UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
FOR THE MONTH OF AUGUST 2018
COMMISSION FILE NUMBER: 001-33863
XINYUAN REAL ESTATE CO., LTD.
27/F, China Central Place, Tower II
79 Jianguo Road, Chaoyang District
Beijing 100025
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________.
TABLE OF CONTENTS
| Page | |
| Signature | 2 |
| Exhibit 99.1 Xinyuan Real Estate Co., Ltd. Press Release dated August 15, 2018 | |
| Exhibit 99.2 Xinyuan Real Estate Co., Ltd. Press Release dated August 15, 2018 |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Xinyuan Real Estate Co., Ltd. | ||
| By: |
/s/ Xuefeng Li | |
| Name: | Xuefeng Li | |
| Title: | Interim CFO | |
Date: August 15, 2018
2
Exhibit 99.1
Xinyuan Real Estate Co., Ltd. Announces Second Quarterly Dividend for 2018
BEIJING, August 15, 2018 – Xinyuan Real Estate Co., Ltd. (“Xinyuan” or the “Company”) (NYSE: XIN), an NYSE-listed real estate developer and property manager operating primarily in China and also in other countries, today announced that its Board of Directors has declared a cash dividend for the second quarter of 2018 of US$0.05 per common share, or US$0.10 per American Depositary Share (“ADS”), which will be payable before September 12, 2018 to shareholders of record as of August 27, 2018.
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 in other countries. In China, the Company 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, and Suzhou. 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. The Company 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.
Safe Harbor Statement
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, 2017. 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.
For more information, please contact:
Xinyuan Real Estate Co., Ltd.
Mr. Charles Wang
Investor Relations Director
Tel: +86 (10) 8588-9376
Email: irteam@xyre.com
ICR, LLC
Investors:
Mr. William Zima
In U.S.: +1-646-308-1472
Email: William.zima@icrinc.com
Media:
Mr. Edmond Lococo
In China: +86 (10) 6583-7510
Email: Edmond.Lococo@icrinc.com
Exhibit 99.2
Xinyuan Real Estate Co., Ltd. Announces Second Quarter 2018 Financial Results
BEIJING, China, August 15, 2018 - 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 second quarter ended June 30, 2018.
Second Quarter 2018 Highlights
| · | Under ASC 606, the Company expects to recognize revenue for contracts executed starting from January 1, 2018, on an “over time” basis using costs incurred, an input measure. |
| · | Second quarter results reflect the adoption of ASC 606 and may not be directly comparable to prior periods. |
| · | The adoption of ASC 606 reduced second quarter reported revenues and net income by $212.8 million and $29.2 million, respectively. |
| · | Contract sales decreased 13.4% to US$633.9 million from US$732.4 million in the second quarter of 2017 and increased 66.5% from US$380.7 million in the first quarter of 2018. |
| · | Total revenue decreased 26.1% to US$360.6 million from US$488.2 million in the second quarter of 2017 and increased 107.1% from US$174.1 million in the first quarter of 2018. |
| · | Gross profit increased 3.4% to US$111.6 million, or 30.9% of total revenue, from US$107.9 million, or 22.1% of total revenue, in the second quarter of 2017 and increased 188.4% from US$38.7 million, or 22.2% of total revenue, in the first quarter of 2018. |
| · | Selling, General and Administrative (“SG&A”) expenses as a percentage of total revenue increased to 12.6% from 9.8% in the second quarter of 2017 and decreased from 22.9% in the first quarter of 2018. |
| · | Net loss was US$9.1 million compared to net income of US$20.8 million in the second quarter of 2017 and net loss of US$12.7 million in the first quarter of 2018. Exchange gains of $11.6 million in the first quarter of 2018 swung to exchange losses in Q2 2018 as the RMB weakened against the US dollar. |
| · | Diluted net loss per American Depositary Share (“ADS”) attributable to shareholders were US$0.11 compared to diluted net earnings per ADS of US$0.14 in the second quarter of 2017 and net loss per ADS of US$0.16 in the first quarter of 2018. |
Mr. Yong Zhang, Xinyuan’s Chairman, stated, “During the second quarter of 2018, our contract sales experienced downward pressure because of tightened regulations on China’s property market. Also, our revenue recognition was delayed due to ASC606 adoption. Despite these factors, we managed to double our revenue and grow our contract sales by two-thirds since the first quarter of 2018.”
