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

BEIJING, Nov. 10, 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 also in other countries, today announced its unaudited financial results for the third quarter ended September 30, 2017.

Third Quarter 2017 Highlights

  • Contract sales increased 15.1% to US$604.5 million from US$525.4 million in the third quarter of 2016, and also increased 28.4% to US$1.6 billion for the first nine months of 2017 compared to US$1.3 billion in the same period of 2016.
  • Total revenue increased 8.6% to US$482.4 million from US$444.3 million in the third quarter of 2016, and also increased 18.5% to US$1.3 billion for the first nine months of 2017 compared to US$1.1 billion in the same period of 2016.
  • Gross profit increased 3.6% to US$108.8 million, or 22.6% of total revenue, from US$105.0 million, or 23.6% of total revenue, in the third quarter of 2016 and increased 0.8% from US$107.9 million, or 22.1% of total revenue, in the second quarter of 2017.
  • Selling, General and Administrative ("SG&A") expenses as a percentage of total revenue decreased to 10.6% from 12.1% in the third quarter of 2016 and increased from 9.8% in the second quarter of 2017.
  • Net income was US$16.5 million compared to US$28.0 million in the third quarter of 2016 and US$20.8 million in the second quarter of 2017.
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.22 compared to US$0.41 in the third quarter of 2016 and US$0.14 in the second quarter of 2017.
  • The Company repurchased through its share repurchase program 421,292 ADSs at a total cost of approximately US$2.2 million in the third quarter of 2017.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "Our third quarter results were generally in line with our expectations under the ongoing restrictive government policies impacting China's overall housing market. We achieved double-digit growth in contract sales compared to the same quarter last year, thanks to steady demand of our active projects. The increase in contract sales for the first nine months of 2017 also met our growth target.

During the third quarter, we were pleased to commence pre-sales of two new projects, Zhengzhou International New City II and Changsha Mulian Royal Palace, and we look forward to beginning pre-sales of two new projects in Zhengzhou in the fourth quarter. We have also been reasonably increasing our land bank during the year, which provides us with a good foundation for development and growth in the coming quarters.

Finally, we were pleased to continue our commitment to our shareholders by paying our 23rd consecutive quarterly dividend and repurchasing shares during the third quarter," concluded Mr. Zhang.

Third Quarter 2017 Financial Results

Contract Sales

Contract sales in China totaled US$597.5 million in the third quarter compared to US$525.4 million in the third quarter of 2016 and US$711.8 million in the second quarter of 2017. Total Contract sales in China for the first nine months of 2017 totaled US$1.6 billion, compared with US$1.3 billion for the same period last year.

The Company's gross floor area ("GFA") sales in China were 369,500 square meters in the third quarter of 2017 compared to 340,700 square meters in the third quarter of 2016 and 409,700 square meters in the second quarter of 2017. GFA sales in China for the first nine months of 2017 totaled 919,500 square meters, compared with 891,900 square meters for the same period last year.

The average selling price ("ASP") per square meter sold in China was RMB10,994 (US$1,616) in the third quarter of 2017 compared to RMB10,140 (US$1,542) in the third quarter of 2016 and RMB11,946 (US$1,739) in the second quarter of 2017. The slight decrease in ASP was mainly due to product mix containing affordable unit sales in the third quarter.

Contract sales in the United States totaled US$7.0 million in the third quarter of 2017.

The Company commenced pre-sales of two new projects in the third quarter of 2017, Changsha Mulian Royal Palace and Zhengzhou International New City II, which contributed 27.5% and 32.0% of total GFA sales and total contract sales, respectively.

Breakdown of GFA Sales and ASPs by Project in China

Project

Q3 2016

Q2 2017

Q3 2017

Unsold

GFA

ASP

GFA

ASP

GFA

ASP

GFA

(m2, 000s)

(RMB)

(m2, 000s)

(RMB)

(m2, 000s)

(RMB)

(m2, 000s)

