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Xinyuan Real Estate Co., Ltd. Announces Second Quarter 2017 Financial Results

BEIJING, Aug.11, 2017 /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 second quarter ended June 30, 2017.

Second Quarter 2017 Highlights

  • Contract sales increased 54.4% to US$732.4 million from US$474.4 million in the second quarter of 2016 and increased 139.8% from US$305.4 million in the first quarter of 2017.
  • Total revenue increased 29.6% to US$488.2 million from US$376.6 million in the second quarter of 2016 and increased 73.9% from US$280.7 million in the first quarter of 2017.
  • Gross profit increased 39.6% to US$107.9 million (or 22.1% of total revenue) from US$77.3 million (or 20.5% of total revenue) in the second quarter of 2016, and increased 72.4% from US$62.6 million (or 22.3% of total revenue) in the first quarter of 2017.
  • Selling, General and Administrative ("SG&A") expenses as a percentage of total revenue decreased to 9.9% from 10.9% in the second quarter of 2016 and decreased from 12.6% in the first quarter of 2017.
  • Net income was US$20.6 million, compared to US$27.8 million in the second quarter of 2016 and US$7.4 million in the first quarter of 2017.
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.14, compared to US$0.39 in the second quarter of 2016 and US$0.11 in the first quarter of 2017.
  • The Company repurchased through its share repurchase program 952,231 ADSs at a total cost of approximately US$4.7 million in the second quarter of 2017.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "Our second quarter results were generally in line with our expectations under the current government's restrictive policies impacting China's overall housing market. We achieved 54.4% contract sales growth and 29.6% revenue growth compared to the same quarter last year, which was attributable to strong and solid performance of our active projects.

We were also pleased to increase our number of strategic land acquisitions. During the second quarter, we increased our presence in several existing markets where we have a sound track record, including Zhengzhou, Xi'an and Kunshan, and established our presence in a new market with national geographical significance - Zhuhai, an important location in the "Guangdong-Hong Kong-Macao Greater Bay Area". A total of five new projects with an aggregate GFA of 795,000 square meters were acquired in the second quarter, which we expect to support our growth in the years to come.

Furthermore, we are pleased to pay our 22nd consecutive quarterly dividend. The ongoing US$40 million share repurchase as well as the full redemption of our outstanding US$200 million senior notes in early July also demonstrate our commitment to delivering value to our shareholders," concluded Mr. Zhang.

Second Quarter 2017 Financial Results

Contract Sales

Contract sales in China totaled US$711.8 million in the second quarter compared to US$474.4 million in the second quarter of 2016 and US$240.8 million in the first quarter of 2017.

The Company's GFA sales in China were 409,700 square meters in the second quarter of 2017 compared to 344,600 square meters in the second quarter of 2016 and 140,300 square meters in the first quarter of 2017.

The ASP per square meter sold in China was RMB11,946 (US$1,739) in the second quarter of 2017 compared to RMB8,992 (US$1,377) in the second quarter of 2016 and RMB11,820 (US$1,717) in the first quarter of 2017.

Contract sales in the United States totaled US$20.6 million in the second quarter of 2017.

The Company commenced pre-sales of one new project in the second quarter of 2017, Xingyang Splendid III, which contributed 3.8% of total GFA sales.

Breakdown of GFA Sales and ASPs by Project in China

Project

Q2 2016

Q1 2017

Q2 2017

Unsold

GFA

ASP

GFA

ASP

GFA

ASP

GFA

(m2 '000s)

(RMB)

(m2 '000s)

(RMB)

(m2 '000s)

(RMB)

(m2 '000s)