1
Mr. Zhang continued, “In the second quarter of 2018, we continued to progress as planned with our domestic pre-sales and overseas projects. We commenced pre-sales of three projects, Zhengzhou International New City III D, Zhengzhou International New City III B, and Zhengzhou Hangmei International Wisdom City I. We were also able to expand our land bank with the strategic acquisition of 6 pieces of land: Zhengzhou International New City, Zhengzhou Hangmei International Wisdom City, Wuhan New Project, Jinan Zhangqiu Project, Suzhou New Project, and Qingdao West Coast Project. With an enlarged land bank, and an expanded global footprint, we are well positioned for long-term growth.
“Despite persistent regulatory headwinds, we remain optimistic about the financial outlook for the rest of the year. We are also proud of our ability to deliver sustainable value to shareholders via a consistent quarterly dividend payout.” concluded Mr. Zhang.
Second Quarter 2018 Financial Results
Contract Sales
Contract sales in China totaled US$630.3 million in the second quarter compared to US$711.8 million in the second quarter of 2017 and US$375.5 million in the first quarter of 2018.
The Company’s GFA sales in China were 282,900 square meters in the second quarter of 2018 compared to 409,700 square meters in the second quarter of 2017 and 149,800 square meters in the first quarter of 2018.
The average selling price (“ASP”) per square meter sold in China was RMB14,173 (US$2,226) in the second quarter of 2018 compared to RMB11,946 (US$1,739) in the second quarter of 2017 and RMB15,932 (US$2,506) in the first quarter of 2018.
Contract sales in the United States totaled US$3.6 million in the second quarter of 2018.
The Company commenced pre-sales of three new projects in the second quarter of 2018, Zhengzhou International New City III D, Zhengzhou International New City III B and Zhengzhou Hangmei International Wisdom City I, which contributed 34.3% and 31.3% of total GFA sales and total contract sales, respectively.
Breakdown of GFA Sales and ASPs by Project in China
| Project | Q2 2017 | Q1 2018 | Q2 2018 | |||||||||||||||||||||
| GFA | ASP | GFA | ASP | GFA | ASP | |||||||||||||||||||
| (m2 ’000s) | (RMB) | (m2 ’000s) | (RMB) | (m2 ’000s) | (RMB) | |||||||||||||||||||
| Xingyang Splendid II | 15.4 | 5,265 | - | - | 0.3 | 9,939 | ||||||||||||||||||
| Kunshan Royal Palace | 5.3 | 24,173 | (0.2 | ) | 22,314 | 0.2 | 22,313 | |||||||||||||||||
| Jinan Royal Palace | 13.2 | 10,508 | 22.4 | 12,626 | 27.4 | 16,341 | ||||||||||||||||||
| Xuzhou Colorful City | 2.8 | 13,385 | 3.6 | 10,265 | 0.8 | 10,495 | ||||||||||||||||||
| Chengdu Thriving Family | 6.0 | 19,194 | 4.5 | 17,183 | 1.3 | 16,011 | ||||||||||||||||||
| Changsha Xinyuan Splendid | 28.2 | 9,521 | 2.6 | 15,130 | 3.7 | 15,869 | ||||||||||||||||||
| Sanya Yazhou Bay No.1 | 8.1 | 15,888 | 30.9 | 23,197 | 12.0 | 25,758 | ||||||||||||||||||
| Xi’an Metropolitan | 9.5 | 9,553 | 1.5 | 9,594 | 4.5 | 7,480 | ||||||||||||||||||
| Zhengzhou Xindo Park | 22.9 | 6,998 | 0.1 | 10,000 | 0.4 | 7,560 | ||||||||||||||||||
| Jinan Xin Central | 8.3 | 13,928 | 12.2 | 10,527 | 9.2 | 14,073 | ||||||||||||||||||
| Henan Xin Central I | 3.4 | 16,229 | 0.3 | 18,486 | 1.0 | 15,342 | ||||||||||||||||||