Xingyang Splendid II

16.2

4,979

15.4

5,265

1.4

6,973

57.3

Kunshan Royal Palace

8.4

21,099

5.3

24,173

6.2

25,987

2.6

Jinan Royal Palace

28.2

7,501

13.2

10,508

29.7

12,457

136.8

Xuzhou Colorful City

3.6

11,182

2.8

13,385

0.6

11,138

46.5

Chengdu Thriving Family

31.9

6,703

6.0

19,194

10.2

15,061

45.9

Changsha Xinyuan Splendid

29.8

7,439

28.2

9,521

7.4

13,726

17.1

Sanya Yazhou Bay No.1

-1.2

22,139

8.1

15,888

1.6

15,313

64.0

Xi'an Metropolitan

23.6

7,786

9.5

9,553

7.2

9,497

58.0

Zhengzhou Xindo Park

4.4

6,590

22.9

6,998

8.1

8,552

29.0

Jinan Xin Central

13.9

9,330

8.3

13,928

9.2

12,151

55.8

Henan Xin Central I

65.7

8,775

3.4

16,229

28.5

4,093

25.2

Zhengzhou Fancy City I

15.1

9,234

2.6

19,015

18.8

5,155

10.4

Zhengzhou Fancy City II (South)

37.9

9,613

7.6

12,649

2.9

13,995

10.4

Tianjin Spring Royal Palace

12.3

7,377

11.0

11,118

6.2

11,617

151.1

Kunshan Xindo Park

30.9

18,612

10.6

20,523

11.5

22,198

31.0

Zhengzhou International New
City I

1.4

10,662

207.4

12,084

35.3

10,141

66.9

Henan Xin Central II

-

-

27.2

11,293

28.0

8,379

30.5

Xingyang Splendid III

-

-

15.5

6,981

47.4

7,217

58.4

Changsha Mulian Royal Palace

-

-

-

-

32.8

11,291

58.4

Zhengzhou International New
City II

-

-

-

-

69.0

13,783

107.1

Others

18.6

-

4.7

-

7.5

-

86.9

Total

340.7

10,140

409.7

11,946

369.5

10,994

1,149.3

Revenue

In the third quarter of 2017, the Company's total revenue increased 8.6% to US$482.4 million from US$444.3 million in the third quarter of 2016 and decreased 1.2% from US$488.2 million in the second quarter of 2017. Revenue for the first nine months of 2017 totaled US$1.3 billion compared with US$1.1 billion for the same period last year.

Gross Profit

Gross profit for the third quarter of 2017 was US$108.8 million, or 22.6% of revenue, compared to a gross profit of US$105.0 million, or 23.6% of revenue, in the third quarter of 2016 and a gross profit of US$107.9 million, or 22.1% of revenue, in the second quarter of 2017.

Selling, General and Administrative Expenses

SG&A expenses were US$51.0 million for the third quarter of 2017 compared to US$53.8 million for the third quarter of 2016 and US$47.9 million for the second quarter of 2017. As a percentage of total revenue, SG&A expenses were 10.6% compared to 12.1% in the third quarter of 2016 and 9.8% in the second quarter of 2017.

Net Income

Net income for the third quarter of 2017 was US$16.5 million compared to US$28.0 million for the third quarter of 2016 and US$20.8 million for the second quarter of 2017. Net margin was 3.4% compared to 6.3% in the third quarter of 2016 and 4.3% in the second quarter of 2017. Diluted earnings per ADS were US$0.22, compared to US$0.41 per ADS in the third quarter of 2016 and US$0.14 per ADS in the second quarter of 2017.

The Net Income this quarter was negatively impacted by a one-time US$13.0 million loss on extinguishment of debt incurred upon the Company's debt redemption in July 2017.

Balance Sheet

As of September 30, 2017, the Company's cash and cash equivalents (including restricted cash) decreased to US$1,187.2 million from US$1,275.1 million as of June 30, 2017. Total debt outstanding was US$2,492.4 million, which reflected a decrease of US$155.4 million compared to US$2,647.8 million at the end of the second quarter of 2017. The balance of the Company's real estate properties under development at the end of the third quarter of 2017 was US$2,080.5 million compared to US$2,135.2 million at the end of the second 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 third 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



Xingyang Splendid II

137.2

79.9

138.7

69.2

49.9%

67.9%


Kunshan Royal Palace

280.0

277.4

472.5

459.7

97.3%

96.0%


Jinan Royal Palace

451.3

314.5

644.3

359.2

55.8%

77.5%


Xuzhou Colorful City

130.2

83.7

195.1

117.8

60.4%

85.1%


Chengdu Thriving Family

213.0

167.1

366.7

175.9

48.0%

98.7%


Changsha Xinyuan Splendid

251.6

234.5

348.4

240.4

69.0%

91.0%


Sanya Yazhou Bay No.1

117.2

53.2

291.2

114.1

39.2%

89.6%


Xi'an Metropolitan

290.6

232.6

464.1

246.4

53.1%

97.4%


Zhengzhou Xindo Park

144.4

115.4

194.2

124.3

64.0%

85.7%


Jinan Xin Central

194.7

138.9

351.3

210.1

59.8%

83.5%


Henan Xin Central I

262.2

237.0

354.7

273.7

77.2%

85.0%


Zhengzhou Fancy City I

166.7

156.3

231.9

196.3

84.6%

77.5%


Zhengzhou Fancy City II (South)

