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

May 15, 2015, 06:00 ET from Xinyuan Real Estate Co., Ltd.

BEIJING, May 15, 2015 /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 2015.

Highlights for the First Quarter 2015

  • Total first quarter revenues were US$166.7 million, a 54.1% decrease from US$362.9 million recorded in the fourth quarter of 2014 and a 26.4% decrease from US$226.4 million recorded in the first quarter of 2014. Contract sales totaled US$184.9 million, a 54.1% decrease from US$402.6 million recorded in the fourth quarter of 2014 and a 32.5% decrease from US$273.9 million recorded in the first quarter of 2014.  
  • Total gross floor area ("GFA") sales were 113,100 square meters, a 55.2% decrease from 252,200 square meters sold in the fourth quarter of 2014 and an 11.0% decrease from 127,100 square meters sold in the first quarter of 2014.  
  • Selling, General, and Administrative ("SG&A") expenses as a percent of total revenue totaled 16.6% compared to 14.6% in the fourth quarter of 2014 and 10.7% in the first quarter of 2014.  
  • Net income was US$4.5 million, an 81.1% decrease from US$23.8 million in the fourth quarter of 2014 and a 55.4% decrease from US$10.1 million in the first quarter of 2014.  
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.06, compared to diluted net earnings per ADS of US$0.30 in the fourth quarter of 2014 and US$0.12 per ADS in the first quarter of 2014.

Mr. Yong Zhang, Xinyuan's Chairman said, "We experienced a challenging first quarter as demand for our housing units were down due to an overall slower market environment. Average sales prices at the majority of our projects held steady however GFA sales were down impacting overall sales and profit this quarter. The first quarter is traditionally slower and we expect our contract sales and revenue to improve during the course of the year. Our performance for the remainder of the year can also be aided by recent government policies aimed at stabilizing market conditions which include a lowering of the down payment ratio by home buyers. While we believe such policies can improve our sales opportunities, there remains uncertainty in China's real estate market including the timing on when market conditions may recover."

"We continue to invest for our future growth. Our current project portfolio at the end of the first quarter is comprised of 16 development projects totaling 1.98 million square meters. We launched one new project in the first quarter, Shanghai Royal Palace, and plan to launch two projects in the second quarter and four additional projects in the back half of the year. As of March 31, 2015, our total sellable GFA was approximately 3.23 million square meters, representing both active projects and projects in the planning stage," concluded Mr. Zhang.

Financial Results for the First Quarter 2015

Contract Sales

Contract sales totaled US$184.9 million in the first quarter compared to US$402.6 million in the fourth quarter of 2014 and US$273.9 million in the first quarter of 2014. The Company's GFA sales were 113,100 square meters in the first quarter of 2015 versus 252,200 square meters in the fourth quarter of 2014 and 127,100 square meters in the first quarter of 2014. The average selling price ("ASP") per square meter sold was RMB10,031 (US$1,634) in the first quarter of 2015 versus RMB9,806 (US$1,596) in the fourth quarter of 2014 and RMB13,181 (US$2,155) in the first quarter of 2014.

Breakdown of GFA Sales and ASPs by Project 

Project

Q1 2014

Q4 2014

Q1 2015

Unsold

GFA

ASP

GFA

ASP

GFA

ASP

GFA

(m000)

(Rmb)

(m000)

(Rmb)

(m000)

(Rmb)

(m2 000)

Zhengzhou Xin City

33.6

10,672

27.9

14,206

5.5

13,995

12.8

Zhengzhou Thriving Family

-

-

41.5

7,229

8.3

6,961

21.2

Xingyang Splendid I

-

-

16.8

4,831

5.0

5,052

64.8

Xingyang Splendid II

-

-

1.7

13,401

0.1

11,688

136.0

Kunshan Royal Palace

7.0

10,615

23.0

8,843

14.3

8,672

184.6

Suzhou Xin City

19.4

9,369

5.8

10,312

1.4

10,383

2.4

Suzhou Lake Royal Palace

-

-

12.1

8,299

9.9

8,207

145.6

Jinan Xinyuan Splendid

23.8

9,746

20.9

9,595

6.8

10,284

23.1

Jinan Royal Palace

-

-

23.6

6,348

12.2

6,235

391.8

Xuzhou Colorful City

4.0

6,954

9.6

8,700

3.9

9,008

77.9

Beijing Xindo Park

35.8

20,867

19.8

22,889

12.2

22,934

52.8

Chengdu Thriving Family

-

-

15.5

5,498

9.0

5,607

189.9

Changsha Xinyuan Splendid

-

-

10.6

5,139

7.4

5,165

234.6

Sanya Yazhou Bay No.1

-

-

6.5

14,750

2.0

13,404

108.4

Xi'an Metropolitan*

-

-

6.2

6,362

9.5

6,268

277.3

Shanghai Royal Palace

-

-

-

-

5.5

20,889

52.3

Others

3.5

-

10.7

-

0.1

-

5.7

Total

127.1

13,181

252.2

9,806

113.1

10,031

1,981.2

* 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 first quarter of 2015, the Company's total revenue was US$166.7 million compared to US$362.9 million in the fourth quarter of 2014 and US$226.4 million in the first quarter of 2014.