| Zhengzhou Fancy City I | 2.6 | 19,015 | 0.2 | 19,949 | 1.2 | 10,989 | ||||||||||||||||||
| Zhengzhou Fancy City II (South) | 7.6 | 12,649 | 1.2 | 13,031 | 0.8 | 14,103 | ||||||||||||||||||
| Tianjin Spring Royal Palace I | 11.0 | 11,118 | 1.1 | 14,631 | 0.1 | 16,294 | ||||||||||||||||||
| Kunshan Xindo Park | 10.6 | 20,523 | 2.3 | 23,009 | 4.3 | 23,585 | ||||||||||||||||||
| Zhengzhou International New City I | 207.4 | 12,084 | 2.4 | 13,322 | 6.0 | 25,102 | ||||||||||||||||||
| Henan Xin Central II | 27.2 | 11,293 | 7.7 | 11,768 | 6.2 | 12,351 | ||||||||||||||||||
| Xingyang Splendid III | 15.5 | 6,981 | 16.2 | 7,381 | 13.2 | 7,934 | ||||||||||||||||||
| Changsha Mulian Royal Palace | - | - | 2.0 | 16,177 | 29.2 | 10,188 | ||||||||||||||||||
| Zhengzhou International New City II | - | - | 11.8 | 13,739 | 1.7 | 13,671 | ||||||||||||||||||
| Zhengzhou International New City III A | - | - | 20.4 | 13,802 | 1.2 | 13,611 | ||||||||||||||||||
| Zhengzhou Fancy City II (North) | - | - | 2.3 | 9,813 | 35.3 | 9,801 | ||||||||||||||||||
| Tianjin Spring Royal Palace II | - | - | 2.7 | 13,412 | 11.5 | 14,124 | ||||||||||||||||||
| Zhengzhou International New City III D | - | - | - | - | 29.6 | 14,282 | ||||||||||||||||||
| Zhengzhou Hangmei International Wisdom City I | - | - | - | - | 16.2 | 7,195 | ||||||||||||||||||
| Zhengzhou International New City III B | - | - | - | - | 51.3 | 13,996 | ||||||||||||||||||
| Others | 4.7 | - | 1.6 | - | 14.3 | - | ||||||||||||||||||
| Total | 409.7 | 11,946 | 149.8 | 15,932 | 282.9 | 14,173 | ||||||||||||||||||
2
Revenue
In the second quarter of 2018, the Company’s total revenue decreased 26.1% to US$360.6 million from US$488.2 million in the second quarter of 2017 and increased 107.1% from US$174.1 million in the first quarter of 2018.
Gross Profit
Gross profit for the second quarter of 2018 was US$111.6 million, or 30.9% of revenue, compared to a gross profit of US$107.9 million, or 22.1% of revenue, in the second quarter of 2017 and a gross profit of US$38.7 million, or 22.2% of revenue, in the first quarter of 2018.
Selling, General and Administrative Expenses
SG&A expenses were US$45.6 million for the second quarter of 2018 compared to US$47.9 million for the second quarter of 2017 and US$39.8 million for the first quarter of 2018. As a percentage of total revenue, SG&A expenses were 12.6% compared to 9.8% in the second quarter of 2017 and 22.9% in the first quarter of 2018.
Net Income/(loss)
The Company experienced a net loss in the second quarter of 2018 due to the decrease of revenue, foreign currency exchange loss, and interest expenses. Net loss for the second quarter of 2018 was US$9.1 million compared to net income of US$20.8 million for the second quarter of 2017 and net loss of US$12.7 million for the first quarter of 2018. Net margin decreased from 4.3% in the second quarter of 2017 and increased from negative 7.3% in the first quarter of 2018 to negative 2.5% for the second quarter of 2018. Diluted net loss was US$0.11 per ADS in the second quarter of 2018 compared to diluted net earnings of US$0.14 per ADS in the second quarter of 2017 and diluted net loss of US$0.16 per ADS in the first quarter of 2018.
