Xinyuan Real Estate Co., Ltd. Announces Fourth Quarter and Full Year 2011
Financial Results
BEIJING, Feb. 23, 2012 /PRNewswire via COMTEX/ -- Xinyuan Real Estate Co., Ltd.
("Xinyuan" or "the Company") (XIN), a residential real estate developer with a
focus on high growth, strategic Tier II cities in China, today announced its
unaudited financial results for the fourth quarter and full year 2011.
Highlights for the Fourth Quarter 2011
Total fourth quarter revenues were US$199.8 million, a 45.6% increase from
US$137.2 million reported in the fourth quarter of 2010, and 6.3% decrease from
US$213.3 million recorded in the third quarter of 2011.
Contract sales totaled US$172.1 million, an 11.3% decrease from US$194.1 million
recorded in the fourth quarter of 2010, and 33.1% decrease from US$257.1 million
recorded in the third quarter of 2011.
Total gross floor area ("GFA") sales were 111,900 square meters, a 35.4% decrease
from 173,200 square meters sold in the fourth quarter of 2010 and 40.7% decrease
from 188,700 square meters sold in the third quarter of 2011.
Selling, General, and Administrative ("SG&A") expenses as a percent of total
revenue totaled 5.8% compared to 6.7% in the fourth quarter of 2010 and 6.7% in
the third quarter of 2011.
Net income reached US$28.3 million, a 31.0% increase from US$21.6 million
reported in the fourth quarter of 2010 and 9.3% decrease from US$31.2 million in
the third quarter of 2011.
Diluted net earnings per share attributable to ordinary shareholders were
US$0.19, equivalent to US$0.38 per American Depositary Share ("ADS"), compared to
diluted net earnings per share of US$0.14, equivalent to US$0.28 per ADS, in the
fourth quarter of 2010 and US$0.21, equivalent to US$0.42 per ADS, in the third
quarter of 2011.
Cash and cash equivalents, including restricted cash, decreased by US$37.5
million to US$487.6 million as of December 31, 2011 from US$525.1 million as of
September 30, 2011 as the Company spent US$83.0 million on new land acquisitions
in the fourth quarter of 2011. Short and long term debt decreased by US$18.0
million to US$285.5 million compared to US$303.5 million as of September 30,
2011.
On May 26, 2011, the Company announced a share repurchase program of up to US$10
million. In the 2011 fourth quarter, the Company repurchased 1,380,265 ADS's at a
total cost of US$2.5 million. Since the start of the share repurchase program,
Xinyuan has repurchased 3,771,764 ADS's at a total cost of nearly US$8.0 million.
The Company acquired two parcels of land In Zhengzhou and Xuzhou with a total GFA
of approximately 326,000 square meters.
Mr. Yong Zhang, Xinyuan's Chairman and Chief Executive Officer said, "We were
pleased to achieve our revenue and net income guidance ranges for the fourth
quarter despite market headwinds experienced from November 2011 onwards. While
broader demand for our projects was affected by ongoing home buying restriction
policies, our development projects in Tier II & III cities have been better
insulated from more significantly weaker housing prices in Tier I cities. Eleven
development projects were active in the fourth quarter with total GFA sales of
approximately 112,000 square meters and average selling prices increasing 12% to
RMB 9,940 primarily due to a mix of higher-priced projects and sales of
commercial retail space in our Chengdu and Zhengzhou Modern City projects which
carry higher prices than residential space.
"For the full year of 2011, our revenue increased by 52.8% to US$688 million from
US$450 million in 2010. Net profit surpassed US$100 million, which is virtually
double the previous year's profit. This strong performance has allowed us to
purchase land, reduce our debt, establish a stock buyback program, and initiate a
dividend program.
"Looking ahead, we expect contract sales to remain sluggish in 2012 if there is
no easing of buyer restriction policies. However, we believe that 2012 will see
year-over-year revenue and net income growth for Xinyuan. We have a sound balance
sheet, sufficient capital and access to capital for the development of all of our
projects including our most recent land parcels acquired in the fourth quarter.
We continue to seek attractive land acquisitions and to maximize shareholder
returns. With a highly diversified project pipeline and strong balance sheet, we
remain highly confident in our strategy to offer affordable developments in Tier
II & III cities."
Financial Results for the Fourth Quarter 2011
Contract Sales
Contract sales totaled US$172.1 million in the fourth quarter compared to
US$194.1 million in the fourth quarter of 2010 and US$257.1 million in the third
quarter of 2011. The Company's GFA sales were 111,900 square meters in the fourth
quarter of 2011 versus 173,200 square meters in the fourth quarter of 2010 and
188,700 square meters in the third quarter of 2011. The average selling price per
square meter sold was RMB9,940 (US$1,538) in the fourth quarter of 2011 versus
RMB7,584 (US$1,120) in the fourth quarter of 2010 and RMB8,857 (US$1,362) in the
third quarter of 2011.
