Xinyuan Real Estate Co., Ltd. Announces Third Quarter 2012 Financial Results

 Xinyuan Real Estate Co., Ltd. Announces Third Quarter 2012 Financial Results

- Meets 3Q12 Revenue and Net Income Estimates -

- Exceeds 3Q12 Contract Sales Estimate -

PR Newswire

BEIJING, Nov. 9, 2012

BEIJING, Nov. 9, 2012 /PRNewswire/ --Xinyuan Real Estate Co., Ltd. ("Xinyuan"
or "the Company") (NYSE: XIN), a residential real estate developer with
primary focus on high growth, strategic Tier II cities in China, today
announced its unaudited financial results for the third quarter of 2012.

Highlights for the Third Quarter 2012

  oTotal third quarter revenues were US$226.1 million, a 6.0% increase from
    US$213.3 million reported in the third quarter of 2011, a 10.7% decrease
    from US$253.1 million recorded in the second quarter of 2012, and within
    the range of its third quarter guidance forecast.
  oContract sales totaled US$229.8 million, a 10.6% decrease from US$257.1
    million recorded in the third quarter of 2011, a 10.9% decrease from
    US$258.0 million recorded in the second quarter of 2012 but above the
    range of its third quarter guidance forecast.
  oTotal gross floor area ("GFA") sales were 170,700 square meters, a 9.5%
    decrease from 188,700 square meters sold in the third quarter of 2011 and
    a 12.2% decrease from 194,500 square meters sold in the second quarter of
    2012.
  oSelling, General, and Administrative ("SG&A") expenses as a percent of
    total revenue totaled 6.6% compared to 6.7% in the third quarter of 2011
    and 6.2% in the second quarter of 2012.
  oNet income totaled US$31.9 million, a 2.2% increase from US$31.2 million
    reported in the third quarter of 2011, a 54.0% decrease from US$69.4
    million in the second quarter of 2012, and within the range of its third
    quarter guidance forecast.
  oDiluted net earnings per American Depositary Share ("ADS") attributable to
    shareholders were US$0.44, compared to diluted net earnings per ADS of
    US$0.42, in the third quarter of 2011 and US$0.94 per ADS, in the second
    quarter of 2012.
  oCash and cash equivalents, including restricted cash, increased by US$3.9
    million to US$608.6 million as of September 30, 2012 from US$604.7 million
    as of June 30, 2012. Short and long term debt increased by US$21.8 million
    to US$250.7 million compared to US$228.9 million as of June 30, 2012.
  oIn the third quarter of 2012 the Company purchased 1,151,741 ADS's on the
    open market at a total cost of approximately US$3.2 million under its
    US$20.0 million share repurchase program announced in the second quarter
    of 2012. On October 31, 2012 the Company paid a quarterly dividend of
    US$0.04 per ADS to shareholders of record on October 25, 2012.
  oOn August 9, 2012, the Company acquired a parcel of land in Suzhou for a
    purchase price of US$42.6 million. Based on the proposed development plan,
    the estimated gross floor area is approximately 128,000 square meters. On
    September 29, 2012, the Company acquired a parcel of land in Beijing for a
    total consideration of US$162.4 million. The total site area of 57,862
    square meters and the estimated gross floor area is approximately 130,000
    square meters. These two acquisitions bring the number of projects under
    planning in China to five, all scheduled to commence presales in 2013.
  oIn the third quarter of 2012, the Company acquired two projects in the
    United States. The Company paid US$10.0 million to acquire 15 finished
    luxury condominium units in Irvine, California and acquired a 92,000
    square foot parcel of land in the Williamsburg neighborhood of Brooklyn,
    New York for US$54.2 million, on which 216 condominium units are planned
    to be built with net sellable floor area of approximately 400,000 square
    feet.

Mr. Yong Zhang, Xinyuan's Chairman and Chief Executive Officer said, "We are
very satisfied that our third quarter profit exceeded our guidance forecast
despite the continuation of purchase and mortgage restriction policies by the
Chinese government. Overall consumer demand for our projects remained stable
and average selling prices increased on a sequential basis at the majority of
our projects. In the third quarter, we acquired two parcels of land in China
in the cities of Suzhou and Beijing. As land prices in China remain at
reasonable levels, we plan to acquire more land parcels by auction and direct
negotiation to strengthen our project pipeline for enhanced growth over the
next several years. We remain highly confident in our strategy to offer
affordable developments projects in China."

