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

3Q15 Contract Sales Up 84.7% YoY to US$309.7 Million

3Q15 Total GFA Sales Up 132.6% YoY to 233,300 Square Meters

3Q15 Net Income Up 609.4% YoY to US$22.7 Million

Nov 13, 2015, 05:30 ET from Xinyuan Real Estate Co., Ltd.

BEIJING, Nov. 13, 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 third quarter ended September 30, 2015.

Third Quarter 2015 Highlights

  • Total third quarter revenue increased by 88.9% to US$309.0 million from US$163.6 million in the third quarter of 2014 and increased by 12.3% from US$275.1 million in the second quarter of 2015.
  • Contract sales increased by 84.7% to US$309.7 million from US$167.7 million in the third quarter of 2014 and decreased by 6.8% from US$332.3 million in the second quarter of 2015.
  • Total gross floor area ("GFA") sales increased by 132.6% to 233,300 square meters from 100,300 square meters sold in the third quarter of 2014 and increased by 6.7% from 218,700 square meters sold in the second quarter of 2015.
  • Selling, General and Administrative ("SG&A") expenses as a percent of total revenue decreased to 15.8% from 21.8% in the third quarter of 2014 and increased from 13.0% in the second quarter of 2015.
  • Net income increased by 609.4% to US$22.7 million from US$3.2 million in the third quarter of 2014 and increased by 12.4% from US$20.2 million in the second quarter of 2015.
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders increased to US$0.31 from US$0.04 in the third quarter of 2014 and US$0.27 in the second quarter of 2015.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "We are very pleased with our operational performance and financial results in the third quarter. We benefited from the continued strong momentum in our business as well as favorable government policies in the real estate sector. There were nineteen active projects at the end of third quarter that contributed to our results along with four projects under-planning in China. Government policies initiated over the last year, which include easing monetary policy, relaxed home purchase restrictions and lower down payment requirements, have supported the markets we serve. We expect these government policies will continue to favorably impact our business in the fourth quarter."

"Looking ahead, we remain committed to delivering value to our shareholders. We intend to continue to pay quarterly cash dividends the remainder of this year and execute our share repurchase program as appropriate based on valuation," concluded Mr. Zhang.

Third Quarter 2015 Financial Results

Contract Sales

Contract sales totaled US$309.7 million in the third quarter compared to US$167.7 million in the third quarter of 2014 and US$332.3 million in the second quarter of 2015. The Company's GFA sales increased to 233,300 square meters in the third quarter of 2015 from 100,300 square meters in the third quarter of 2014 and 218,700 square meters in the second quarter of 2015. The average selling price ("ASP") per square meter sold was RMB8,196 (US$1,328) in the third quarter of 2015 compared to RMB10,272 (US$1,672) in the third quarter of 2014 and RMB9,309 (US$1,519) in the second quarter of 2015. The year-over-year and sequential decreases in ASPs were primarily attributable to stronger pre-sales in tier two cities that occurred in the third quarter of 2015.

The Company commenced pre-sales of one new project in the third quarter of 2015, Henan Xin Central, which contributed 10.9% of total GFA sales.

Breakdown of GFA Sales and ASPs by Project

Project

Q3 2014

Q2 2015

Q3 2015

Unsold

GFA

ASP

GFA

ASP

GFA

ASP

GFA

(m2000)

(RMB)

(m2000)

(RMB)

(m2000)

(RMB)

(m2000)