84.1

73.7

143.6

116.7

81.3%

66.1%


Tianjin Spring Royal Palace

278.2

127.1

489.4

153.8

31.4%

52.8%


Kunshan Xindo Park

89.0

58.0

268.2

167.6

62.5%

73.7%


Zhengzhou International New
City I

360.5

293.6

655.0

501.2

76.5%

42.2%


Henan Xin Central II

109.7

79.2

180.2

118.3

65.6%

58.5%


Xingyang Splendid III

121.3

62.9

129.5

66.2

51.1%

40.0%


Changsha Mulian Royal Palace

91.2

32.8

160.2

54.4

34.0%

64.8%


Zhengzhou International New
City II

176.0

68.9

378.2

139.7

36.9%

40.5%


Others remaining GFA

86.9

-

-

-

-

-


Total active projects

4,036.0

2,886.7

6,457.4

3,905.0

68.0%

78.9%


As of September 30, 2017, the Company's total saleable GFA was approximately 3,030,300 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

Q4 2017


Beijing Liyuan Project

102.3

To be determined


Zhengzhou International New City III

411.1

Q4 2017


Changsha Furong Thriving Family (Changsha Renmin East Road
Project)

73.0

To be determined


Xi'an Royal Palace (Xi'an 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


Qingdao New Project

380.0

 To be determined


Total projects under planning

1,881.0



Total active projects

1,149.3



Total of all Xinyuan unsold projects in China

3,030.3



Real Estate Project Update in the United States

In the third quarter of 2017, the Company's Oosten project in Brooklyn, New York recognized revenue of approximately US$7.0 million. As of September 30, 2017, a total of 167 units out of 216 total units were sold and closed and total revenue from this project had reached US$244 million.

During the third quarter of 2017, local market demand and price trends remained stable in both Manhattan and Brooklyn. Both experienced modest year-over-year unit price increases. However, "Days on Market", an industry-wide metric for the average number of days to sell a listed housing unit, increased modestly, which was reflected on the slower sales of our Oosten project. The remaining larger units may take more time than smaller units that have been sold and delivered.

The Company is continuing its foundation work for its second New York City project which is located at the 10th Avenue, Manhattan, New York.

For the Company's third project, located in Flushing, Queens, New York, it continues to execute its planning, governmental approvals and pre-development of its ground-up development project.

Conference Call Information

The Company will hold a conference call at 8:00 am ET on November 10, 2017 to discuss third quarter 2017 results. Listeners may access the call by dialing:

US Toll Free: 1-800-289-0438
China: +86-400-120-9101
International: 1-323-794-2423

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 November 17, 2017 by dialing:

US: 1-844-512-2921
International: 1-412-317-6671
Access code: 3600225

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 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


September 30,


June 30,


September 30,


2017


2017


2016


(unaudited)


(unaudited)


(unaudited)










Total revenue


482,373



488,165



444,278










Total costs of revenue


(373,532)



(380,242)



(339,322)

Gross profit


108,841



107,923



104,956










Selling and distribution expenses


(18,890)



(18,072)



(19,233)

General and administrative expenses


(32,085)



(29,823)



(34,584)










Operating income


57,866



60,028



51,139










Interest income


5,454



4,375



2,116

Interest expense


(11,418)



(20,195)



(6,558)

Net realized gain on short-term investments


1,017



2,257



1,392

Unrealized gain on short-term investments


2,434



524



91

Other expense


(3)



-



(27)

Loss on extinguishment of debt


(15,880)



-



-

Exchange loss


(189)



(46)



(37)

Share of (loss)/gain of equity investees


(386)



(265)



412










Income from operations before income taxes


38,895



46,678



48,528










Income taxes


(22,366)



(25,901)



(20,481)










Net income


16,529



20,777



28,047

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


(2,453)



(11,698)



157

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


14,076



9,079



28,204










Earnings per ADS:









Basic


0.22



0.14



0.43

Diluted


0.22



0.14



0.41

ADS used in computation:









