Xinyuan Real Estate Co., Ltd. Announces Fourth Quarter and Full Year 2013 Financial Results --4Q13 Contract Sales Exceeds Mid-Point of Previous Guidance by 19.8%-- --4Q13 Revenue Exceeds Mid-Point of Previous Guidance by 11.2%-- PR Newswire BEIJING, Feb. 28, 2014 BEIJING, Feb. 28, 2014 /PRNewswire/ --Xinyuan Real Estate Co., Ltd. ("Xinyuan" or "the Company") (NYSE: XIN), a residential real estate developer with a primary focus on high growth cities in China, today announced its unaudited financial results for the fourth quarter and full year of 2013. Highlights for the Fourth Quarter 2013 oTotal fourth quarter revenues were US$289.2 million, a 20.1% increase from US$240.7 million recorded in the third quarter of 2013 and a 9.9% increase from US$263.1 million reported in the fourth quarter of 2012. Fourth quarter revenue exceeded the mid-point of previous guidance of US$260.0 million by 11.2%. oContract sales totaled US$377.5 million, a 54.9% increase from US$243.7 million recorded in the third quarter of 2013 and a 100.4% increase from US$188.4 million recorded in the fourth quarter of 2012. Fourth quarter contract sales exceeded the mid-point of previous guidance of US$315.0 million by 19.8%. oTotal gross floor area ("GFA") sales were 241,700 square meters, a 59.1% increase from 151,900 square meters sold in the third quarter of 2013, and an 82.1% increase from 132,700 square meters sold in the fourth quarter of 2012. oSelling, General, and Administrative ("SG&A") expenses as a percent of total revenue totaled 12.2% compared to 9.6% in the third quarter of 2013 and 5.4% in the fourth quarter of 2012. oNet income was US$26.0 million, a 9.4% decrease from US$28.7 million in the third quarter of 2013 and a 22.6% decrease from US$33.6 million reported in the fourth quarter of 2012. oDiluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.29, compared to diluted net earnings per ADS of US$0.39 in the third quarter of 2013 and US$0.47 per ADS in the fourth quarter of 2012. oCash and cash equivalents, including restricted cash, increased by US$52.7 million to US$848.7 million as of December 31, 2013 from US$796.0 million as of September 30, 2013. Short and long term debt increased by US$295.4 million from US$515.6 million as of September 30, 2013 to US$811.0 million as of December 31, 2013. oBook value was US$11.93 per ADS, as of December 31, 2013, a 3.3% increase over the prior quarter. oThe Board of Directors of the Company has approved the payment of a quarterly dividend of US$0.05 per ADS payable on March 20, 2014 to shareholders of record as of March 7, 2014. oThe Company acquired five land parcels (for a total of three development projects) in Xingyang, Jinan and Kunshan respectively, with total GFA of 829,768 square meters. Mr. Yong Zhang, Xinyuan's Chairman said, "We experienced a strong fourth quarter beating the mid-points of our quarterly revenue, contract sales and net income guidance. The general state of the real estate environment remained healthy in the fourth quarter and we experienced excellent project sales results in each of our operating cities. We commenced pre-sales at two projects in the fourth quarter-- Xuzhou Colorful City and our newly acquired Kunshan Royal Palace project, which has already sold out over 90% of the apartment units we have made available thus far. Additionally, our 3 most active projects -- Zhengzhou XIN City, Jinan Xinyuan Splendid and Suzhou XIN City -- each performed very well experiencing sequential improvements average selling prices and solid GFA sales levels." "The balance of our real estate property under development at the end of the fourth quarter increased significantly to US$919.8 million compared to US$534.7 million at the end of the last quarter. This balance reflects nine active development projects with another five projects that are expected to commence pre-sales during the course of 2014. As of today's reporting date, our total sellable GFA was approximately 2.24 million square meters for active projects and under planning stage projects, a record for Xinyuan." "For Xinyuan's long-term success, it's imperative that we expand more aggressively to become a larger player in the market. China's real estate industry is changing and property development companies need to get bigger to benefit from acquiring land at public auction at reasonable prices, attain greater price negotiating leverage and capitalize on compelling M&A opportunities. Additionally, financing costs are typically lower for large scale developers, whom we quantify as having annual contract sales that exceed RMB10 billion. 