Xinyuan Real Estate Co., Ltd. Announces Unaudited Third Quarter 2013 Financial Results

-- 3Q13 Contract Sales Exceeds Previous Guidance by 16.0% --

-- 3Q13 Revenue Exceeds Previous Guidance by 12.0% --

-- Raising 2013 Revenue, Contract Sales and Net Income Guidance Forecast --

Nov 11, 2013, 03:10 ET from Xinyuan Real Estate Co., Ltd.

BEIJING, Nov. 8, 2013 /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 third quarter of 2013.

Highlights for the Third Quarter 2013

  • Total third quarter revenues were US$240.7 million, a 21.3% increase from US$198.5 million recorded in the second quarter of 2013 and a 6.5% increase from US$226.1 million reported in the third quarter of 2012. Third quarter revenue exceeded the previous guidance of US$215.0 million by 12.0%.
  • Contract sales totaled US$243.7million, a 24.3% increase from US$196.0 million recorded in the second quarter of 2013 and a 6.0% increase from US$229.8 million recorded in the third quarter of 2012. Third quarter contract sales exceeded previous guidance of US$210.0 million by 16.0%.
  • Total gross floor area ("GFA") sales were 151,900 square meters, a 3.2% increase from 147,200 square meters sold in the second quarter of 2013, and an 11.0% decrease from 170,700 square meters sold in the third quarter of 2012.
  • Selling, General, and Administrative ("SG&A") expenses as a percent of total revenue totaled 9.6% compared to 7.4% in the second quarter of 2013 and 6.6% in the third quarter of 2012.
  • Net income was US$28.7 million, a 27.2% decrease from US$39.4 million in the second quarter of 2013 and a 10.0% decrease from US$31.9million reported in the third quarter of 2012.
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.39, compared to diluted net earnings per ADS of US$0.54 in the second quarter of 2013 and US$0.44 per ADS in the third quarter of 2012.
  • Cash and cash equivalents, including restricted cash, decreased by US$78.7 million from US$874.7 million as of June 30, 2013 to US$796.0 million as of September 30, 2013. Short and long term debt increased by US$4.9 million from US$510.7 million as of June 30, 2013 to US$515.6 million as of September 30, 2013.
  • Book value was US$11.55 per ADS, as of September 30, 2013.
  • The Board of Directors of the Company has approved the payment of a quarterly dividend of US$0.05 per ADS payable on November 29, 2013 to shareholders of record as of November 18, 2013.

Mr. Yong Zhang, Xinyuan's Chairman said, "The third quarter was exceptionally strong for Xinyuan as we exceeded our quarterly revenue and contract sales forecasts and came in at the high end of our range for our net income forecast. These results were driven by solid operational execution within our existing development projects, including two new projects launched in the third quarter, and aided by a robust housing market in the cities in which we operate."

"The past few months have been an eventful period for Xinyuan. We've created a strong future revenue pipeline by adding five new projects to our development portfolio in the last two months alone. We also strengthened our management team through the addition of industry veterans Xinqi Wang as CEO and Kevin Wei as CFO. These talented and highly experienced executives will contribute significantly to Xinyuan's operational and financial performance and help realize our full growth potential."

"During the third quarter, we received an investment of US$108.6 million from TPG, one of the world's leading private investment firms in the form of common equity and convertible debt. These investment proceeds will assist us in expanding our land portfolio and developing our internal infrastructure and operational capabilities to drive future growth. We look forward to a fruitful long term relationship with our new investor TPG."

"Our Board recently approved the third quarterly cash dividend payment for 2013 of $0.05 per ADS. As we go forward, we are excited by our expansion opportunities and continue to focus on increasing our growth and profit opportunities for our shareholders."

Financial Results for the Third Quarter 2013

Contract Sales

Contract sales totaled US$243.7 million in the third quarter compared to US$196.0 million in the second quarter of 2013 and US$229.8 million in the third quarter of 2012. The Company's GFA sales were 151,900 square meters in the third quarter of 2013 versus 147,200 square meters in the second quarter of 2013 and 170,700 square meters in the third quarter of 2012. The average selling price ("ASP") per square meter sold was RMB9,976 (US$1,604)in the third quarter of 2013 versus RMB8,312 (US$1,332) in the second quarter of 2013 and RMB8,505 (US$1,346) in the third quarter of 2012.

Two new projects became available for sale in the third quarter of 2013, namely Suzhou XIN City with 127,000 square meters and Zhengzhou XIN City with 186,000 square meters. Sales were brisk for both projects and they contributed approximately 40.1% of XIN's GFA sales in the quarter.