Zhengzhou Xin City

-0.1

13,136

0.2

52,821

0.1

4,005

5.3

Zhengzhou Thriving Family

0.1

10,446

0.3

5,913

-

-

15.7

Xingyang Splendid I

2.1

5,281

6.2

6,626

0.4

7,115

28.9

Xingyang Splendid II

8.6

5,253

8.6

6,710

15.4

5,265

58.8

Kunshan Royal Palace

29.0

15,586

2.3

21,222

5.3

24,173

8.8

Suzhou Lake Royal Palace

10.6

21,575

2.8

19,906

3.8

20,094

10.5

Jinan Xinyuan Splendid

1.3

9,499

0.2

4,417

0.2

4,263

8.8

Jinan Royal Palace

32.0

6,874

22.4

9,280

13.2

10,508

164.9

Xuzhou Colorful City

2.9

9,895

1.7

15,131

2.8

13,385

47.1

Beijing Xindo Park

-0.3

31,469

0.1

19,697

0.2

4,235

10.4

Chengdu Thriving Family

30.7

5,639

4.7

11,277

6.0

19,194

54.6

Changsha Xinyuan Splendid

39.2

6,355

9.7

9,050

28.2

9,521

24.6

Sanya Yazhou Bay No.1

4.2

12,438

26.3

15,432

8.1

15,888

65.6

Xi'an Metropolitan

21.7

7,133

3.1

8,889

9.5

9,553

65.3

Shanghai Royal Palace

7.0

30,594

-0.1

28,707

-

-

11.4

Zhengzhou Xindo Park

10.2

6,448

13.2

6,342

22.9

6,998

37.1

Jinan Xin Central

11.9

10,793

6.8

11,777

8.3

13,928

65.0

Henan Xin Central I

29.9

8,083

0.5

11,568

3.4

16,229

53.7

Zhengzhou Fancy City I

29.0

8,970

0.8

21,739

2.6

19,015

29.2

Zhengzhou Fancy City II (South)

5.6

8,897

10.1

12,394

7.6

12,649

13.3

Tianjin Spring Royal Palace

68.5

7,429

-0.1

6,844

11.0

11,118

157.7

Kunshan Xindo Park

-

-

4.4

18,244

10.6

20,523

42.5

Zhengzhou International New City I

-

-

0.9

10,834

207.4

12,084

102.1

Henan Xin Central II

-

-

15.0

10,955

27.2

11,293

58.6

Xingyang Splendid III

-

-

-

-

15.5

6,981

108.1

Others

0.5

-

0.2

-

-

-

3.2

Total

344.6

8,992

140.3

11,820

409.7

11,946

1,251.2

Revenue

In the second quarter of 2017, the Company's total revenue increased 29.6% to US$488.2 million from US$376.6 million in the second quarter of 2016 and increased 73.9% from US$280.7 million in the first quarter of 2017.

Gross Profit

Gross profit for the second quarter of 2017 was US$107.9 million, or 22.1% of revenue, compared to a gross profit of US$77.3 million, or 20.5% of revenue, in the second quarter of 2016 and a gross profit of US$62.6 million, or 22.3% of revenue, in the first quarter of 2017.

Selling, General and Administrative Expenses

SG&A expenses were US$48.2 million for the second quarter of 2017 compared to US$41.0 million for the second quarter of 2016 and US$35.5 million for the first quarter of 2017. As a percentage of total revenue, SG&A expenses were 9.9% compared to 10.9% in the second quarter of 2016 and 12.6% in the first quarter of 2017.

Net Income

Net income for the second quarter of 2017 was US$20.6 million compared to US$27.8 million for the second quarter of 2016 and US$7.4 million for the first quarter of 2017. Net margin was 4.2%, compared to 7.4% in the second quarter of 2016 and 2.6% in the first quarter of 2017. Diluted earnings per ADS were US$0.14, compared to US$0.39 per ADS in the second quarter of 2016 and US$0.11 per ADS in the first quarter of 2017.

The lower net income compared with the second quarter of 2016 was mainly due to (i) an increase in selling and distribution expenses related to commercial sales under a more challenging market environment, (ii) an increase in the un-capitalized portion of the Company's interest expenses due to some debt not yet allocated into real estate projects, and (iii) a one-time Land Value-Added Tax (LVAT) refund of approximately US$9 million in the prior year period related to a final settlement at one of the Company's projects.

