China Housing & Land Development Inc. Announces Second Quarter 2015 Financial Results

Aug 14, 2015, 06:31 ET from China Housing & Land Development Inc.

XI'AN, China, Aug. 14, 2015 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company") (NASDAQ: CHLN) today announced its financial results for the quarter ended June 30, 2015.

Highlights for Q2 2015:

  • Total revenue in the second quarter of 2015 was $36.2 million compared to $23.8 million in the first quarter of 2015 and $44.1 million in the second quarter of 2014.
  • Total gross floor area ("GFA") sales were 35,939 sq. meters during the second quarter of 2015, compared with 26,771 sq. meters in the first quarter of 2015 and 30,408 sq. meters in the second quarter of 2014.
  • Average residential selling price ("ASP") in the second quarter of 2015 was RMB6,061 compared with RMB5,747 in the first quarter of 2015, and RMB6,493 in the second quarter of 2014.
  • Gross profit was $4.7 million in the second quarter of 2015 compared to $3.9 million in the first quarter of 2015 and $(816,509) in the second quarter of 2014. Gross margin in the second quarter 2015 was 12.9%, compared with 16.2% in the first quarter of 2015 and (1.9)% in the second quarter of 2014.
  • SG&A expenses as a percentage of total revenue was 10.0%, compared to 13.6% in the first quarter of 2015 and 8.8% in the second quarter of 2014.
  • Operating income was $128,519 in the second quarter of 2015 compared to an operating loss of $464 thousand in the first quarter of 2015, and operating loss of $6.6 million in the second quarter of 2014.
  • Net loss attributable to the Company in the second quarter of 2015 was $19.0 million, or $(2.73) per diluted share, compared to net loss of $479 thousand, or $(0.01) per diluted share, in the first quarter of 2015 and $6.8 million, or $(0.98) per diluted share, in the second quarter of 2014.

Mr. Pingji Lu, China Housing's Chairman, commented, "While we were pleased to exceed our revenue guidance forecast in the second quarter, the real estate market in Xi'an remains challenging. There remains a gap in supply versus demand resulting in higher levels of inventory which will take time to work through.  To address the current market environment, we increased our promotional efforts in the second quarter as well as concentrated our sales efforts on our enhanced unit offerings. This resulted in higher than forecasted contract sales, more normalized business operations, and better controlled risk for our business in the second quarter."

"We are also encouraged by both national and local government efforts to improve the supply-demand imbalance. Such policies can result in increased purchase activity for our property units over time. Looking at the second half of the year, we plan to actively sell our housing stock and adjust our promotional strategy on a per-project basis to attract greater sales volume. We will also evaluate our new projects under planning to ensure sales can be maximized as overall market conditions improve."

Total revenue in the second quarter of 2015 increased 52.0% to $36.2 million from $23.8 million in the first quarter of 2015 and decreased 17.8% from $44.1 million in the second quarter of 2014. Other revenue in the second quarter of 2015 was $4.2 million, compared to $3.1million in the first quarter of 2015 and $3.3 million in the second quarter of 2014.

In the second quarter of 2015, the majority of the Company's real estate revenue came from its Puhua Phase Two-East Region, Puhua Phase Three and Four projects, Park Plaza and Ankang projects. 2015 second quarter contract sales totaled $33.5 million compared with $24.4 million in the first quarter of 2015 and $31.7 million in the second quarter of 2014. GFA sales were 35,939 sq. meters during the second quarter of 2015, compared with 26,771 sq. meters in the first quarter of 2015 and 30,408 sq. meters in the second quarter of 2014. The Company's ASP in the second quarter of 2015 was RMB6,061, compared with RMB5,747 in the first quarter of 2015, and RMB6,493 in the second quarter of 2014.

Gross profit for the three months ended June 30, 2015 was $4.7 million, representing an increase of 21.1% from $3.9 million in the first quarter of 2015 and an increase of 673% from $(816,509) in the second quarter of 2014. Gross profit margin for the three months ended June 30, 2015 was 12.9%, compared to 16.2% in the first quarter of 2015 and the (1.9)% in the second quarter of 2014. The year-over-year increase in gross profit was mainly attributable to greater residential housing sales at the Company's Puhua Phase Two-East Region and Puhua Phase IV projects, and the increase also was due to the sales of parking lots accounted for a small proportion.