Breakdown of GFA Sales and ASP's by Project

Q3 2012

Q2 2013

Q3 2013

Unsold

GFA

ASP

GFA

ASP

GFA

ASP

GFA

Project

(m2 000)

(Rmb)

(m2 000)

(Rmb)

(m2 000)

(Rmb)

(m2 000)

Zhengzhou Royal Palace

19.6

10,303

18.6

9,269

12.9

10,767

1.9

Zhengzhou Century East A

-

-

27.2

10,451

13.7

10,708

4.5

Zhengzhou Century East B

30.8

8,355

3.9

15,030

7.9

14,058

3.2

Zhengzhou Xin City

-

-

-

-

31.6

9,587

154.3

Kunshan Intl City Garden

41.7

7,851

3.8

9,378

4.5

11,419

12.3

Suzhou Xin City

-

-

-

-

29.3

8,160

97.2

Jinan Xinyuan Splendid

43.6

7,956

91.0

7,062

48.5

10,021

159.7

Others

35.0

-

2.7

-

3.5

-

7.1

  Total

170.7

8,505

147.2

8,312

151.9

9,976

440.2

Revenue

In the third quarter of 2013, the Company's total revenue was US$240.7 million compared to US$198.5 million in the second quarter of 2013 and US$226.1 million in the third quarter of 2012.

Gross Profit

Gross profit for the third quarter of 2013 was US$78.5 million, or 32.6% of revenue, compared to a gross profit of US$69.9 million, or 35.2% of revenue, in the second quarter of 2013 and a gross profit of US$65.5 million, or 29.0% of revenue, in the third quarter of 2012.

The decrease of gross profit as a percentage of revenue compared to last quarter was largely due to favorable project completion settlements in the previous quarter that resulted in lower costs.

Selling, General and Administrative Expenses

SG&A expenses were US$23.0 million for the third quarter of 2013 compared to US$14.7 million for the second quarter of 2013 and US$14.9 million for the third quarter of 2012. As a percentage of total revenue, SG&A expenses were 9.6% compared to 7.4% in the second quarter of 2013 and 6.6% in the third quarter of 2012. The increase of SG&A expenses as a percentage of revenue compared to previous quarter was due to more employee hiring, performance and retention bonuses and higher promotional spending on our two new project launches.

Net Income

Net income for the third quarter of 2013 was US$28.7 million compared to US$39.4 million for the second quarter of 2013 and US$31.9 million for the same period in 2012. Net margin was 11.9%, compared to 19.8% in the second quarter of 2013 and 14.1% in the third quarter of 2012. Diluted earnings per ADS were US$0.39, compared to US$0.54 per ADS in the second quarter of 2013 and to US$0.44 per ADS in the same period in 2012.

Balance Sheet

As of September 30, 2013, the Company reported US$796.0 million in cash and cash equivalents (including restricted cash) compared to US$874.7 million as of June 30, 2013 as a result of substantial land purchases made in the quarter, which offset the net proceeds of the TPG investment transaction. Total debt outstanding was US$515.6 million, an increase of US$4.9 million compared to US$510.7 million at the end of the second quarter of 2013. The balance of the Company's real estate property under development at the end of the third quarter was US$534.7 million compared to US$605.7 million at the end of the second quarter of 2013.

Project Status

Below is a summary table of projects that were active and available for sale in the third quarter of 2013.

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

132.2

130.3

236.6

228.6

96.6%

84.0%

Zhengzhou Century East A

77.3

72.8

124.7

115.9

92.9%

88.0%

Zhengzhou Century East B

166.5

163.3

242.3

235.5

97.2%

94.6%

Kunshan Intl City Garden

497.9

485.6

602.3

580.9

96.5%

99.9%

Jinan Xinyuan Splendid

565.2

405.5

773.4

545.2

70.5%

78.9%

Suzhou Xin City

126.5

29.3

170.8

38.5

22.5%

15.5%

Zhengzhou Xin City

185.9

31.6

306.6

48.7

15.9%

12.3%

Others remaining GFA

7.1

  Total active projects

1,758.6

1,318.4

2,456.7

1,793.3

73.0%

82.4%

As of September 30, 2013, the Company's total sellable GFA was approximately 1,581,100 square meters for active projects and pre-revenue stage projects. Below is a summary of all our planning stage projects:

Unsold

GFA

Pre sales

Scheduled

(m2 000)

 Xuzhou Colorful City

117.5

Q4 2013

Beijing Xindo Park

117.7

Q4 2013

Newly Acquired Kushan Land

284.0

Q4 2013

Newly Acquired Erqi Land

293.4

Q2 2014

Newly Acquired Suzhou Land

171.9

Q2 2014

Newly Acquired Xingyang Land

119.3

Newly Acquired New York Land

37.1

Total projects under planning

1,140.9

Total active projects

440.2

Total all Xinyuan projects

1,581.1

Fourth Quarter and Full Year 2013 Outlook

The Company expects fourth quarter contract sales to reach approximately US$310 to US$320 million. Fourth quarter revenue is expected to total US$255 to US$265 million while net income is projected at US$20 to US$30 million.

With the addition of several new projects to the Company's active project list during the fourth quarter, the Company has raised its full year 2013 financial forecast.

Contract sales for the full year 2013 are now expected to reach US$930 to US$940 million. Revenue under the percentage of completion method is expected to reach US$860 to US$870 million, while net income is expected to exceed US$115 million for the year.

Conference Call Information

Xinyuan's management will host an earnings conference call at 7:30 am ET on November 8, 2013 to discuss third quarter 2013 results. Listeners may access the call by dialing 1-719-325-2308. 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 November 15, 2013 by dialing 1-858-384-5517, access code: 9179858.