Balance Sheet

As of June 30, 2017, the Company's cash and cash equivalents (including restricted cash) increased to US$1,276.8 million from US$1,245.9 million as of March 31, 2017. Total debt outstanding was US$2,647.8 million, which reflected an increase of US$320.7 million compared to US$2,327.1 million at the end of the first quarter of 2017. The balance of the Company's real estate properties under development at the end of the second quarter of 2017 was US$2,135.2 million, compared to US$1,848.5 million at the end of the first quarter of 2017.

Real Estate Project Status in China

Below is a summary table of projects that were active and available for sale in the second quarter of 2017.

Project

GFA

Contract Sales

 Project Cost % Complete


(m2 '000s)

(US$ millions)


Total Active Project

Sold to date

Total Active Project

Sales to date

% Sold



Zhengzhou Xin City

211.1

205.8

345.1

315.4

91.4%

98.2%


Zhengzhou Thriving Family

131.5

115.8

148.3

122.4

82.5%

96.7%


Xingyang Splendid I

117.4

88.5

90.7

68.8

75.9%

75.7%


Xingyang Splendid II

137.2

78.4

137.3

67.1

48.9%

58.6%


Kunshan Royal Palace

280.0

271.2

467.9

431.7

92.3%

95.2%


Suzhou Lake Royal Palace

169.6

159.1

349.3

297.7

85.2%

99.6%


Jinan Xinyuan Splendid

572.2

563.4

722.2

716.0

99.1%

99.5%


Jinan Royal Palace

449.7

284.8

638.0

301.8

47.3%

76.2%


Xuzhou Colorful City

130.2

83.1

193.1

115.7

59.9%

83.4%


Beijing Xindo Park

133.1

122.7

435.8

364.7

83.7%

99.8%


Chengdu Thriving Family

211.4

156.8

363.1

151.7

41.8%

96.5%


Changsha Xinyuan Splendid

251.6

227.0

345.0

223.2

64.7%

90.0%


Sanya Yazhou Bay No.1

117.2

51.6

288.3

109.3

37.9%

86.2%


Xi'an Metropolitan

290.7

225.4

459.5

233.9

50.9%

97.4%


Shanghai Royal Palace

57.8

46.4

273.0

170.5

62.5%

99.3%


Zhengzhou Xindo Park

144.4

107.3

192.3

113.0

58.8%

84.5%


Jinan Xin Central

194.7

129.7

347.8

191.7

55.1%

82.2%


Henan Xin Central I

262.2

208.5

351.2

254.0

72.3%

75.7%


Zhengzhou Fancy City I

166.8

137.6

229.6

180.2

78.5%

67.0%


Zhengzhou Fancy City II (South)

84.1

70.8

142.2

109.7

77.1%

63.3%


Tianjin Spring Royal Palace

278.6

120.9

484.5

141.7

29.2%

47.7%


Kunshan Xindo Park

89.0

46.5

265.5

128.7

48.5%

68.7%


Zhengzhou International New City I

360.5

258.4

648.5

444.2

68.5%

39.1%


Henan Xin Central II

109.8

51.2

178.5

83.0

46.5%

53.6%


Xingyang Splendid III

123.5

15.4

135.2

15.7

11.6%

33.7%


Others remaining GFA

3.2







Total active projects

5,077.5

3,826.3

8,231.9

5,351.8

65.0%

78.5%


As of June 30, 2017, the Company's total saleable GFA was approximately 2,947,100 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 '000s)

Pre-sales

Scheduled




Zhengzhou Fancy City II(North)