Basic


64,333



64,324



66,121

Diluted


65,347



65,622



69,329


 

 

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)



Nine months ended


September 30,


September 30,


2017


2016


(unaudited)


(unaudited)







Total revenue


1,251,252



1,056,285







Total costs of revenue


(971,921)



(825,130)

Gross profit


279,331



231,155







Selling and distribution expenses


(47,449)



(36,155)

General and administrative expenses


(86,925)



(90,189)







Operating income


144,957



104,811







Interest income


12,428



14,810

Interest expense


(40,938)



(16,621)

Net realized gain on short-term investments


3,862



2,308

Unrealized gain on short-term investments


4,212



858

Other income


156



4,081

Loss on extinguishment of debt


(15,880)



-

Exchange (loss)/gains


(286)



198

Share of loss of an equity investee


(894)



(186)







Income from operations before income taxes


107,617



110,259







Income taxes


(62,891)



(47,513)







Net income


44,726



62,746

Net income attributable to non-controlling interest


(14,109)



(1,897)

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


30,617



60,849







Earnings per ADS:






Basic


0.48



0.91

Diluted


0.47



0.88

ADS used in computation:






Basic


64,217



66,910

Diluted


65,618



69,090


 

 

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,


2017


2017


2016


(unaudited)


(unaudited)


(audited)

ASSETS









Current assets









Cash and cash equivalents


806,459



953,511



578,244

Restricted cash


380,785



321,615



328,499

Short-term investments


49,813



49,686



39,311

Accounts receivable


53,294



27,669



32,704

Other receivables


45,199



38,750



31,822

Deposits for land use rights


82,041



80,376



153,252

Other deposits and prepayments


501,284



492,218



525,263

Advances to suppliers


47,235



38,465



27,457

Real estate properties development completed


538,476



381,238



477,179

Real estate properties under development


2,080,472



2,135,226



1,719,135

Amounts due from related parties


30,134



24,584



17,732

Amounts due from employees


3,399



1,482



621

Other current assets


995



583



226










Total current assets


4,619,586



4,545,403



3,931,445










Real estate properties held for lease, net


187,280



191,021



159,874

Property and equipment, net


32,783



33,154



34,090

Other long-term investment


12,671



9,099



242

Investment in joint ventures


12,824



7,502



7,556

Deferred tax assets


50,722



50,190



49,690

Deposits for land use rights


22,601



29,523



28,831

Other assets


71,193



40,976



24,717










TOTAL ASSETS


5,009,660



4,906,868



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)



September 30,


June 30,


December 31,


2017


2017


2016


(unaudited)


(unaudited)


(audited)

LIABILITIES AND









SHAREHOLDERS' EQUITY









Current liabilities









Accounts payable and notes payable


472,000



482,028



524,663

Short-term bank loans and other debt


120,430



109,856



178,576

Customer deposits


318,973



173,326



150,545

Income tax payable


109,842



102,736



120,573

Other payables and accrued liabilities


250,848



242,832



199,661

Payroll and welfare payable


17,005



11,923



19,522

Current portion of long-term bank loans and other debt


1,295,942



1,077,419



704,695

Current maturities of capital lease obligations


4,403



4,314



3,923

Mandatorily redeemable non-controlling interests


13,184



12,916



12,614

Amounts due to related parties


105,931



69,308



66,230










Total current liabilities


2,708,558



2,286,658



1,981,002










Non- current liabilities









Long-term bank loans


-



360,945



235,885

Other long term debt


1,076,066



1,099,563



974,791

Deferred tax liabilities


179,789



172,894



93,107

Unrecognized tax benefits


20,495



20,494



20,492

Capital lease obligations, net of current maturities


12,314



13,093



15,016

Amounts due to related parties


1,849



1,543



-

TOTAL LIABILITIES


3,999,071



3,955,190



3,320,293










Shareholders' equity









Common shares


16



16



16

Treasury shares


(67,792)



(65,590)



(53,734)

Additional paid-in capital


545,464



542,040



538,414

Statutory reserves


96,371



95,965



95,973

Retained earnings


365,336



357,147



354,274

Accumulated other comprehensive loss/(income)


10,247



(11,256)



(34,683)










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


949,642



918,322



900,260

Non-controlling interest


60,947



33,356



15,892

Total equity


1,010,589



951,678



916,152










TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


5,009,660



4,906,868



4,236,445

 

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SOURCE Xinyuan Real Estate Co., Ltd.