Zhengzhou Xin City

8.4

11,484

9.4

15,992

0.1

3,927

18.9

Zhengzhou Thriving Family

27.6

7,240

4.6

7,214

-

3,401

16.6

Xingyang Splendid I

6.5

5,366

3.9

5,291

4.2

5,149

58.0

Xingyang Splendid II

-

-

0.9

12,957

0.2

9,500

135.0

Kunshan Royal Palace

6.6

8,875

28.8

9,120

36.4

9,148

115.4

Suzhou Xin City

5.5

10,659

1.3

13,253

0.7

13,052

0.4

Suzhou Lake Royal Palace

2.0

11,095

22.8

9,293

39.0

9,446

83.8

Jinan Xinyuan Splendid

20.1

9,881

7.3

7,598

3.3

7,986

12.8

Jinan Royal Palace

18.1

6,428

18.9

6,318

26.2

6,294

346.7

Xuzhou Colorful City

-0.3

8,863

8.7

8,449

5.1

9,424

63.7

Beijing Xindo Park

5.3

27,233

8.1

26,720

0.6

20,439

43.9

Chengdu Thriving Family

0.4

5,296

12.6

5,647

9.7

5,401

164.8

Changsha Xinyuan Splendid

-

-

18.1

5,804

14.1

5,611

202.3

Sanya Yazhou Bay No.1

-

-

1.6

12,753

0.1

12,194

106.7

Xi'an Metropolitan*

-

-

28.1

6,359

35.8

6,350

217.1

Shanghai Royal Palace

-

-

5.1

21,314

5.4

21,606

41.8

Zhengzhou Xindo Park

-

-

10.2

9,593

4.8

9,584

129.5

Jinan Xin Central

-

-

28.5

9,328

22.3

9,019

146.4

Henan Xin Central I

(Zhengzhou Nangangliu project)

-

-

-

-

25.4

7,493

237.4

Others

0.1

-

-0.2

-

-0.1

-

4.6

Total

100.3

10,272

218.7

9,309

233.3

8,196

2,145.8

* 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 third quarter of 2015, the Company's total revenue increased by 88.9% to US$309.0 million from US$163.6 million in the third quarter of 2014 and increased by 12.3 % from US$275.1 million in the second quarter of 2015.

Gross Profit

Gross profit for the third quarter of 2015 was US$82.7 million, or 26.8% of revenue, compared to a gross profit of US$43.5 million, or 26.6% of revenue, in the third quarter of 2014 and a gross profit of US$60.9 million, or 22.2% of revenue, in the second quarter of 2015.

Selling, General and Administrative Expenses

SG&A expenses were US$48.8 million for the third quarter of 2015 compared to US$35.6 million for the third quarter of 2014 and US$35.8 million for the second quarter of 2015. As a percentage of total revenue, SG&A expenses were 15.8% compared to 21.8% in the third quarter of 2014 and 13.0% in the second quarter of 2015.

Net Income

Net income for the third quarter of 2015 increased by 609.4% to US$22.7 million from US$3.2 million for the third quarter of 2014 and increased by 12.4% from US$20.2 million for the second quarter of 2015. Net margin was 7.3% compared to 1.9% in the third quarter of 2014 and 7.3% in the second quarter of 2015. Diluted earnings per ADS increased to US$0.31 from US$0.04 per ADS in the third quarter of 2014 and US$0.27 per ADS in the second quarter of 2015.

Balance Sheet

As of September 30, 2015, the Company's cash and cash equivalents (including restricted cash) increased to US$555.9 million from US$441.4 million as of June 30, 2015. Total debt outstanding was US$1,793.1 million, an increase of US$71.3 million compared to US$1,721.8 million at the end of the second quarter of 2015. The balance of the Company's real estate property under development at the end of the third quarter of 2015 was US$2,012.2 million compared to US$2,097.1 million at the end of the second 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 third 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