119.6

Q3 2017


Zhengzhou International New City II

175.7

Q3 2017


Beijing Liyuan project

102.3

To be determined


Changsha Mulian Royal Palace

93.3

Q3 2017


Zhengzhou International New City III

337.0

To be determined


Changsha Renmin East Road project

73.0

To be determined


Xian Aerospace City Project

226.0

To be determined


Zhengzhou Heizhuzhuang Project

340.0

To be determined


Kunshan Zhongyu Project

113.0

To be determined


Zhengzhou International New City IV

46.0

To be determined


Zhuhai Prince Project

70.0

To be determined


Total projects under planning

1,695.9



Total active projects

1,251.2



Total of all Xinyuan unsold projects in China

2,947.1



Real Estate Project Update in the United States

In the second quarter of 2017, our Oosten project in Brooklyn, New York recognized revenue of approximately US$21 million. As of June 30, 2017, we had sold and closed a total of 161 units out of 216 total units and revenue from this project had reached US$238 million. The construction loan for this project was fully paid off. As a testament to this project's success in the New York market, the Oosten project was recently awarded the "Best Residential Condominium Building" award by the Brooklyn Chamber of Commerce at the 2017 Building Brooklyn Awards, which represents the first win by a non-US-based developer in the award's history.

During the second quarter of 2017, local market demand and price trends remained stable in both Manhattan and Brooklyn. Both saw modest year-on-year unit price increases, with Brooklyn enjoying slightly higher increases.

The Company is continuing its foundation work for its second New York City project which is located in midtown Manhattan.

The Company continues to execute its planning, governmental approvals and pre-development of its ground-up development project located in Queens, New York.

Conference Call Information

The Company will hold a conference call at 8:00 am ET on August 11, 2017 to discuss second quarter 2017 results. Listeners may access the call by dialing:

US Toll Free: 1-888-857-6931
China: +86-400-120-2694
International: 1-719-457-2601

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 August 18, 2017 by dialing:

US: 1-844-512-2921
International: 1-412-317-6671
Access code: 4856564

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, Xinyuan 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. Xinyuan 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 and 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 successfully into new geographic markets and new business lines 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, 2016. 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. Joe Xu
Investor Relations Deputy 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

Media:
Edmond Lococo
In China: +86 (10) 6583-7510
Email: Edmond.Lococo@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




June 30,



March 31,



June 30,




2017



2017



2016




(unaudited)



(unaudited)



(unaudited)















Total revenue



488,165




280,714




376,623















Total costs of revenue



(380,242)




(218,147)




(299,317)


Gross profit



107,923




62,567




77,306















Selling and distribution expenses



(18,219)




(10,488)




(8,801)


General and administrative expenses



(29,965)




(25,017)




(32,197)















Operating income



59,739




27,062




36,308















Interest income



4,375




2,599




4,223


Interest expense



(20,195)




(9,325)




(5,063)


Net realized gain on short-term investments



2,257




588




807


Unrealized gain/(loss) on short-term investments



524




1,254




(153)


Other income



-




159




4,101


Exchange (loss)/gains



(46)




(51)




182


Share of loss of equity investees



(265)




(243)




(641)















Income from operations before income taxes



46,389




22,043




39,764















Income taxes



(25,769)




(14,625)




(11,960)















Net income



20,620




7,418




27,804


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



(11,698)




42




(1,278)


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



8,922




7,460




26,526















Earnings per ADS:













Basic



0.14




0.12




0.40


Diluted



0.14




0.11




0.39


ADS used in computation:













Basic



64,324




63,995




66,005


Diluted



65,622




64,944




68,164



 

 

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)

 



Six months ended




June 30,



June 30,




2017



2016




(unaudited)



(unaudited)











Total revenue



768,879




612,007











Total costs of revenue



(598,389)




(485,807)


Gross profit



170,490




126,200











Selling and distribution expenses



(28,707)




(16,922)


General and administrative expenses



(54,982)




(55,605)











Operating income



86,801




53,673











Interest income



6,974




12,694


Interest expense



(29,520)




(10,063)


Net realized gain on short-term investments



2,845




916


Unrealized gain on short-term investments



1,778




767


Other income



159




4,108


Exchange (loss)/gains



(97)