SG&A expense was $3.6 million in the second quarter of 2015, compared with $3.2 million in the first quarter of 2015 and $3.9 million in the second quarter of 2014. SG&A expense as a percentage of total revenue was 10.0%, compared with 13.6% in the first quarter of 2015 and 8.8% in the second quarter of 2014. The year-over-year decrease in SG&A expense was mainly due to decreased revenue.

Operating income in the second quarter of 2015 was $128,519, compared to an operating loss of $464 thousand in the first quarter of 2015, and operating loss of $6.6 million in the second quarter of 2014. The year-over-year increase was mainly due to greater residential housing sales at the Company's Puhua Phase Two-East Region and Puhua Phase IV projects, and the increase also was due to the sales of parking lots accounted for a small proportion.

Net loss attributable to the Company in the second quarter of 2015 was $19.0 million, or $(2.73) per diluted share, compared to net loss of $479 thousand, or $(0.01) per diluted share, in the first quarter of 2015 and $6.8 million, or $(0.98) per diluted share, in the second quarter of 2014. The increase in net loss is due to a decrease in revenue and a $22.3 million impairment of inventory and intangible assets associated with the Company's Textile City project.

Sequential Quarterly Revenue Breakout Comparison

Project

Q2 2015

Q1 2015

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 Two-East Region

10,770,692

9,632,045

10,792

5,537

70,116

87.8%

1,761,938

1,893,300

2,218

5,324

Ankang Phase One

1,394,097

990,860

1,625

3,782

41,411

87.9%

3,138,004

2,604,805

4,761

3,829

Puhua Four

7,251,633

12,332,569

12,405

6,167

103,683

29.8%

3,588,069

7,927,819

8,119

6,089

Projects Completed

Park Plaza Phase One

5,444,449

5,683,765

6,547

5,385

21,703

100%

5,339,926

5,006,835

4,575

6,824

Puhua Phase Three

7,471,772

5,162,968

4,663

6,868

37,641

100%

5,892,806

5,767,268

5,986

6,008

Puhua Phase One

-605,810

-608,810

-448

8,388

9,817

100%

543,674

741,140

673

6,867

Puhua Phase Two-West Region & New Coast Line

163,556

163,556

124

8,182

14,494

100%

345,935

346,234

394

5,480

JunJing III

155,565

155,565

231

4,177

-

-

-

-

JunJing II Phase One

-

-

-

-

JunJing I

64,143

64,143

45

8,889

Other Projects

-

-

-

-

Other Income

4,175,024

0

0

0

0

3,147,781

-

-

-

Total

36,220,978

33,512,518

35,939

6,061

299,010

86.5%

23,822,277

24,351,546

26,771

5,747

Q-o-Q Change

52.05%

37.62%

34.25%

0.65%

-9.52%

-

-46.95%

2.32%

-13.33%

21.01%

Total debt outstanding as of June 30, 2015 was $286.3 million compared with $323.5 million on December 31, 2014. Net debt outstanding (total debt less cash and restricted cash) as of June 30, 2015 was $190.3 million compared with $199.9 million on December 31, 2014. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 67.5 percent on June 30, 2015 and 64.4 percent on December 31, 2014.

Q2 2015

Projects in Planning

Unsold

GFA

First

Pre-sales

Scheduled

(m2)

Golden Bay

329,508

2015Q3

Ankang Project-Phase II

170,851

2016Q4

Park Plaza- Phase II

66,155

2016Q2

Total projects in planning

566,514

Third Quarter 2015 Outlook

Total contract revenue for the third quarter in 2015 is expected to reach $22 million to $30 million, compared with $23.3 million in the third quarter of 2014. 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 August 14, 2015. Listeners may access the call by dialing +1-913-312-1298. To listen to the live webcast of the event, please go to http://public.viavid.com/index.php?id=115880. Listeners may access the call replay, which will be available through August 21, 2015, by dialing +1-858-384-5517; passcode: 9985983.