224.3

205.4

386.9

345.7

89.4%

89.3%

Zhengzhou Thriving Family

131.5

114.9

163.0

134.5

82.5%

68.9%

Xingyang Splendid I

118.8

60.8

90.9

50.5

55.6%

62.3%

Xingyang Splendid II

137.8

2.8

136.0

6.0

4.4%

35.3%

Kunshan Royal Palace

280.3

164.9

502.0

245.1

48.8%

75.8%

Suzhou Xin City

127.2

126.8

185.7

184.6

99.4%

99.3%

Suzhou Lake Royal Palace

169.6

85.8

363.1

127.0

35.0%

86.1%

Jinan Xinyuan Splendid

571.9

559.1

802.0

789.7

98.5%

98.2%

Jinan Royal Palace

449.2

102.5

691.7

105.3

15.2%

54.4%

Xuzhou Colorful City

128.7

65.0

206.9

94.7

45.8%

69.6%

Beijing Xindo Park

131.9

88.0

480.6

324.4

67.5%

98.4%

Chengdu Thriving Family

211.9

47.1

353.2

42.3

12.0%

79.2%

Changsha Xinyuan Splendid

252.7

50.4

363.9

45.0

12.4%

60.9%

Sanya Yazhou Bay No.1

116.9

10.2

302.0

23.4

7.7%

60.5%

Xi'an Metropolitan*

296.6

79.5

489.6

81.7

16.7%

54.2%

Shanghai Royal Palace

57.8

16.0

299.1

55.0

18.4%

84.8%

Zhengzhou Xindo Park

144.5

15.0

203.2

23.3

11.5%

44.5%

Jinan Xin Central

197.2

50.8

398.7

75.7

19.0%

52.5%

Henan Xin Central I (Zhengzhou Nangangliu project)

262.8

25.4

374.6

30.9

8.2%

42.7%

Others remaining GFA

4.6

-

-

-

-

-

Total active projects

4,016.2

1,870.4

6,793.1

2,784.8

41.0%

71.8%

* 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.

As of September 30, 2015, the Company's total sellable GFA was approximately 2,721,800 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)

Tianjin Spring Royal Palace (Newly Acquired Tianjin Land)

263.5

Q4 2015

Zhengzhou Fancy City (Zhengzhou Jiaotong college project)

166.2

Q4 2015

Henan Xin Central II (Zhengzhou Nangangliu project)

108.9

Q1 2016

Xingyang Splendid III

37.4

Q1 2016

Total projects under planning

576.0

Total active projects

2,145.8

Total all Xinyuan projects in China

2,721.8

Real Estate Project Update in the U.S. and Other Initiatives

During the third quarter of 2015, the Company continued to make good progress in its Oosten project based in Brooklyn, New York. As of the end of the third quarter, the Company had pre-sold nearly 60% of its total units.

The Company's property management arm was awarded and ranked #16 among the top 100 property management companies in China by the National Property Management Association, as measured by overall competitiveness. The Company continues to explore real estate related products and services that can complement its core real estate development business.

Business Outlook

For the full year 2015, based on the third quarter results, the Company reiterates its expectation of full year contract sales and net income growth of approximately 30% compared to 2014.

Conference Call Information

The Company will hold a conference call at 7:30 am ET on November 13, 2015 to discuss third quarter 2015 results. Listeners may access the call by dialing:

US:

1-888-820-9410

International:

1-913-312-6694

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 November 20, 2015 by dialing:

US:

1-877-870-5176

International:

1-858-384-5517

Access code:

4595189

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: irteam@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

September 30,

June 30,

September 30,

2015

2015

2014

(unaudited)

(unaudited)

(unaudited)

Total revenue

308,954

275,066

163,612

Total costs of revenue

(226,288)

(214,122)

(120,154)

Gross profit

82,666

60,944

43,458

Selling and distribution expenses

(13,163)

(11,380)

(8,495)

General and administrative expenses

(35,673)

(24,395)

(27,145)

Operating income

33,830

25,169

7,818

Interest income

6,333

6,463

1,907

Interest expense

(5,021)

(4,492)

(5,954)

Net realized gain on short-term investments

80

645

(497)

Unrealized gain/(loss) on short-term investments

17

(3)

2,195

Other income

(35)

(36)

-

Exchange gains/(losses)

269

(31)

50

Share of gain/(loss) of an equity investee

974

566

(227)

Income from operations before income taxes

36,447

28,281

5,292

Income taxes

(13,756)

(8,115)

(2,110)

Net income

22,691

20,166

3,182

Net loss attributable to non-controlling interest

-

15

-

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

22,691

20,181

3,182

Earnings per ADS:

Basic

0.31

0.27

0.04

Diluted

0.31

0.27

0.04

ADS used in computation:

Basic

73,434

73,522

75,325

Diluted

73,499

73,725

88,165

 

 

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)

Nine months ended

September 30,

September 30,

2015

2014

(unaudited)

(unaudited)

Total revenue

750,738

556,848

Total costs of revenue

(559,147)

(410,762)