Balance Sheet
As of June 30, 2018, the Company’s cash and cash equivalents (including restricted cash) increased to US$1,450.8 million from US$1,191.8 million as of March 31, 2018. Total debt outstanding was US$3,585.5 million, which reflected a decrease of US$228.7 million compared to US$3,814.2 million at the end of the first quarter of 2018. The balance of the Company’s real estate properties under development at the end of the second quarter of 2018 was US$3,707.3 million compared to US$3,457.1 million at the end of the first quarter of 2018.
Adoption of ASC606
On January 1, 2018, the Company adopted ASC 606: Revenue from Contracts with Customers (“ASC 606”) issued by the Financial Accounting Standards Board. The Company adopted ASC 606 using the modified retrospective approach and applied the adoption only to contracts not completed as of the date of adoption, with no restatement of comparative periods, and a cumulative-effect adjustment to retained earnings recognized as of the date of adoption.
3
The following tables show the actual annual 2017 operating results and the annual 2017 operating results if the Company had adopted ASC 606 on January 1, 2017.
2017 Financial Results Prior to ASC 606
| 2017 Total | 2017 Q1 | 2017 Q2 | 2017 Q3 | 2017 Q4 | ||||||||||||||||
| USD’000 | USD’000 | USD’000 | USD’000 | USD’000 | ||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
| Contract Sales | 2,465,663 | 305,382 | 732,476 | 604,520 | 823,285 | |||||||||||||||
| 1. Revenue | 1,976,907 | 280,714 | 488,165 | 482,373 | 725,655 | |||||||||||||||
| Gross Profit | 459,628 | 62,567 | 107,922 | 108,842 | 180,297 | |||||||||||||||
| Gross Profit Margin | 23.2 | % | 22.3 | % | 22.1 | % | 22.6 | % | 24.8 | % | ||||||||||
| SG&A | 212,568 | 35,505 | 47,894 | 50,976 | 78,193 | |||||||||||||||
| Interest Expense | 66,153 | 9,325 | 20,195 | 11,418 | 25,215 | |||||||||||||||
| 2. Profit Before Income Taxes | 193,228 | 22,042 | 46,678 | 38,895 | 85,613 | |||||||||||||||
| Income Taxes | 113,117 | 14,625 | 25,901 | 22,366 | 50,225 | |||||||||||||||
| 3. Net Profit | 80,111 | 7,417 | 20,777 | 16,529 | 35,388 | |||||||||||||||
2017 Financial Results Adjusted for ASC 606 Adoption
| 2017 Total | 2017 Q1 | 2017 Q2 | 2017 Q3 | 2017 Q4 | ||||||||||||||||
| USD’000 | USD’000 | USD’000 | USD’000 | USD’000 | ||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
| Contract Sales | 2,465,663 | 305,382 | 732,476 | 604,520 | 823,285 | |||||||||||||||
| 1. Revenue | 1,584,038 | 354,572 | 184,834 | 247,499 | 797,133 | |||||||||||||||
| Gross Profit | 346,635 | 70,098 | 31,576 | 49,599 | 195,362 | |||||||||||||||
| Gross Profit Margin | 21.9 | % | 19.8 | % | 17.1 | % | 20.0 | % | 24.5 | % | ||||||||||
| SG&A | 212,568 | 35,505 | 47,894 | 50,976 | 78,193 | |||||||||||||||
| Interest Expense | 66,153 | 9,325 | 20,195 | 11,418 | 25,215 | |||||||||||||||
| 2. Profit Before Income Taxes | 80,235 | 29,573 | (29,669 | ) | (20,347 | ) | 100,678 | |||||||||||||
| Income Taxes | 75,653 | 19,295 | 890 | 7,991 | 47,477 | |||||||||||||||
| 3. Net Profit | 4,582 | 10,278 | (30,559 | ) | (28,338 | ) | 53,201 | |||||||||||||
4
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 2018.