"At the same time, we are confident that our newly acquired development
project in the United States will serve as a new revenue growth channel for
Xinyuan, particularly with the American real estate market in recovery mode.
We will continue to return shareholder value through our quarterly dividend
payments and share repurchase program."

Financial Results for the Third Quarter 2012

Contract Sales

Contract sales totaled US$229.8 million in the third quarter compared to
US$257.1 million in the third quarter of 2011 and US$258.0 million in the
second quarter of 2012. The Company's GFA sales were 170,700 square meters in
the third quarter of 2012 versus 188,700 square meters in the third quarter of
2011 and 194,500 square meters in the second quarter of 2012. The average
selling price per square meter sold was RMB8,505 (US$1,346) in the third
quarter of 2012 versus RMB8,857 (US$1,362) in the third quarter of 2011 and
RMB8,367 (US$1,326) in the second quarter of 2012. 

Breakdown of GFA Sales and ASP's by Project

                     Q3 2011         Q2 2012         Q3 2012         Unsold
                     GFA      ASP    GFA      ASP    GFA      ASP    GFA
Project              (m^2     (Rmb)  (m^2     (Rmb)  (m^2     (Rmb)  (m^2 000)
                     000)            000)            000)
Chengdu Splendid I   7.6      5,674  3.4      5,739  4.0      5,693  8.4
Chengdu Splendid II  21.0     6,916  20.8     6,905  8.9      7,078  1.8
Zhengzhou Modern     17.4     8,808  12.2     8,399  3.0      14,671 7.4
City
Zhengzhou Royal      12.1     14,388 18.6     10,058 19.6     10,303 66.0
Palace
Zhengzhou Century    25.7     8,705  21.1     8,503  30.8     8,355  54.6
East B
Kunshan Intl City    14.0     9,786  17.8     7,942  41.7     7,851  61.3
Garden
Suzhou Intl City     20.6     10,969 27.5     10,716 10.1     10,843 3.1
Garden
Xuzhou Colorful      7.6      8,785  0.3      6,554  -        -      -
Garden
Jinan Xinyuan        22.9     9,482  33.8     7,783  43.6     7,956  385.5
Splendid
Zhengzhou            38.8     6,928  36.2     7,192  8.7      8,637  13.8
Yipinxiangshan II
Others               1.0      -      2.8      -      0.3      -      3.2
 Total              188.7    8,857  194.5    8,367  170.7    8,505  605.1

Revenue under the Percentage of Completion Method

In the third quarter of 2012, the Company's total revenue using the percentage
of completion method was US$226.1million compared to US$213.3 million in the
third quarter of 2011 and US$253.1 million in the second quarter of 2012.
Construction delays occurred at the Company's Jinan Xinyuan Splendid project
due to technical piling issues from an unexpected geological situation
resulting in a lower than expected percentage of completion for revenue
recognition purposes.

Gross Profit

Gross profit for the third quarter of 2012 was US$65.5 million, or 29.0% of
revenue, compared to gross profit of US$63.8 million, or 29.9% of revenue, in
the third quarter of 2011 and a gross profit of US$77.5 million, or 30.6% of
revenue, in the second quarter of 2012.

The Company revised total project cost and sales projections for certain
projects resulting in the recognition of a US$0.3 million reduction of
cumulative gross profit in the third quarter of 2012 under the percentage of
completion method. This negative change of estimates was largely due to the
Company's decision to endure contractual penalties at its Xuzhou Colorful
Garden project by delaying delivery in order to rectify roof leakage issues
before delivering apartments to Xinyuan's customers.

Selling, General and Administrative Expenses

SG&A expenses were US$14.9 million for the third quarter of 2012 compared to
US$14.2 million for the third quarter of 2011 and US$15.8 million for the
second quarter of 2012. As a percentage of total revenue, SG&A expenses were
6.6% compared to 6.7% in the third quarter of 2011 and 6.2% in the second
quarter of 2012.

Net Income

Net income for the third quarter of 2012 was US$31.9 million compared to
US$31.2 million for the same period in 2011, and US$69.4 million in the second
quarter of 2012. Net margin was 14.1%, compared to 14.6% in the third quarter
of 2011 and 27.4% in the second quarter of 2012. Diluted earnings per ADS
were US$0.44, compared to US$0.42 per ADS in the same period in 2011, and
US$0.94 per ADS in the second quarter of 2012.