Gross profit

191,591

146,086

Selling and distribution expenses

(31,810)

(22,133)

General and administrative expenses

(80,466)

(69,897)

Operating income

79,315

54,056

Interest income

18,244

5,865

Interest expense

(14,972)

(22,012)

Net realized gain on short-term investments

842

-

Unrealized gain on short-term investments

36

2,105

Other income

4,687

3,109

Exchange gains

264

50

Share of gain/(loss) of an equity investee

1,452

(645)

Income from operations before income taxes

89,868

42,528

Income taxes

(42,503)

(17,873)

Net income

47,365

24,655

Net income attributable to non-controlling interest

-

-

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

47,365

24,655

Earnings per ADS:

Basic

0.64

0.32

Diluted

0.64

0.30

ADS used in computation:

Basic

73,490

76,481

Diluted

73,579

89,440

 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

September 30,

June 30,

December 31,

2015

2015

2014

(unaudited)

(unaudited)

(audited)

ASSETS

Current assets

Cash and cash equivalents

218,765

159,844

140,495

Restricted cash

337,117

281,585

368,874

Short-term investment

6,397

7,679

6,008

Accounts receivable

35,832

26,238

15,457

Other receivables

153,774

156,099

134,819

Restricted deposit

66,716

69,419

69,358

Deposits for land use rights

144,625

160,298

299,739

Other deposits and prepayments

233,378

218,385

152,290

Advances to suppliers

56,836

52,323

29,787

Real estate property held for sale

-

-

1,185

Real estate property development completed

27,273

11,518

12,309

Real estate property under development

2,012,161

2,097,123

1,714,575

Amounts due from related parties

71,245

81,998

125,374

Amounts due from employees

2,241

1,638

50

Other current assets

682

236

139

Total current assets

3,367,042

3,324,383

3,070,459

Real estate properties held for lease, net

74,439

77,310

69,224

Property and equipment, net

41,703

44,231

46,476

Other long-term investment

31,755

32,956

242

Investment in joint venture

5,429

4,709

4,226

Deferred tax assets

13,504

13,975

13,642

Deferred charges

14,197

16,359

16,677

Deposits for land use rights

3,144

3,271

-

Other assets

11,180

11,027

10,580

TOTAL ASSETS

3,562,393

3,528,221

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)

September 30,

June 30,

December 31,

2015

2015

2014

(unaudited)

(unaudited)

(audited)

LIABILITIES AND

SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

408,199

366,097

351,506

Short-term bank loans and other debt

235,966

204,925

293,450

Customer deposits

80,522

152,586

107,163

Income tax payable

60,989

61,885

62,429

Deferred tax liabilities

108,581

108,704

91,202

Other payables and accrued liabilities

98,141

77,281

74,089

Payroll and welfare payable

14,212

3,594

18,457

Current portion of long-term bank loans and other debt

743,520

687,025

586,841

Current maturities of capital lease obligations

3,129

3,256

3,010

Redeemable non-controlling interests

-

4,089

4,486

Total current liabilities

1,753,259

1,669,442

1,592,633

Non- current liabilities

Long-term bank loans

28,296

84,598

52,296

Other long term debt

785,318

745,257

576,204

Deferred tax liabilities

16,637

14,404

9,825

Unrecognized tax benefits

10,948

11,259

14,005

Capital lease obligations, net of current maturities

20,159

21,632

23,500

Redeemable non-controlling interests

3,616

3,762

2,451

TOTAL LIABILITIES

2,618,233

2,550,354

2,270,914

Shareholders' equity

Common shares

16

16

16

Treasury shares

(22,384)

(20,696)

(20,696)

Additional paid-in capital

529,978

530,360

530,670

Statutory reserves

72,821

72,821

72,829

Retained earnings

309,566

290,561

273,255

Accumulated other comprehensive income

54,182

104,825

104,557

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

944,179

977,887

960,631

Non-controlling interest

(19)

(20)

(19)

Total equity

944,160

977,867

960,612

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

3,562,393

3,528,221

3,231,526

 

 

SOURCE Xinyuan Real Estate Co., Ltd.



RELATED LINKS

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