Breakdown of GFA Sales and ASP's by Project
Q4 2010Q3 2011Q4 2011Unsold
GFAASPGFAASPGFAASPGFA
Project(sqm 000) (Rmb)(sqm 000) (Rmb)(sqm 000) (Rmb)(sqm 000)
Chengdu Splendid I6.65,0017.65,6746.310,195 18.7
Chengdu Splendid II53.86,68021.06,91613.96,93651.7
Zhengzhou Colorful Garden5.98,5331.013,798 0.117,584 3.7
Zhengzhou Modern City54.17,57517.48,80815.513,462 62.9
Zhengzhou Royal Palace--12.114,388 9.215,568 110.9
Zhengzhou Century East B--25.78,70513.18,555117.7
Kunshan Intl City Garden11.89,42214.09,7867.99,433116.0
Suzhou Intl City Garden6.713,087 20.610,969 10.110,676 67.7
Xuzhou Colorful Garden29.17,2637.68,7850.811,064 1.0
Jinan Xinyuan Splendid--22.99,4827.58,375479.3
Zhengzhou Yipinxiangshan II --38.86,92826.88,15779.4
Others5.29,756--0.7-4.1
Total173.27,584188.78,857111.99,9401,113.1
Revenue under the Percentage of Completion Method
In the fourth quarter of 2011, the Company's total revenue using the percentage
of completion method was US$199.8 million compared to US$137.2 million in the
fourth quarter of 2010 and US$213.3 million in the third quarter of 2011. Versus
the previous quarter, this quarter's decrease in revenue under the percentage of
completion method is mainly due to the decrease in contract sales.
Gross Profit
Gross profit for the fourth quarter of 2011 was US$56.4 million, or 28.2% of
revenue, compared to gross profit of US$41.4 million, or 30.2% of revenue, in the
fourth quarter of 2010 and a gross profit of US$63.8 million, or 29.9% of
revenue, in the third quarter of 2011.
Each quarter the Company revises total project cost and sales projections for all
projects. In the fourth quarter of 2011 US$0.8 million of cumulative gross profit
was recognized under the percentage of completion method due to changes in
estimates compared to US$3.7 million being recognized the previous quarter due to
changes in estimates.
Selling, General and Administrative Expenses
SG&A expenses were US$11.7 million for the fourth quarter of 2011 compared to
US$9.1 million for the fourth quarter of 2010 and US$14.2 million for the third
quarter of 2011. As a percentage of total revenue, SG&A expenses were 5.8%
compared to 6.7% in the fourth quarter of 2010 and 6.7% in the third quarter of
2011. The decrease in SG&A expenses was mainly due to decreased sales agent
commissions and reduced promotional fees associated with new project launches.
Share-based Compensation
Share-based compensation was US$0.2 million for the fourth quarter of 2011
compared to US$0.6 million for the fourth quarter of 2010 and US$0.5 million for
the third quarter of 2011.
Net Income
Net income for the fourth quarter of 2011 was US$28.3 million compared to US$21.6
million for the same period in 2010 and US$31.2 million in the third quarter of
2011. Net margin was 14.2 %, compared to 15.7% in the fourth quarter of 2010 and
14.6% in the third quarter of 2011. Diluted earnings per share for the fourth
quarter of 2011 were US$0.19, equivalent to US$0.38 per ADS, compared to a profit
of US$0.14 per diluted share, equivalent to US$0.28 per ADS, for the same period
in 2010, and US$0.21 per diluted share, equivalent to US$0.42 per ADS, in the
third quarter of 2011.
Financial Results for the Full Year 2011
For the year ended December 31, 2011, total revenues increased by 52.8% to
US$687.5 million from US$450.0 million in 2010. GFA sales increased by 8.0% to
565,700 square meters from 523,800 square meters in 2010. Contract sales
increased by 29.0% to US$758.9 million from US$588.3 million in 2010.
Gross profit was US$199.7 million, or 29.1% of revenue, for fiscal year 2011
compared to a gross profit of US$115.5 million, or of 25.7% of revenue, for
fiscal year 2010.
SG&A expenses were US$43.4 million, or 6.3% of revenue, compared to US$32.9
million, or 7.3% of revenue in 2010.
Net income was US$103.0 million for fiscal year 2011, versus net income of
US$51.1 million for 2010. Diluted earnings per share were US$0.68, equivalent to
US$1.36 per ADS in 2011, compared to US$0.33, equivalent to US$0.66 per ADS in
2010.
Balance Sheet
As of December 31, 2011, the Company reported US$487.6 million in cash and cash
equivalents (including restricted cash) compared to US$525.1 million as of
September 30, 2011. Total debt outstanding was US$285.5 million, a decrease of
US$18.0 million compared to US$303.5 million at the end of the third quarter of
2011. The value of the Company's real estate property under development at the
end of the fourth quarter was US$761.9 million compared to US$622.3 million at
the end of the third quarter of 2011.