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. ("XIN") 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 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 China and, to the extent we expand operations into other countries, such as the U.S., the laws, regulations and policies of such countries; 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 China, particularly Tier II and Tier III cities, and in our targeted areas in the U.S.; fluctuations in general economic and business conditions in China, and, to the extent we expand operation into other countries, such as the U.S., the general economic and business conditions in such countries; 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, 2012.  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:

Mr. Kevin Wei Chief Financial Officer Tel: +86-10-8588-9278

Ms. Helen Zhang Financial Controller Tel: +86-10-8588-9255 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

September 30,

June 30,

September 30,

2013

2013

2012

(unaudited)

(unaudited)

(unaudited)

Total revenue

240,665

198,484

226,062

Total cost of revenue

(162,152)

(128,598)

(160,576)

Gross profit

78,513

69,886

65,486

Selling and distribution expenses

(5,633)

(2,860)

(5,220)

General and administrative expenses

(17,397)

(11,877)

(9,667)

Operating income

55,483

55,149

50,599

Interest income

4,085

2,877

2,827

Interest expense

(5,608)

(4,844)

-

Income from operations before income taxes

53,960

53,182

53,426

Income taxes

(25,212)

(13,820)

(21,498)

Net income

28,748

39,362

31,928

Net income attributable to Xinyuan Real Estate Co.,

Ltd. shareholders

28,748

39,362

31,928

Earnings per ADS:

  Basic

0.40

0.55

0.44

  Diluted

0.39

0.54

0.44

ADS used in computation:

  Basic

71,360

71,256

71,839

  Diluted

73,480

72,242

72,076

 

XINYUAN REAL ESTATE CO., LTD. AND 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,

2013

2012

(unaudited)

(unaudited)

Revenue

608,578

651,705

Cost of revenue

(404,512)

(459,502)

Gross profit

204,066

192,203

Selling expenses

(11,281)

(13,517)

General and administrative expenses

(38,848)

(29,134)

Operating income

153,937

149,552

Interest income

8,596

6,078

Interest expense

(10,450)

-

Income from operations before income taxes

152,083

155,630

Income taxes

(57,357)

(31,091)

Net income

94,726

124,539

Less: net income attributable to non-controlling interest

-

1,110

Net income attributable to shareholders

94,726

123,429

Earnings per ADS:

  Basic

1.33

1.70

  Diluted

1.31

1.70

ADS used in computation:

  Basic

71,266

72,521

  Diluted

72,344

72,750

 

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,

2013

2013

2012

(unaudited)

(unaudited)

(audited)

ASSETS

Current assets

Cash and cash equivalents

562,019

635,800

496,205

Restricted cash

233,951

238,926

145,730

Accounts receivable

17,297

2,312

3,076

Other receivables

16,619

11,445

27,413

Other deposits and prepayments

404,389

231,289

105,427

Advances to suppliers

25,041

18,597

11,028

Real estate property held for sale

5,394

6,498

11,191

Real estate property development completed

34,214

4,780

3,158

Real estate property under development

534,688

605,673

722,819

Other current assets

198

-

295

Total current assets

1,833,810

1,755,320

1,526,342

Real estate properties held for lease, net

53,443

16,360

23,204

Property and equipment, net

45,560

1,850

1,576

Restricted deposit

11,418

11,362

11,169

Other long-term investment

249

247

242

Deferred tax asset

1,404

1,242

1,599

Deferred charges

4,878

4,834

-

Other assets

2,260

2,013

2,249

TOTAL ASSETS

1,953,022

1,793,228

1,566,381

 

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,

2013

2013

2012

(unaudited)

(unaudited)

(audited)

LIABILITIES AND

SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

184,763

171,677

241,894

Short-term bank loans and other debt

80,223

129,198

113,066

Customer deposits

92,578

78,636

50,201

Income tax payable

77,502

68,972

75,877

Deferred tax liabilities

40,857

33,029

13,612

Other payables and accrued liabilities

68,100

57,978

64,721

Payroll and welfare payable

7,872

7,500

9,663

Current portion of long-term bank loans and other debt

100,846

97,917

166,082

Current maturities of capital lease obligations

2,723

-

-

Total current liabilities

655,464

644,907

735,116

Non- current liabilities

Long-term bank loans

58,796

83,554

35,000

Other long term debt

275,761

200,000

-

Deferred tax liabilities

8,253

6,733

5,885

Unrecognized tax benefits

9,105

7,279

8,842

Capital lease obligations, net of

current  maturities

28,619

-

-

TOTAL LIABILITIES

1,035,998

942,473

784,843

Shareholders' equity

Common shares

15

15

15

Treasury shares

(3,086)

(19,434)

(13,667)

Additional paid-in capital

533,647

513,904

511,964

Statutory reserves

49,622

49,622

49,622

Retained earnings

336,826

306,648

233,604

TOTAL EQUITY

917,024

850,755

781,538

TOTAL LIABILITIES AND

SHAREHOLDERS' EQUITY

1,953,022

1,793,228

1,566,381

 

SOURCE Xinyuan Real Estate Co., Ltd.



RELATED LINKS

http://www.xyre.com