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, as amended. 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

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. Bill Zima, ICR +86 10 6583 7511  William.Zima@icrinc.com

China Housing Investor Relations Department +1 646.308.1285

 

-tables to follow-

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Unaudited Interim Condensed Consolidated Balance Sheets

As of June 30, 2015 and December 31, 2014

June 30, 2015

December 31, 2014

ASSETS

Cash

$

6,163,180

$

33,223,127

Cash - restricted

89,901,978

90,328,084

Accounts receivable, net of allowance for doubtful accounts of       $580,356 and $579,926, respectively

17,389,120

33,041,324

Other receivables, prepaid expenses and other assets

11,172,596

9,377,150

Real estate held for development or sale

376,484,943

374,083,969

Property and equipment, net

42,234,117

43,383,002

Advance to suppliers

1,857,487

1,033,359

Deposits on land use rights

16,129,031

16,136,415

Intangible assets, net

8,784,409

23,561,951

Goodwill

1,923,479

1,922,053

Deferred financing costs

-

438,926

Total assets

$

572,040,340

$

626,529,360

LIABILITIES

Accounts payable

$

64,718,728

$

75,845,987

Advances from customers

42,135,560

35,172,506

Accrued expenses

26,076,029

21,842,922

Income taxes payable

23,679,325

24,280,260

Other taxes payable

12,102,802

9,318,119

Other payables

14,913,549

11,692,913

Loans from employees

30,763,337

29,819,381

Loans payable

255,572,814

293,660,575

Deferred tax liability

10,392,486

14,395,327

Total liabilities

480,354,630

516,027,990

SHAREHOLDERS' EQUITY

Common stock: $0.001 par value, authorized 20,000,000 shares;

Issued 6,960,145 and 6,960,145, respectively

6,960

6,960

Additional paid in capital

52,511,350

52,511,350

Statutory reserves

11,700,198

11,700,198

Retained earnings

4,590,652

24,046,686

Accumulated other comprehensive income

22,876,550

22,236,176

Total shareholders' equity

91,685,710

110,501,370

Total liabilities and shareholders' equity

$

572,040,340

$

626,529,360

 

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Unaudited Interim Condensed Consolidated Statements of Loss

For The Three and Six Months Ended June 30, 2015 and 2014

3 Months June 30, 2015

3 Months June 30, 2014

6 Months June 30, 2015

6 Months June 30, 2014

REVENUES

Real estate sales

$   32,045,954

$    40,812,863

$   52,720,450

$   56,619,647

Other income

4,175,024

3,254,400

7,322,805

9,490,027

Total revenues

36,220,978

44,067,263

60,043,255

66,109,674

COST OF SALES

Cost of real estate sales

28,945,151

43,491,234

47,169,747

56,208,120

Cost of other revenue

2,595,234

1,392,538

4,327,866

5,401,995

Total cost of revenues

31,540,385

44,883,772

51,497,613

61,610,115

Gross margin

4,680,593

(816,509)

8,545,642

4,499,559

OPERATING EXPENSES

Selling, general, and administrative expenses

3,610,712

3,876,829

6,860,702

7,866,311

Stock-based compensation

-

1,003,464

-

1,136,304

Other expenses

7,298

10,113

13,502

14,020

Financing expense

934,063

939,852

2,006,885

2,334,382

Total operating expenses

4,552,073

5,830,258

8,881,089

11,351,017

Write off of real estate held for development

7,345,105

-

7,345,105

Write off of Property

563,710

Intangible asset impairment

14,964,476

-

14,964,476

-

Loss before provision for income taxes

(22,181,061)

(6,646,767)

(22,645,028)

(7,415,168)

Provision for income taxes

548,743

128,422

574,463

145,458

Recovery of deferred taxes

(3,752,317)

(11,148)

(3,763,456)

(22,532)

Provision for income taxes

(3,203,574)

117,274

(3,188,993)

122,926

NET LOSS

$ (18,977,487)

$   (6,764,041)

$  (19,456,035)

$  (7,538,094)

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

6,960,145

6,899,584

6,960,145

6,912,195

Diluted

6,960,145

6,899,584

6,960,145

6,912,195

NET LOSS PER SHARE

Basic

$      (2.73)

$        (0.98)

$       (2.80)

$       (1.09)