| Project | GFA | |||||||||||
| (m2 ’000s) | ||||||||||||
| Total Active Project | Sold to date | Unsold to date | ||||||||||
| Xingyang Splendid II | 137.3 | 81.7 | 55.6 | |||||||||
| Kunshan Royal Palace | 280.6 | 278.9 | 1.7 | |||||||||
| Jinan Royal Palace | 449.5 | 399.9 | 49.6 | |||||||||
| Xuzhou Colorful City | 130.7 | 119.7 | 11.0 | |||||||||
| Chengdu Thriving Family | 203.4 | 197.0 | 6.4 | |||||||||
| Changsha Xinyuan Splendid | 251.7 | 245.1 | 6.6 | |||||||||
| Sanya Yazhou Bay No.1 | 117.6 | 101.4 | 16.2 | |||||||||
| Xi’an Metropolitan | 290.6 | 265.5 | 25.1 | |||||||||
| Zhengzhou Xindo Park | 144.4 | 127.8 | 16.6 | |||||||||
| Jinan Xin Central | 194.4 | 178.4 | 16.0 | |||||||||
| Henan Xin Central I | 262.2 | 252.1 | 10.1 | |||||||||
| Zhengzhou Fancy City I | 166.7 | 159.9 | 6.8 | |||||||||
| Tianjin Spring Royal Palace I | 139.2 | 131.0 | 8.2 | |||||||||
| Zhengzhou Fancy City II (South) | 84.1 | 81.5 | 2.6 | |||||||||
| Kunshan Xindo Park | 89.0 | 80.4 | 8.6 | |||||||||
| Zhengzhou International New City I | 360.5 | 335.9 | 24.6 | |||||||||
| Henan Xin Central II | 109.8 | 103.6 | 6.2 | |||||||||
| Xingyang Splendid III | 121.1 | 112.0 | 9.1 | |||||||||
| Changsha Mulian Royal Palace | 91.1 | 85.7 | 5.4 | |||||||||
| Zhengzhou International New City II | 176.0 | 159.2 | 16.8 | |||||||||
| Zhengzhou International New City III A | 96.0 | 95.4 | 0.6 | |||||||||
| Zhengzhou Fancy City II (North) | 108.5 | 77.2 | 31.3 | |||||||||
| Tianjin Spring Royal Palace II | 144.0 | 14.1 | 129.9 | |||||||||
| Zhengzhou International New City III D | 46.1 | 29.7 | 16.4 | |||||||||
| Zhengzhou Hangmei International Wisdom City I | 64.7 | 16.1 | 48.6 | |||||||||
| Zhengzhou International New City III B | 118.8 | 51.3 | 67.5 | |||||||||
| Others | 66.8 | - | 66.8 | |||||||||
| Total active projects | 4,444.8 | 3,780.5 | 664.3 | |||||||||
5
As of August 10, 2018, the Company’s total saleable GFA was approximately 5,992,900 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 | |||||
| Tongzhou Xinyuan Royal Palace | 102.3 | To be determined | ||||
| Changsha Furong Thriving Family | 72.3 | 2018Q3 | ||||
| Xinyuan Chang’an Royal Palace | 226.0 | To be determined | ||||
| Xinyuan Golden Water View City | 340.0 | 2018Q4 | ||||
| Kunshan Xinyu Jiayuan | 109.3 | 2018Q3 | ||||
| Zhengzhou International New City Land Bank (all land is grouped together and will be developed gradually) | 1,689.5 | 2018Q4 | ||||
| Zhuhai Xin World | 70.0 | To be determined | ||||
| Lingshan Bay Dragon Seal | 380.0 | To be determined | ||||
| Zhengzhou Fancy City III | 83.0 | 2018Q4 | ||||
| Zhengzhou Hangmei Project Land Bank (all land is grouped together and will be developed gradually) | 268.5 | 2018Q3 | ||||
| Zhengzhou Zhongmou Project | 480.0 | To be determined | ||||
| Suzhou Yinhewan Project | 89.7 | 2018Q4 | ||||
| Suzhou Wujiang New City | 63.0 | 2018Q3 | ||||
| Chengdu Xinyuan City | 873.0 | 2018Q3 | ||||
| Wuhan New Project(newly added) | 185.0 | To be determined | ||||
| Jinan Zhangqiu Project(newly added) | 118.0 | To be determined | ||||
| Suzhou New Project(newly added) | 24.0 | 2018Q4 | ||||
| Qingdao West Coast Project(newly added) | 155.0 | 2018Q4 | ||||
| Total projects under planning | 5,328.6 | |||||
| Total active projects | 664.3 | |||||
| Total of all Xinyuan unsold projects in China | 5,992.9 | |||||
Real Estate Project Update in the United States
As of June 30, 2018, a total of 176 units out of 216 units had been sold and closed at the Company’s Oosten project in Brooklyn, New York City, with a total revenue from this project reaching US$259.3 million. During the first half of 2018, revenues were US$8.8 million.
