

204.7

15.9

7.8%

39.9%

 Jinan Xin Central

197.0

28.5

401.7

43.4

10.8%

42.9%

 Others remaining GFA

4.5

 Total active projects

3,734.6

1,636.8

6,415.5

2,494.2

38.9%

68.1%

* The Company owns 51% equity interest in a joint venture, Shaanxi Zhongmao Economy Development Co., Ltd. which develops Xi'an Metropolitan. The Company accounts for its investment under the equity method.

As of June 30, 2015, the Company's total sellable GFA was approximately 2,937,600 square meters for active projects and under planning stage projects in China. Below is a summary of all of the Company's planning stage projects:

Unsold GFA

Pre sales

Scheduled

(m2 000)

Zhengzhou Nangangliu Project

371.7

Q3 2015

Newly Acquired Tianjin Land

263.5

Q4 2015

Xingyang Splendid III

37.4

Q4 2015

Zhengzhou Jiaotong college project

167.2

Q4 2015

Total projects under planning

839.8

Total active projects

2,097.8

Total all Xinyuan projects in China

2,937.6

Business Outlook

For the full year 2015, the Company reiterates its expectation that the full year contract sales and net income to increase about 30% compared to 2014. Please note that these estimates reflect the Company's current and preliminary view, which is subject to change.

Conference Call Information

The Company will hold a conference call at 8:00 am ET on August 12, 2015 to discuss second quarter 2015 results. Listeners may access the call by dialing:

US: 1-888-215-6894 International: 1-913-981-5537

A webcast will also be available through the Company's investor relations website at http://ir.xyre.com.

A replay of the call will be available through August 19, 2015 by dialing:

US: 1-877-870-5176 International: 1-858-384-5517 Access code: 3156292

About Xinyuan Real Estate Co., Ltd.

Xinyuan Real Estate Co., Ltd. ("Xinyuan") is an NYSE-listed real estate developer and property manager primarily in China and recently in other countries. In China, the Company develops and manages large scale, high quality real estate projects in over ten tier one and tier two cities, including Beijing, Shanghai, Zhengzhou, Jinan, Xi'an, Suzhou, among others. Xinyuan was one of the first Chinese real estate developers to enter the U.S. market and over the past few years has been active in real estate development in New York. The Company aims to provide comfortable and convenient real estate related products and services to middle-class consumers. 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, 2014. 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:

Xinyuan Real Estate Co., Ltd. Ms. May Shen Investor Relations Director Tel: +86 (10) 8588-9376 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

June 30,

March 31,

June 30,

2015

2015

2014

(unaudited)

(unaudited)

(unaudited)

Total revenue

275,066

166,718

166,824

Total costs of revenue

(214,122)

(118,737)

(123,565)

Gross profit

60,944

47,981

43,259

Selling and distribution expenses

(11,380)

(7,267)

(8,857)

General and administrative expenses

(24,395)

(20,398)

(23,258)

Operating income

25,169

20,316

11,144

Interest income

6,463

5,448

2,427

Interest expense

(4,492)

(5,459)

(7,417)

Net realized gain on short-term investments

645

117

497

Unrealized gain/(loss) on short-term investments

(3)

22

(90)

Other income

(36)

4,758

3,109

Exchange gains/(losses)

(31)

26

-

Share of gain/(loss) of an equity investee

566

(88)

(201)

Income from operations before income taxes

28,281

25,140

9,469

Income taxes

(8,115)

(20,632)

1,954

Net income

20,166

4,508

11,423

Net (income)/loss attributable to

non-controlling interest

15

(15)

-

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

20,181

4,493

11,423

Earnings per ADS:

Basic

0.27

0.06

0.15

Diluted

0.27

0.06

0.14

ADS used in computation:

Basic

73,522

73,513

76,343

Diluted

73,725

73,579

89,272

 

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)

 

Six months ended

June 30,

June 30,

2015

2014

(unaudited)

(unaudited)

Total revenue

441,784

393,236

Total costs of revenue

(332,859)

(290,608)

Gross profit

108,925

102,628

Selling and distribution expenses

(18,647)

(13,638)