Gross Profit

Gross profit for the first quarter of 2015 was US$48.0 million, or 28.8% of revenue, compared to a gross profit of US$96.1 million, or 26.5% of revenue, in the fourth quarter of 2014 and a gross profit of US$59.4 million, or 26.2% of revenue, in the first quarter of 2014.

Selling, General and Administrative Expenses

SG&A expenses were US$27.7 million for the first quarter of 2015 compared to US$53.1 million for the fourth quarter of 2014 and US$24.3 million for the first quarter of 2014. As a percentage of total revenue, SG&A expenses were 16.6% compared to 14.6% in the fourth quarter of 2014 and 10.7% in the first quarter of 2014.

Net Income

Net income for the first quarter of 2015 was US$4.5million compared to US$23.8 million for the fourth quarter of 2014 and US$10.1 million for the first quarter of 2014. Net margin was 2.7% compared to 6.6% in the fourth quarter of 2014 and 4.4% in the first quarter of 2014. Diluted earnings per ADS were US$0.06 compared to US$0.30 per ADS in the fourth quarter of 2014 and US$0.12 per ADS in the first quarter of 2014.

Balance Sheet

As of March 31, 2015, the Company reported US$432.8 million in cash and cash equivalents (including restricted cash) compared to US$509.4 million as of December 31, 2014. Total debt outstanding was US$1,683.5 million, an increase of US$174.7 million compared to US$1,508.8 million at the end of the fourth quarter of 2014. The balance of the Company's real estate property under development at the end of the first quarter 2015 was US$2,045.4 million compared to US$1,714.6 million at the end of the fourth quarter of 2014.

Project Status

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

208.6

195.8

355.2

322.8

90.9%

78.1%

Zhengzhou Thriving Family

131.5

110.3

145.9

129.4

88.7%

57.0%

Xingyang Splendid I

117.6

52.8

92.1

44.0

47.8%

48.7%

Xingyang Splendid II

137.8

1.8

133.2

3.9

2.9%

30.9%

Kunshan Royal Palace

284.3

99.7

499.3

149.4

29.9%

62.5%

Suzhou Xin City

127.3

124.9

187.1

181.5

97.0%

93.7%

Suzhou Lake Royal Palace

169.6

24.0

365.9

33.3

9.1%

80.6%

Shandong Splendid

571.7

548.6

807.8

781.1

96.7%

93.3%

Jinan Royal Palace

449.2

57.4

696.9

59.7

8.6%

50.5%

Xuzhou Colorful City

129.1

51.2

209.4

75.4

36.0%

57.7%

Beijing Xindo Park

132.1

79.3

470.8

289.1

61.4%

83.9%

Chengdu Thriving Family

214.8

24.9

360.6

22.4

6.2%

69.5%

Changsha Xinyuan Splendid

252.7

18.1

369.3

15.2

4.1%

52.3%

Sanya Yazhou Bay No.1

116.9

8.5

306.1

20.0

6.5%

48.1%

Xi'an Metropolitan*

293.0

15.7

486.5

16.1

3.3%

43.5%

Shanghai Royal Palace

57.8

5.5

302.3

18.6

6.2%

77.7%

Others remaining GFA

5.7

Total active projects

3,399.7

1,418.5

5,788.4

2,161.9

37.3%

69.2%

* 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 March 31, 2015, the Company's total sellable GFA was approximately 3,228,800 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 (m2 000)

Pre sales

Scheduled

Xingyang Splendid III

37.4

Q4 2015

Zhengzhou Xindo Park (commercial)                                       

146.2

Q2 2015

Newly Acquired Tianjin Land

263.5

Q3 2015

Zhengzhou Jiaotong college project

167.2

Q4 2015

Zhengzhou Nangangliu Project

371.7

Q4 2015

Jinan Xin Central

261.6

Q2 2015

Total projects under planning

1,247.6

Total active projects

1,981.2

Total all Xinyuan projects in China

3,228.8

New York Oosten Project Update

As of March 31, 2015, 100% of the concrete superstructure has been completed as planned. The Company continues to work on the mechanical, plumbing and electrical systems, as well as the exterior window walls. Pre-sales are proceeding smoothly at a measured pace. Sales prices on a per-square-foot basis have gradually increased by about 25% on average since the Company began pre-sales on a limited basis in the third quarter of 2014, as local market conditions in New York remain strong. At the end of the first quarter 2015, the total contracted amount was approximately US$125 million.