Project Status
Below is a summary table of projects that were active in the fourth quarter of
2011.
GFAContract SalesProject Cost % Complete
(sqm 000)(US$ million)
ProjectTotal Active Projects Sold to date Total Active Projects Sales to date %
Sold
Chengdu Splendid I231.0212.3192.0171.489.3% 93.7%
Chengdu Splendid II216.9165.2220.9171.477.6% 90.6%
Zhengzhou Colorful Garden191.9188.2199.6193.897.1% 99.7%
Zhengzhou Modern City255.4192.5341.7242.170.9% 67.8%
Zhengzhou Royal Palace132.221.3209.149.223.5% 66.9%
Zhengzhou Century East B166.548.8231.465.328.2% 68.6%
Kunshan Intl City Garden497.9381.9569.6426.074.8% 94.0%
Suzhou Intl City Garden204.1136.4301.8208.469.1% 97.9%
Xuzhou Colorful Garden101.8100.8116.9115.498.7% 80.1%
Jinan Xinyuan Splendid565.486.1747.4117.915.8% 53.7%
Zhengzhou Yipinxiangshan II 198.5119.1209.7132.963.4% 70.3%
Others remaining GFA4.1
Total active projects2,765.71,652.63,340.11,893.856.7% 77.8%
As of December 31, 2011, the Company's total sellable GFA was approximately
1,516,800 square meters for active projects and pre-revenue stage projects. Below
is a summary of all projects at Xinyuan that are in the planning stage:
Unsold GFA First
(sqm 000)Pre sales Scheduled
Zhengzhou Century East A (planning) 77.8Q2 2012
Newly AcquiredZhengzhou Land208.3Q4 2012
Newly Acquired Xuzhou Land117.6Q4 2012
Total active projects1,113.1
Total all Xinyuan projects1,516.8
First Quarter and Full Year 2012 Outlook
The Company expects contract sales in the first quarter of 2012 to be in the
range of US$105 to US$115 million. Revenue under the percentage of completion
method is expected to range between US$135 and US$145 million and net income in
the first quarter is expected to be in the range of US$18.0 to US$21.0 million.
For the full year 2012, contract sales are expected to be in the range of US$635
to US$655 million. Revenue under the percentage of completion method is expected
to range between US$755 and US$775 million and net income is expected to be in
the range of US$95 to US$105 million.
Percentage of Completion Accounting
Xinyuan's projects recognize revenue under the percentage of completion method.
This requires the Company to re-evaluate its estimates of future revenues and
costs on a quarterly basis project by project.
Cumulative revenue = Cumulative contract sales proceeds x Cumulative incurred
cost Total estimated project cost
Cumulative cost of sales = Cumulative contract sales x Cumulative incurred cost
Total estimated project revenue
Whenever Xinyuan makes changes to expected total project life profit margins, a
"catch-up" adjustment must be made in the quarter of change to account for the
difference between profits previously recognized using the previous profit margin
estimate and the comparable profit using the new profit margin estimates.
Further, if the updated profit margin indicates that the Company will have to
sell units at a price less than its costs to develop them, it must recognize the
full expected gross loss over the life of the project at that time regardless of
whether the units have been sold. Additionally for such unprofitable projects the
Company must also determine whether an impairment exists, and, if so, write down
the cost to the fair value of the project which, in turn, may be less than the
basis after recognizing the effect of future losses.
Conference Call Information
Xinyuan's management will host an earnings conference call on February 23rd, 2012
at 8:00 a.m. U.S. Eastern Time. Listeners may access the call by dialing
1-719-325-4849. A webcast will also be available through the Company's investor
relations website at http://www.xyre.com. Listeners may access the replay by
dialing 1-858-384-5517, access code: 6044672.
About Xinyuan Real Estate Co., Ltd.
Xinyuan Real Estate Co., Ltd. ("Xinyuan") (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. Xinyuan focuses
on China's Tier II cities, characterized as larger, more developed urban areas
with above average GDP and population growth rates. Xinyuan has expanded its
network to cover a total population of over 44.7 million people in seven
strategically selected Tier II cities, comprising Hefei, Jinan, Kunshan, Suzhou,
Zhengzhou, Xuzhou and Chengdu. 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.