General and administrative expenses

(44,793)

(42,752)

Operating income

45,485

46,238

Interest income

11,911

3,958

Interest expense

(9,951)

(16,058)

Net realized gain on short-term investments

762

497

Unrealized gain/ (loss) on short-term investments

19

(90)

Other income

4,722

3,109

Exchange gains/(losses)

(5)

-

Share of gain/(loss) of an equity investee

478

(418)

Income from operations before income taxes

53,421

37,236

Income taxes

(28,747)

(15,763)

Net income

24,674

21,473

Net income attributable to non-controlling interest

-

-

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

24,674

21,473

Earnings per ADS:

Basic

0.34

0.28

Diluted

0.34

0.25

ADS used in computation:

Basic

73,518

77,068

Diluted

73,619

90,047

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

June 30,

March 31,

December 31,

2015

2015

2014

(unaudited)

(unaudited)

(audited)

ASSETS

Current assets

Cash and cash equivalents

159,844

139,840

140,495

Restricted cash

281,585

292,962

368,874

Short-term investment

7,679

11,468

6,008

Accounts receivable

26,238

9,232

15,457

Other receivables

156,099

124,792

134,819

Restricted deposit

69,419

69,096

69,358

Deposits for land use rights

160,298

192,729

299,739

Other deposits and prepayments

218,385

201,462

152,290

Advances to suppliers

52,323

44,071

29,787

Real estate property held for sale

-

-

1,185

Real estate property development completed

11,518

11,948

12,309

Real estate property under development

2,097,123

2,045,431

1,714,575

Amounts due from related parties

81,998

99,458

125,374

Amounts due from employees

1,638

1,428

50

Other current assets

236

196

139

Total current assets

3,324,383

3,244,113

3,070,459

Real estate properties held for lease, net

77,310

77,123

69,224

Property and equipment, net

44,231

45,058

46,476

Other long-term investment

32,956

242

242

Investment in joint venture

4,709

4,122

4,226

Deferred tax assets

13,975

13,660

13,642

Deferred charges

16,359

18,139

16,677

Deposits for land use rights

3,271

-

-

Other assets

11,027

10,141

10,580

TOTAL ASSETS

3,528,221

3,412,598

3,231,526

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

June 30,

March 31,

December 31,

2015

2015

2014

(unaudited)

(unaudited)

(audited)

LIABILITIES AND

SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

366,097

291,227

351,506

Short-term bank loans and other debt

204,925

281,924

293,450

Customer deposits

152,586

147,032

107,163

Income tax payable

61,885

65,098

62,429

Deferred tax liabilities

108,704

108,747

91,202

Other payables and accrued liabilities

77,281

95,009

74,089

Payroll and welfare payable

3,594

3,593

18,457

Current portion of long-term bank loans and other debt

687,025

571,683

586,841

Current maturities of capital lease obligations

3,256

2,999

3,010

Redeemable non-controlling interests

4,089

4,070

4,486

Total current liabilities

1,669,442

1,571,382

1,592,633

Non- current liabilities

Long-term bank loans

84,598

43,633

52,296

Other long term debt

745,257

786,293

576,204

Deferred tax liabilities

14,404

12,174

9,825

Unrecognized tax benefits

11,259

13,964

14,005

Capital lease obligations, net of current maturities

21,632

22,696

23,500

Redeemable non-controlling interests

3,762

3,093

2,451

TOTAL LIABILITIES

2,550,354

2,453,235

2,270,914

Shareholders' equity

Common shares

16

16

16

Treasury shares

(20,696)

(20,696)

(20,696)

Additional paid-in capital

530,360

531,400

530,670

Statutory reserves

72,821

72,821

72,829

Retained earnings

290,561

274,068

273,255

Accumulated other comprehensive income

104,825

98,669

104,557

Total Xinyuan Real Estate Co., Ltd. shareholders' equity

977,887

956,278

960,631

Non-controlling interest

(20)

3,085

(19)

Total equity

977,867

959,363

960,612

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

3,528,221

3,412,598

3,231,526

SOURCE Xinyuan Real Estate Co., Ltd.



RELATED LINKS

http://www.xyre.com