Balance Sheet

As of September 30, 2012, the Company reported US$608.6 million in cash and
cash equivalents (including restricted cash) compared to US$604.7 million as
of June 30, 2012. Total debt outstanding was US$250.7 million, an increase of
US$21.8 million compared to US$228.9 million at the end of the second quarter
of 2012. The value of the Company's real estate property under development at
the end of the third quarter was US$631.9 million compared to US$635.3 million
at the end of the second quarter of 2012. In the third quarter, the Company
made payments of US$160 million related to Xuzhou, Suzhou, and Beijing land
acquisitions with an additional US$63 million payable on these purchases in
the fourth quarter of 2012. Also in the third quarter, the Company made
payments of US$36 million on its Irvine, California and Brooklyn, New York
project acquisitions while incurring short term debt of US$29 million on the
Brooklyn project.

Project Status

Below is a summary table of projects that were active in the third quarter of
2012.

                              GFA              Contract Sales          ProjectCost
                              (m^2 000)        (US$ million)           % Complete
                              Total    Sold to Total    Sales   %
 Project                 Active   date    Active   to date
                              Projects         Projects         Sold
Chengdu Splendid I            231.0    222.6   196.1    185.2   94.4%  94.9%
Chengdu Splendid II           216.9    215.1   231.7    229.9   99.2%  93.1%
ZhengzhouModernCity 226.4    219.0   308.6    288.2   93.4%  84.2%
Zhengzhou Royal Palace        132.2    66.2    219.8    129.2   58.8%  73.3%
Zhengzhou Century East B      166.5    111.9   235.4    150.6   64.0%  76.9%
Kunshan Intl City Garden      498.3    437.0   586.9    503.9   85.9%  96.4%
Suzhou Intl City Garden       204.9    201.8   326.2    320.5   98.2%  98.1%
Xuzhou Colorful Garden        101.8    101.8   119.2    119.2   100.0% 93.1%
Jinan Xinyuan Splendid        565.4    179.9   761.9    237.3   31.1%  65.7%
Zhengzhou Yipinxiangshan II   198.5    184.7   228.1    212.7   93.3%  81.3%
Others remaining GFA          3.2
Total active projects         2,545.1  1,940.0 3,213.9  2,376.7 73.9%  83.4%

As of September 30, 2012, unsold GFA in active projects fell to 605,100 square
meters with all but four projects more than 90% sold. The Company's total
sellable GFA for both active projects and projects under planning was
approximately 1,253,100 square meters. Below is a summary of all projects at
Xinyuan that are in the planning stage:

                               UnsoldGFA Pre sales
                               (m^2 000)   Scheduled
                                           
Zhengzhou Century East A       77.3
                                           Q1 2013
Newly Acquired Zhengzhou Land 208.3       Q3 2013
Newly Acquired Xuzhou Land     117.6       Q3 2013
Newly Acquired Suzhou Land    125.2       Q3 2013
Newly Acquired Beijing Land    119.6       Q3 2013
Total projects under planning  648.0
Total active projects          605.1
Total all Xinyuan projects     1,253.1

Fourth Quarter and Full Year 2012 Outlook

With several projects nearly sold out, the Company's sellable inventory is
expected to decrease until new projects are brought on line in 2013. The
Company expects contract sales in the fourth quarter of 2012 to be in the
range of US$150-160 million. For the fourth quarter, revenue under the
percentage of completion method is expected to range between US$140 and US$150
million and net income is expected to be in the range of US$17 to US$20
million.

For the full year 2012, contract sales are expected to be in the range of
US$790 to US$800 million. Revenue under the percentage of completion method is
expected to also range between US$790 and US$800 million and net income is
expected to be in the range of US$140 to US$143
million.

Conference Call Information

Xinyuan's management will host an earnings conference call on November 9^th,
2012 at 8:00 a.m. U.S. Eastern Time. Listeners may access the call by dialing
1-719-325-2393. 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: 4244340.

About Xinyuan Real Estate Co., Ltd.

Xinyuan Real Estate Co., Ltd. ("Xinyuan") (NYSE: 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 I and 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 64.7
million people in eight strategically selected cities, comprising Beijing,
Hefei, Jinan, Kunshan, Suzhou, Zhengzhou, Xuzhou and Chengdu. Xinyuan's U.S.
development arm, XIN Development Group International, Inc. ("XIN") is a
pioneer amongst Chinese real estate residential developers, entering the US
market with three projects in 2012. Xinyuan is the first real estate
developer from China to be listed on the New York Stock Exchange. For more
information, please visit http://www.xyre.com.