Conference Call Information

The Company will hold a conference call at 8:00 am ET on May 15, 2015 to discuss first quarter 2015 results. Listeners may access the call by dialing:

US: 1-888-812-8534 International: 1-913-312-1400

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 22, 2015 by dialing:

US: 1-877-870-5176 International: 1-858-384-5517 Access code: 6665819

About Xinyuan Real Estate Co., Ltd.

Xinyuan Real Estate Co., Ltd. ("Xinyuan") 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 high growth cities, including Zhengzhou, Jinan, Suzhou, Kunshan, Xuzhou, Chengdu, Shanghai, Beijing, Tianjin, Changsha, Sanya, Xi'an and Hefei. The Company's U.S. development arm, XIN Development Group International, Inc., is a pioneer amongst Chinese real estate residential developers, entering the U.S. 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, 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. Mr. Nathan Lai Investor Relations Manager 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,

2015

2014

2014

(unaudited)

(unaudited)

(unaudited)

Total revenue

166,718

362,900

226,412

Total costs of revenue

(118,737)

(266,820)

(167,043)

Gross profit

47,981

96,080

59,369

Selling and distribution expenses

(7,267)

(17,361)

(4,781)

General and administrative expenses

(20,398)

(35,725)

(19,494)

Operating income

20,316

42,994

35,094

Interest income

5,448

8,711

1,531

Interest expense

(5,459)

(6,189)

(8,641)

Net realized gain on short-term investments

117

3,128

-

Unrealized gain (loss) on short-term investments

22

(1,983)

-

Other income

4,758

105

-

Loss on extinguishment of debt

-

(9,849)

-

Exchange gains

26

656

-

Share of loss of an equity investee

(88)

(1,047)

(217)

Income from operations before income taxes

25,140

36,526

27,767

Income taxes

(20,632)

(12,685)

(17,717)

Net income

4,508

23,841

10,050

Net (income)/loss attributable to non-controlling interest

(15)

19

-

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

4,493

23,860

10,050

Earnings per ADS:

Basic

0.06

0.32

0.13

Diluted

0.06

0.30

0.12

ADS used in computation:

Basic

73,513

74,446

77,801

Diluted

73,579

81,660

90,810

 

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,

2015

2014

(unaudited)

(audited)

ASSETS

Current assets

Cash and cash equivalents

139,840

140,495

Restricted cash

292,962

368,874

Short-term investment

11,468

6,008

Accounts receivable

9,232

15,457

Other receivables

124,792

134,819

Restricted deposit

69,096

69,358

Deposits for land use rights

192,729

299,739

Other deposits and prepayments

201,462

152,290

Advances to suppliers

44,071

29,787

Real estate property held for sale

-

1,185

Real estate property development completed 

11,948

12,309

Real estate property under development

2,045,431

1,714,575

Amounts due from related parties

99,458

125,374

Amounts due from employees

1,428

50

Other current assets

196

139

Total current assets

3,244,113

3,070,459

Real estate properties held for lease, net

77,123

69,224

Property and equipment, net

45,058

46,476

Other long-term investment

242

242

Investment in joint venture

4,122

4,226

Deferred tax assets

13,660

13,642

Deferred charges

18,139

16,677

Other assets

10,141

10,580

TOTAL ASSETS

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)

March 31,

December 31,

2015

2014

(unaudited)

(audited)

LIABILITIES AND

SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

291,227

351,506

Short-term bank loans and other debt

281,924

293,450

Customer deposits

147,032

107,163

Income tax payable

65,098

62,429

Deferred tax liabilities

108,747

91,202

Other payables and accrued liabilities

95,009

74,089

Payroll and welfare payable

3,593

18,457

Current portion of long-term bank loans and other debt

571,683

586,841

Current maturities of capital lease obligations    

2,999

3,010

Redeemable non-controlling interests

4,070

4,486

Total current liabilities

1,571,382

1,592,633

Non- current liabilities

Long-term bank loans

43,633

52,296

Other long term debt

786,293

576,204

Deferred tax liabilities

12,174

9,825

Unrecognized tax benefits

13,964

14,005

Capital lease obligations, net of current maturities

22,696

23,500

Redeemable non-controlling interests

3,093

2,451

TOTAL LIABILITIES

2,453,235

2,270,914

Shareholders' equity

Common shares

16

16

Treasury shares

(20,696)

(20,696)

Additional paid-in capital

531,400

530,670

Statutory reserves

72,821

72,829

Retained earnings

274,068

273,255

Accumulated other comprehensive income       

98,669

104,557

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

956,278

960,631

Non-controlling interest

3,085

(19)

Total equity

959,363

960,612

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

3,412,598

3,231,526

 

SOURCE Xinyuan Real Estate Co., Ltd.



RELATED LINKS

http://www.xyre.com