Excavation and foundation work was completed in the first half of 2018 for the Company’s Hudson Garden project in the Hell’s Kitchen area of Manhattan, New York City. The design drawings were optimized, increasing the number of units from 82 to 92. Of the 38,000 SF of retail/commercial space a total of 29,000 SF has been leased to the U.S. department store retailer Target with a 20-year lease. The shell of the building is scheduled to begin in September 2018, with facade, core mechanical, and electrical installations to follow. Soft launch of sales is scheduled to begin in the last quarter of 2018.
The Company continues to execute on the planning, governmental approvals, and pre-development activities of its ground-up project in Flushing, New York City. The Landmark Protection Committee approved the Company’s landmark protection plan and awarded the Company a Certificate of Appropriateness. The Company has begun the protection, master molds, and removal of landmarked artifacts and will transfer them in the third quarter of 2018. Offsite restoration work will follow at a later date.
6
Real Estate Project Update in the United Kingdom
During the second quarter of 2018, the structural core of the Madison project has been constructed up to the 23rd floor out of a total 53 floors. Construction remains on programmed for completion in 2020.
Of the 423 residential units in The Madison, all of the 104 Affordable Housing apartments have been pre-sold to a regulated affordable housing provider. Of the remaining 319 apartments, 130 apartments have been sold. UK inquiry levels remained robust during the period despite ongoing political uncertainty caused by Brexit and the transition into the typically quieter summer sales season.
Business Outlook
The 2018 business outlook reflects the modified retrospective adoption of ASC 606 and may not be comparable to prior year periods.
For the third quarter of 2018, the Company expects contract sales to be approximately US$540 million.
For 2018, the Company expects an increase in contract sales of about 10% and an increase in consolidated net income of 15% to 20% over 2017.
Conference Call Information
The Company will hold a conference call at 8:00 am ET on August 15, 2018 to discuss second quarter 2018 results. Listeners may access the call by dialing:
US Toll Free: 1-866-575-6539
International: 1-323-994-2082
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 22, 2018 by dialing:
US: 1-844-512-2921
International: 1-412-317-6671
Access code: 3902086
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.
7
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, 2017. 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. Charles Wang
Investor Relations Director
Tel: +86 (10) 8588-9376
Email: irteam@xyre.com
ICR, LLC
In U.S.: +1-646-308-1472
Email: William.zima@icrinc.com
Media:
Edmond Lococo
In China: +86 (10) 6583-7510
Email: Edmond.Lococo@icrinc.com
8
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, | ||||||||||
| 2018 | 2018 | 2017 | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Total revenue | 360,569 | 174,097 | 488,165 | |||||||||
| Total costs of revenue | (248,921 | ) | (135,394 | ) | (380,242 | ) | ||||||
| Gross profit | 111,648 | 38,703 | 107,923 | |||||||||
| Selling and distribution expenses | (13,819 | ) | (12,174 | ) | (18,072 | ) | ||||||
| General and administrative expenses | (31,773 | ) | (27,592 | ) | (29,823 | ) | ||||||