Diluted

$      (2.73)

$        (0.98)

$       (2.80)

$       (1.09)

 

  

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss

For The Three and Six Months Ended June 30, 2015 and 2014

3 Months June 30, 2015

3 Months June 30, 2014

6 Months June 30, 2015

6 Months June 30, 2014

NET LOSS

$

(18,977,487)

$

(6,764,041)

$   (19,456,035)

$          (7,538,094)

OTHER COMPREHENSIVE INCOME

Gain (loss) in foreign exchange

26,209

513,398

640,374

(5,998,265)

COMPREHENSIVE LOSS

$

(18,951,278)

$

(6,250,643)

$   (18,815,661)

$        (13,536,359)

 

 

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Unaudited Interim Condensed Consolidated Statements of Cash Flows

For The Six Months Ended June 30, 2015 and 2014

June 30, 2015

June 30, 2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss for the period

$

(19,456,035)

$

(7,538,094)

Adjustments to reconcile net loss to cash provided by (used in) operating activities:

Depreciation

1,217,048

1,194,943

Write off of real estate held for development

7,345,105

Write off of Property

-

1,136,304

Loss on disposal of property and equipment

-

563,710

Amortization of intangible assets

110,796

17,888,532

Intangible Asset Impairment

14,964,476

-

(Increase) decrease in assets:

Accounts receivable

15,617,483

1,065,542

Other receivable, prepaid expense, and other assets

(1,774,207)

(2,712,898)

Real estate held for development or sale

(9,358,273)

(74,720,712)

Advances to suppliers

(836,137)

(905,607)

 Deposit on land use right

19,243

41,899,123

Deferred finance costs

452,867

229,850

Recovery of deferred income taxes

(3,763,456)

(22,532)

Increase (decrease) in liabilities:

Accounts payable

(11,103,868)

39,088

Advances from customers

6,915,233

(208,062)

Accrued expenses

4,205,742

(510,917)

Other payables

3,196,470

2,215,782

Income and other taxes payable

2,146,689

2,177,039

Net cash provided by (used in) operating activities

9,899,176

(18,208,909)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(141,108)

(8,387,891)

Purchase of short-term investment

-

(21,537,169)

Net cash used in investing activities

(141,108)

(29,925,060)

CASH FLOWS FROM FINANCING ACTIVITIES:

Change in restricted cash

489,185

2,809,595

Loans from banks

1,612,071

38,586,481

Loans from external parties

47,762,454

10,006,351

Repayment on loans

(87,440,036)

(21,818,551)

Loans from employees, net

919,187

5,756,562

Purchase of treasury stock

-

(635,970)

Net cash (used in) provided by financing activities

(36,657,139)

34,704,468

DECREASE IN CASH

(26,899,071)

(13,429,501)

Effects on foreign currency exchange

(160,876)

(432,904)

CASH, beginning of period

33,223,127

21,320,071

CASH, end of period

$

6,163,180

$

7,457,666

 

 

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Unaudited Interim Condensed Consolidated Statements of Shareholders' Equity

As of June 30, 2015 and December 31, 2014

Common Stock

Additional Paid in

Statutory

Retained

Accumulated Other Comprehensive

Shares

Par Value

Capital

Reserves

Earnings

Income

Totals

BALANCE, December 31, 2014

6,960,145

$

6,960

$

52,511,350

$

11,700,198

$

24,046,686

$

22,236,176

$

110,501,370

Net loss for the period

-

-

-

-

(478,547)

-

(478,547)

Foreign currency translation adjustment

-

-

-

-

-

614,165

614,165

BALANCE, March 31, 2015

6,960,145

$

6,960

$

52,511,350

$

11,700,198

$

23,568,139

$

22,850,341

$

110,636,988

Net loss for the period

-

-

-

-

(18,977,487)

-

(18,977,487)

Foreign currency translation adjustment

-

-

-

-

-

26,209

26,209

BALANCE, June 30, 2015

6,960,145

$

6,960

$

52,511,350

$

11,700,198

$

4,590,652

$

22,876,550

$

91,685,710

 

 

SOURCE China Housing & Land Development Inc.



RELATED LINKS

http://www.chldinc.com