2014 is a building year for our company as we invest in resources for our future development and growth. As we expand our project pre-sales activity more aggressively in 2014 than in years past, higher operating expenses are expected to impact our year-over-year profit growth during the course of 2014. However, beyond this period, as our marketing expenses moderate and our development projects mature, we believe we will achieve higher net margin and overall profit growth on a percentage basis that is consistent with our future top line growth projections." "Finally, we are pleased with the continuation of our dividend program, announcing our fourth quarter dividend. We remain committed to this program as we progress through 2014," concluded Mr. Zhang. Financial Results for the Fourth Quarter 2013 Contract Sales Contract sales totaled US$377.5 million in the fourth quarter compared to US$243.7 million in the third quarter of 2013 and US$188.4 million in the fourth quarter of 2012. The Company's GFA sales were 241,700 square meters in the fourth quarter of 2013 versus 151,900 square meters in the third quarter of 2013 and 132,700 square meters in the fourth quarter of 2012. The average selling price ("ASP") per square meter sold was RMB9,678 (US$1,562)in the fourth quarter of 2013 versus RMB9,976 (US$1,604) in the third quarter of 2013 and RMB8,964 (US$1,420) in the fourth quarter of 2012. The sequential ASP decrease was due to product mix, and the Company did not decrease the price of any category of product in any of its projects. Two new projects became available for sale in the fourth quarter of 2013, namely Kunshan Royal Palace with sellable GFA of 288,400 square meters and Xuzhou Colorful City with sellable GFA of 129,300 square meters. Sales were healthy for both projects and they contributed approximately 30.5% of XIN's GFA sales in the quarter. Breakdown of GFA Sales and ASP's by Project Q4 2012 Q3 2013 Q4 2013 Unsold GFA ASP GFA ASP GFA ASP GFA Project (m^2 (Rmb) (m^2 (Rmb) (m^2 (Rmb) (m^2 000) 000) 000) 000) ZhengzhouRoyalPalace 15.5 8,948 12.9 10,767 1.2 23,351 0.9 ZhengzhouCenturyEastA 12.5 8,841 13.7 10,708 1.9 13,319 2.6 ZhengzhouCenturyEastB 18.5 8,506 7.9 14,058 2.3 16,831 0.9 ZhengzhouXinCity - - 31.6 9,587 53.7 9,972 99.7 KunshanIntlCityGarden 22.2 8,251 4.5 11,419 8.8 11,209 3.5 KunshanRoyalPalace - - - - 42.5 9,265 245.9 SuzhouXinCity - - 29.3 8,160 52.6 8,577 44.9 JinanXinyuanSplendid 45.4 8,927 48.5 10,021 45.7 10,372 114.0 XuzhouColorfulCity - - - - 31.3 8,820 98.0 Others 18.6 - 3.5 - 1.7 - 4.2 Total 132.7 8,964 151.9 9,976 241.7 9,678 614.6 Revenue In the fourth quarter of 2013, the Company's total revenue was US$289.2 million compared to US$240.7 million in the third quarter of 2013 and US$263.1 million in the fourth quarter of 2012. Gross Profit Gross profit for the fourth quarter of 2013 was US$82.6 million, or 28.6% of revenue, compared to a gross profit of US$78.5 million, or 32.6% of revenue, in the third quarter of 2013 and a gross profit of US$87.8 million, or 33.4% of revenue, in the fourth quarter of 2012. The decrease in gross margin was due to an increase in the target cost of two existing projects caused by a product upgrade, and another newly acquired project, caused by the fair value adjustment as of the acquisition date. Selling, General and Administrative Expenses SG&A expenses were US$35.1 million for the fourth quarter of 2013 compared to US$23.0 million for the third quarter of 2013 and US$14.1 million for the fourth quarter of 2012. As a percentage of total revenue, SG&A expenses were 12.2% compared to 9.6% in the third quarter of 2013 and 5.4% in the fourth quarter of 2012. The increase of SG&A expenses as a percentage of revenue compared to previous quarters was mainly due to an increase in personnel related to the rapid expansion of Xinyuan's development projects, year-end annual bonus payments and higher promotional spending levels on the Company's two new projects launched in the fourth quarter. Net Income Net income for the fourth quarter of 2013 was US$26.0 million compared to US$28.7 million for the third quarter of 2013 and US$33.6 million for the same period in 2012. Net margin was 9.0%, compared to 11.9% in the third quarter of 2013 and 12.8% in the fourth quarter of 2012. Diluted earnings per ADS were US$0.29, compared to US$0.39 per ADS in the third quarter of 2013 and to US$0.47 per ADS in the same period in 2012. Financial Results for the Full Year 2013 For the year ended December 31, 2013, contract sales increased by 19.7% to US$1,000.2 million from US$835.9 million in 2012. GFA sales increased by 8.7% to 665,600 square meters from 612,400 square meters in 2012. Total revenues decreased by 1.9% to US$897.7 million from US$914.8 million in 2012 due to a higher percentage of completion of more mature development projects in their near completion stage resulting in higher revenue in 2012, as well as from lower percentage of completion from two of the Company's major development projects -- Suzhou XIN City and Xuzhou Colorful City, each of which launched in the third and fourth quarters of 2013, respectively. Gross profit was US$286.7 million, or 31.9% of revenue in 2013 compared to a gross profit of US$280.0 million, or 30.6% of revenue in 2012. SG&A expenses were US$85.3 million, or 9.5% of revenue, compared to US$56.8 million, or 