| Operating income/(loss) | 66,056 | (1,063 | ) | 60,028 | ||||||||
| Interest income | 6,678 | 6,350 | 4,375 | |||||||||
| Interest expense | (26,592 | ) | (29,785 | ) | (20,195 | ) | ||||||
| Net realized gain on short-term investments | 2 | 1,237 | 2,257 | |||||||||
| Unrealized (loss)/gains on short-term investments | (700 | ) | (242 | ) | 524 | |||||||
| Other (expense)/income | (1,037 | ) | 207 | - | ||||||||
| Exchange (loss)/gains | (21,374 | ) | 11,639 | (46 | ) | |||||||
| Share of loss of equity investees | (3,227 | ) | (921 | ) | (265 | ) | ||||||
| Income/(loss) from operations before income taxes | 19,806 | (12,578 | ) | 46,678 | ||||||||
| Income taxes | (28,952 | ) | (142 | ) | (25,901 | ) | ||||||
| Net (loss)/income | (9,146 | ) | (12,720 | ) | 20,777 | |||||||
| Net (loss)/ income attributable to non-controlling interest | 2,207 | 2,315 | (11,698 | ) | ||||||||
| Net (loss)/income attributable to Xinyuan Real Estate Co., Ltd. shareholders | (6,939 | ) | (10,405 | ) | 9,079 | |||||||
| (Loss)/earnings per ADS: | ||||||||||||
| Basic | (0.11 | ) | (0.16 | ) | 0.14 | |||||||
| Diluted | (0.11 | ) | (0.16 | ) | 0.14 | |||||||
| ADS used in computation: | ||||||||||||
| Basic | 64,921 | 64,821 | 64,324 | |||||||||
| Diluted | 65,816 | 65,805 | 65,622 | |||||||||
9
| Six months ended | ||||||||
| June 30, | June 30, | |||||||
| 2018 | 2017 | |||||||
| (unaudited) | (unaudited) | |||||||
| Total revenue | 534,666 | 768,878 | ||||||
| Total costs of revenue | (384,314 | ) | (598,389 | ) | ||||
| Gross profit | 150,352 | 170,489 | ||||||
| Selling and distribution expenses | (25,993 | ) | (28,559 | ) | ||||
| General and administrative expenses | (59,365 | ) | (54,840 | ) | ||||
| Operating income | 64,994 | 87,090 | ||||||
| Interest income | 13,027 | 6,974 | ||||||
| Interest expense | (56,377 | ) | (29,521 | ) | ||||
| Net realized gain on short-term investments | 1,239 | 2,845 | ||||||
| Unrealized (loss)/gains on short-term investments | (941 | ) | 1,778 | |||||
| Other (expense)/income | (830 | ) | 159 | |||||
| Exchange loss | (9,735 | ) | (97 | ) | ||||
| Share of loss of equity investees | (4,149 | ) | (508 | ) | ||||
| Income from operations before income taxes | 7,228 | 68,720 | ||||||
| Income taxes | (29,093 | ) | (40,525 | ) | ||||
| Net (loss)/income | (21,865 | ) | 28,195 | |||||
| Net (loss)/ income attributable to non-controlling interest | 4,522 | (11,656 | ) | |||||
| Net (loss)/income attributable to Xinyuan Real Estate Co., Ltd. shareholders | (17,343 | ) | 16,539 | |||||
| (Loss)/earnings per ADS: | ||||||||
| Basic | (0.27 | ) | 0.26 | |||||
| Diluted | (0.26 | ) | 0.26 | |||||
| ADS used in computation: | ||||||||
| Basic | 64,921 | 64,159 | ||||||
| Diluted | 65,642 | 65,779 | ||||||
10
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, | ||||||||||
| 2018 | 2018 | 2017 | ||||||||||
| (unaudited) | (unaudited) | (audited) | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 1,066,507 | 813,736 | 894,551 | |||||||||
| Restricted cash | 384,276 | 378,077 | 566,676 | |||||||||
| Short-term investments | 99,409 | 123,478 | 57,740 | |||||||||
| Accounts receivable | 37,508 | 10,912 | 100,553 | |||||||||
| Other receivables | 50,158 | 49,422 | 73,194 | |||||||||
| Deposits for land use rights | 202,255 | 97,669 | 103,716 | |||||||||
| Other deposits and prepayments | 184,903 | 674,320 | 272,022 | |||||||||
| Advances to suppliers | 50,582 | 45,524 | 36,731 | |||||||||