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/A for the year ended December 31, 2011. All information
provided in this press release is as of November 9, 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



(Financial Tables on Following Pages)

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
                                                                                 September30,  June 30,     September30,
                                                                                 2012           2012         2011
                                                                                 (unaudited)    (unaudited)  (unaudited)
Revenue 226,062        253,059      213,272
Cost of revenue                                                                  (160,576)      (175,569)    (149,464)
Gross profit                                                                     65,486         77,490       63,808
Selling and distribution expenses                                                (5,220)        (4,825)      (6,773)
General and administrative expenses                                              (9,667)        (10,974)     (7,453)
Operating income                                                                 50,599         61,691       49,582
Interest income                                                                  2,827          1,923        1,230
Income from operations before income taxes                                       53,426         63,614       50,812
Income taxes                                                                     (21,498)       5,752        (19,591)
Net income                                                                       31,928         69,366       31,221
Less: net income attributable to non-controlling interest                        -              410          (59)
Net income attributable to shareholders                                          31,928         68,956       31,280
Earnings per share:
Basic                                                                           0.44           0.95         0.42
Diluted                                                                         0.44           0.94         0.42
Shares used in computation:
Basic                                                                           71,839         72,955       75,507
Diluted                                                                         72,076         73,480       75,507





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)
                                                  Nine months ended
                                                  September 30,  September 30,
                                                  2012           2011
                                                  (unaudited)    (unaudited)
Revenue                                           651,705        487,738
Cost of revenue                                   (459,502)      (344,370)
Gross profit                                      192,203        143,368
Selling expenses                                  (13,517)       (12,564)
General and administrative expenses               (29,134)       (19,225)
Operating income                                  149,552        111,579
Interest income                                   6,078          2,712
Exchange gains                                    -              56
Income from operations before income taxes        155,630        114,347
Income taxes                                      (31,091)       (39,651)
Net income                                        124,539        74,696
Less: net income attributable to non-controlling  1,110          593
interest
Net income attributable to shareholders           123,429        74,103
Earnings per share:
Basic                                            1.70           0.98
Diluted                                          1.70           0.98
Shares used in computation:
Basic                                            72,521         76,220
Diluted                                          72,750         76,220





                     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,
                                     2012           2012         2011
                                     (unaudited)   (unaudited) (audited)
ASSETS
Current assets
Cash and cash equivalents            443,091        421,378      319,218
Restricted cash                      165,537        183,286      168,384
Accounts receivable                  2,876          6,598        20,806
Other receivables                    8,831          14,759       13,352
Other deposits and prepayments       216,296        75,838       60,006
Advances to suppliers                14,056         18,427       13,579
Real estate property development     1,939          2,328        6,775
completed
Real estate property under           631,945        635,255      761,871
development
Other current assets                 18,566         8,855        659
Total current assets                 1,503,137      1,366,724    1,364,650
Real estate properties held for      21,715         23,538       18,527
lease, net
Property and equipment, net          2,580          2,691        2,981
Other long-term investment           239            240          242
Deferred tax asset                   1,529          1,519        1,307
Other assets                         2,280          2,471        2,907
TOTAL ASSETS                         1,531,480      1,397,183    1,390,614



                      XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (All US$ amounts and number of shares data in thousands)
                                      September30,  June 30,    December31,
                                      2012           2012        2011
                                      (unaudited)    (unaudited) (audited)
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable                      254,369        209,634     235,911
Short-term bank loans                 56,763         66,819      42,950
Customer deposits                     131,002        106,426     69,524
Income tax payable                    35,977         30,524      69,909
Deferred tax liabilities              43,142         32,712      22,175
Other payables and accrued            53,437         52,755      50,970
liabilities
Payroll and welfare payable           10,746         8,247       7,018
Current portion of long-term bank     168,941        162,115     129,403
loans and other debt
Total current liabilities             754,377        669,232     627,860
Non- current liabilities
Long-term bank loans                  25,000         -           73,482
Unrecognized tax benefits             8,765          8,787       13,824
Other long-term debt                  -              -           39,709
TOTAL LIABILITIES                     788,142        678,019     754,875
Shareholders' equity
Common shares                         15             15          15
Treasury shares                       (13,667)       (10,496)    (7,959)
Additional paid-in capital            511,331        510,894     509,713
Statutory reserves                    33,579         33,579      33,579
Retained earnings                     212,080        185,172     99,280
TOTAL SHAREHOLDERS' EQUITY            743,338        719,164     634,628
Non-controlling interest              -              -           1,111
TOTAL EQUITY                          743,338        719,164     635,739
TOTAL LIABILITIES AND EQUITY          1,531,480      1,397,183   1,390,614



SOURCE Xinyuan Real Estate Co., Ltd.

Website: http://www.xyre.com
 
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