Safe Harbor Statement
This press release contains 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 be identified by
terminology such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates," "confident" and similar statements. Statements
that are not historical facts, including statements concerning our beliefs,
forecasts, estimates and expectations, 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, the risk that: our financing costs are subject to
changes in interest rates; our results of operations may fluctuate from period to
period; the recognition of our real estate revenue and costs relies on our
estimation of total project sales value and costs; we may be unable to acquire
desired development sales at commercially reasonable costs; increases in the
price of raw materials may increase our cost of sales and reduce our earnings; we
are heavily dependent on the performance of the residential property market in
China, which is at a relatively early development stage; PRC economic, political
and social conditions as well as government policies can affect our business; the
market price of our ADSs may be volatile, 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, 2010. All information provided in
this press release is as of February 23, 2012. Except as required by law, we
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the occurrence of
unanticipated events.
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. Tom Gurnee Chief Financial Officer Tel: +86 (10) 8588-9390 Email:
tom.gurnee@xyre.com
Ms. Helen Zhang Financial Controller Tel: +86 (10) 8588-9255 Email:
yuan.z@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
December 31,September 30,December31,
201120112010
(unaudited)(unaudited)(unaudited)
Revenue199,770213,272137,191
Cost of revenue(143,407)(149,464)(95,806)
Gross profit56,36363,80841,385
Selling and distribution expenses(3,645)(6,773)(3,328)
General and administrative expenses(8,006)(7,453)(5,817)
Operating income44,71249,58232,240
Interest income2,5821,230665
Share of income in an equity investee--1,273
Exchange gains1-1
Income from operations before income taxes47,29550,81234,179
Income taxes(18,986)(19,591)(12,572)
Net income28,30931,22121,607
Less: net income/ (loss) attributable to non-controlling interest 114(59)(18)
Net income attributable to shareholders28,19531,28021,625
Earnings per share:
Basic0.190.210.14
Diluted0.190.210.14
Shares used in computation:
Basic147,992151,015153,186
Diluted147,992151,015153,280
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)
Twelvemonths ended
December 31December 31,
20112010
(unaudited)(audited)
Revenue687,508449,972
Cost of revenue(487,777)(334,453)
Gross profit199,731115,519
Selling expenses(16,209)(10,724)
General and administrative expenses(27,231)(22,208)
Operating income156,29182,587
Interest income5,2942,218
Other income/(expense)-2,380
Share of income in an equity investee-227
Exchange gains57202
Change in fair value of warrant liabilities-842
Income from operations before income taxes161,64288,456
Income taxes(58,637)(37,333)
Net income103,00551,123
Less: net income/ (loss) attributable to non-controlling interest 707(18)
Net income attributable to shareholders102,29851,141
Earnings per share:
Basic0.680.34
Diluted0.680.33
Shares used in computation:
Basic151,315152,578
Diluted151,315155,397
XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(All US$ amounts and number of shares data in thousands)
December 31,September 30,December 31,
201120112010
(unaudited)(unaudited)(audited)
ASSETS
Current assets
Cash and cash equivalents319,218364,247213,326
Restricted cash168,384160,80682,305
Accounts receivable22,39122,4343,511
Other receivables13,35210,1236,462
Other deposits and prepayments60,00671,09134,790
Advances to suppliers14,18415,81221,933
Real estate property development completed6,7756,0301,470
Real estate property under development761,871622,345710,585
Other current assets658429663
Total current assets1,366,8391,273,3171,075,045
Real estate properties held for lease, net18,52719,21319,876
Property and equipment, net2,9812,6642,687
Other long-term investment247247242
Deferred tax asset7086921,925
Other assets2,9013,1814,190
TOTAL ASSETS1,392,2031,299,3141,103,965
XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(All US$ amounts and number of shares data in thousands)
December 31,September 30,December 31,
201120112010
(unaudited)(unaudited)(audited)
LIABILITIES AND
SHAREHOLDERSEQUITY
Current liabilities
Accounts payable236,517175,929150,670
Short-term bank loans172,039179,362186,631
Customer deposits71,10965,02322,789
Income tax payable73,58938,05640,895
Deferred tax liabilities17,89647,59218,731
Other payables and accrued liabilities50,97047,88439,162
Payroll and welfare payable7,0183,0614,539
Current portion of long-term debt313296331
Total current liabilities629,451557,203463,748
Non- current liabilities
Long-term bank loans73,48282,83170,213
Unrecognized tax benefits13,82413,70713,151
Other long-term debt39,70941,04638,688
TOTAL LIABILITIES756,466694,787585,800
Shareholdersequity
Common shares151515
Treasury shares(7,959)(5,417)-
Additional paid-in capital509,713509,487507,973
Retained earnings (accumulated deficit)99,27871,893(17,749)
Statutory reserves33,57927,55927,559
TOTAL SHAREHOLDERSEQUITY634,626603,537517,798
Non-controlling interest1,111990367
TOTAL EQUITY635,737604,527518,165
TOTAL LIABILITIES AND
EQUITY1,392,2031,299,3141,103,965
SOURCE Xinyuan Real Estate Co., Ltd.
Copyright (C) 2012 PR Newswire. All rights reserved
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