| Real estate properties development completed | 715,893 | 813,542 | 840,393 | |||||||||
| Real estate properties under development | 3,707,284 | 3,457,139 | 1,996,001 | |||||||||
| Contract asset | 16,990 | - | - | |||||||||
| Amounts due from related parties | 149,702 | 187,644 | 125,662 | |||||||||
| Amounts due from employees | 3,298 | 5,187 | 2,174 | |||||||||
| Other current assets | 657 | 454 | 799 | |||||||||
| Total current assets | 6,669,422 | 6,657,104 | 5,070,212 | |||||||||
| Real estate properties held for lease, net | 284,948 | 287,457 | 277,933 | |||||||||
| Property and equipment, net | 30,287 | 32,707 | 32,386 | |||||||||
| Long-term investment | 844,903 | 982,714 | 829,773 | |||||||||
| Deferred tax assets | 140,899 | 153,558 | 82,006 | |||||||||
| Deposits for land use rights | 22,669 | 23,854 | 22,956 | |||||||||
| Amounts due from related parties | 30,020 | 30,871 | 24,666 | |||||||||
| Other assets | 162,261 | 46,809 | 44,502 | |||||||||
| TOTAL ASSETS | 8,185,409 | 8,215,074 | 6,384,434 | |||||||||
11
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, | ||||||||||
| 2018 | 2018 | 2017 | ||||||||||
| (unaudited) | (unaudited) | (audited) | ||||||||||
| LIABILITIES AND | ||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable and notes payable | 489,866 | 462,161 | 690,839 | |||||||||
| Short-term bank loans and other debt | 167,338 | 264,130 | 247,758 | |||||||||
| Customer deposits | 2,634,724 | 2,429,980 | 438,342 | |||||||||
| Income tax payable | 130,764 | 159,391 | 169,839 | |||||||||
| Other payables and accrued liabilities | 267,744 | 279,251 | 300,120 | |||||||||
| Payroll and welfare payable | 9,855 | 8,973 | 31,445 | |||||||||
| Current portion of long-term bank loans and other debt | 1,690,379 | 1,987,650 | 1,648,233 | |||||||||
| Current maturities of capital lease obligations | 5,059 | 4,647 | 4,472 | |||||||||
| Mandatorily redeemable non-controlling interests | 15,853 | 16,522 | 15,593 | |||||||||
| Amounts due to related parties | 54,583 | 140,993 | 128,178 | |||||||||
| Total current liabilities | 5,466,165 | 5,753,698 | 3,674,819 | |||||||||
| Non-current liabilities | ||||||||||||
| Long-term bank loans | 297,524 | 100,523 | 11,019 | |||||||||
| Other long term debt | 1,430,226 | 1,461,869 | 1,404,814 | |||||||||
| Deferred tax liabilities | 157,468 | 120,320 | 164,204 | |||||||||
| Unrecognized tax benefits | 31,231 | 31,231 | 31,231 | |||||||||
| Capital lease obligations, net of current maturities | 8,408 | 10,701 | 11,415 | |||||||||
| Amounts due to related parties | 114,411 | 31,831 | 29,919 | |||||||||
| TOTAL LIABILITIES | 7,505,433 | 7,510,173 | 5,327,421 | |||||||||
| Shareholders’ equity | ||||||||||||
| Common shares | 16 | 16 | 16 | |||||||||
| Treasury shares | (70,757 | ) | (67,792 | ) | (67,792 | ) | ||||||
| Additional paid-in capital | 546,207 | 544,911 | 543,338 | |||||||||
| Statutory reserves | 105,848 | 105,848 | 105,660 | |||||||||
| Retained earnings | 85,498 | 81,185 | 382,124 | |||||||||
| Accumulated other comprehensive loss | 13,077 | 51,382 | 29,226 | |||||||||
| Total Xinyuan Real Estate Co., Ltd. shareholders’ equity | 679,889 | 715,550 | 992,572 | |||||||||
| Non-controlling interest | 87 | (10,649 | ) | 64,441 | ||||||||
| Total equity | 679,976 | 704,901 | 1,057,013 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 8,185,409 | 8,215,074 | 6,384,434 | |||||||||
12