236


Share of loss of an equity investee



(508)




(599)











Income from operations before income taxes



68,432




61,732











Income taxes



(40,394)




(27,033)











Net income



28,038




34,699


Net income attributable to non-controlling interest



(11,656)




(2,054)


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



16,382




32,645











Earnings per ADS:









Basic



0.26




0.49


Diluted



0.25




0.47


ADS used in computation:









Basic



64,159




67,309


Diluted



65,779




69,492



 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 



June 30,



March 31,



December 31,




2017



2017



2016




(unaudited)



(unaudited)



(audited)


ASSETS













Current assets













Cash and cash equivalents



955,209




916,029




578,244


Restricted cash



321,615




329,909




328,499


Short-term investments



49,686




41,113




39,311


Accounts receivable



27,669




26,884




32,704


Other receivables



38,714




31,804




31,822


Deposits for land use rights



80,376




100,804




153,252


Other deposits and prepayments



492,429




276,914




525,263


Advances to suppliers



38,569




30,433




27,457


Real estate properties development completed



381,238




429,254




477,179


Real estate properties under development



2,135,226




1,848,471




1,719,135


Amounts due from related parties



6,155




20,284




17,732


Amounts due from employees



1,582




2,277




621


Other current assets



704




140




226















Total current assets



4,529,172




4,054,316




3,931,445















Real estate properties held for lease, net



191,021




163,541




159,874


Property and equipment, net



33,455




33,610




34,090


Other long-term investment



9,099




8,938




242


Investment in joint ventures



7,502




7,541




7,556


Deferred tax assets



50,190




49,701




49,690


Deposits for land use rights



29,523




28,988




28,831


Other assets



57,060




24,740




24,717















TOTAL ASSETS



4,907,022




4,371,375




4,236,445


 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 



June 30,



March 31,



December 31,




2017



2017



2016




(unaudited)



(unaudited)



(audited)


LIABILITIES AND













SHAREHOLDERS' EQUITY













Current liabilities













Accounts payable and notes payable



482,009




423,413




524,663


Short-term bank loans and other debt



109,856




130,448




178,576


Customer deposits



173,326




168,829




150,545


Income tax payable



102,736




106,396




120,573


Other payables and accrued liabilities



242,940




208,466




199,661


Payroll and welfare payable



12,247




4,626




19,522


Current portion of long-term bank loans and other debt



1,074,467




574,802




704,695


Current maturities of capital lease obligations



4,314




3,945




3,923


Mandatorily redeemable non-controlling interests



12,916




-




12,614


Amounts due to related parties



69,307




67,949




66,230















Total current liabilities



2,284,118




1,688,874




1,981,002















Non- current liabilities













Long-term bank loans



363,898




350,887




235,885


Other long term debt



1,099,563




1,270,978




974,791


Deferred tax liabilities



172,763




105,086




93,107


Unrecognized tax benefits



20,494




20,492




20,492


Capital lease obligations, net of current maturities



13,093




14,876




15,016


Due to related parties



1,543




-




-


TOTAL LIABILITIES



3,955,472




3,451,193




3,320,293















Shareholders' equity













Common shares



16




16




16


Treasury shares



(65,590)




(60,915)




(53,734)


Additional paid-in capital



542,040




539,763




538,414


Statutory reserves



95,965




95,965




95,973


Retained earnings



356,990




354,905




354,274


Accumulated other comprehensive income



(11,227)




(30,652)




(34,683)


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



918,194




899,082




900,260


Non-controlling interest



33,356




21,100




15,892


Total equity



951,550




920,182




916,152


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY



4,907,022




4,371,375




4,236,445


View original content:http://www.prnewswire.com/news-releases/xinyuan-real-estate-co-ltd-announces-second-quarter-2017-financial-results-300503189.html

SOURCE Xinyuan Real Estate Co., Ltd.