6.2% of revenue in 2012. Net income was US$120.7 million in 2013 compared to US$157.0 million in 2012. Diluted earnings per ADS were US$1.63 in 2013 compared to US$2.17 per ADS in 2012. Balance Sheet As of December 31, 2013, the Company reported US$848.7 million in cash and cash equivalents (including restricted cash) compared to US$796.0 million as of September 30, 2013. Total debt outstanding was US$811.0 million, an increase of US$295.4 million compared to US$515.6 million at the end of the third quarter of 2013. This increase was largely due to new financings totaling $379.7 million offset by the repayment of an $89.7 million bank loan in the fourth quarter. The balance of the Company's real estate property under development at the end of the fourth quarter was US$919.8 million compared to US$534.7 million at the end of the third quarter of 2013. This significant increase was due to the purchase of land parcels, and the capitalization of construction costs incurred for existing projects in the fourth quarter. Project Status Below is a summary table of projects that were active and available for sale in the fourth quarter of 2013. GFA Contract Sales (m^2 000) (US$ millions) Project Total Total Project Sold to Sales to Cost % Active Active date %Sold date Complete Projects Projects Zhengzhou Royal Palace 132.4 131.5 237.5 233.9 98.5% 89.0% Zhengzhou Century East A 77.3 74.7 125.6 120.3 95.8% 95.0% Zhengzhou Century East B 166.5 165.6 244.0 242.5 99.4% 97.2% Zhengzhou Xin City 185.0 85.3 324.6 135.4 41.7% 59.0% Kunshan Intl City Garden 497.9 494.4 605.3 598.9 98.9% 100.0% Kunshan Royal Palace 288.4 42.5 504.5 63.6 12.6% 35.9% Suzhou Xin City 126.8 81.9 178.7 111.5 62.4% 63.6% Jinan Xinyuan Splendid 565.2 451.2 784.3 623.6 79.5% 83.6% Xuzhou Colorful City 129.3 31.3 196.0 44.6 22.8% 40.4% Others remaining GFA 4.2 Total active projects 2,173.0 1,558.4 3,200.5 2,174.3 67.9% 77.0% As of today's reporting date, the Company's total sellable GFA was approximately 2,238,600 square meters for active projects and under planning stage projects. Below is a summary of all of the Company's planning stage projects: Unsold GFA Pre sales (m^2000) Scheduled Beijing Xindo Park 117.7 Q1 2014 Zhengzhou Xindo Park 293.4 Q2 2014 Suzhou Lake Royal Palace 171.9 Q2 2014 Xingyang Splendid (Newly Acquired Xingyang Land) 240.2 Q2 2014 Williamsburg Brooklyn Project 37.1 Q2 2014 Jinan Royal Palace (Newly Acquired Jinan Land) 420.5 Q3 2014 Newly Acquired Chengdu Land 225.0 Q4 2014 Newly Acquired Sanya Land 118.2 Q1 2015 Total projects under planning 1,624.0 Total active projects 614.6 Total all Xinyuan projects 2,238.6 First Quarter and Full Year 2014 Outlook The Company expects first quarter contract sales to reach approximately US$225 to US$230 million. First quarter revenue is expected to total US$195 to US$200 million while net income is projected at US$9 to US$11 million. For the full year, the Company expects contract sales to reach approximately US$1,640 million. Full year revenue is expected to total US$1,230 to US$1,280 million while full year net income is projected at US$120 to US$125 million. Conference Call Information Xinyuan's management will host an earnings conference call at 8:00 am ET on February 28, 2014 to discuss fourth quarter 2013 results. Listeners may access the call by dialing 1-913-312-0637. A webcast will also be available through the Company's investor relations website at http://www.xyre.com. A replay of the call will be available through March 7, 2014 by dialing 1-858-384-5517, access code: 6583895. 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. In China, Xinyuan primarily focuses its development projects in Tier II cities, including Hefei, Jinan, Kunshan, Suzhou, Zhengzhou, Xuzhou and Chengdu. The Company's U.S. development arm, XIN Development Group International, Inc. ("XDGI") is a pioneer amongst Chinese real estate residential developers, entering the US market 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. 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 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 China and, to the extent we expand operations into other countries, such as the U.S., the laws, regulations and policies of such countries; 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 China, particularly Tier II and Tier III cities, and in our targeted areas in the U.S.; fluctuations in general economic and business conditions in China, and, to the extent we expand operation into other countries, such as the U.S., the general economic and business conditions in such countries; 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, 2012. 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: Ms. Helen Zhang Interim Chief Financial Officer Tel: +86 (10) 8588-9398 Email: firstname.lastname@example.org ICR, LLC In U.S.: +1-646-308-1472 In China: +86 (10) 6583-7511 Email: William.email@example.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 December31, September30, December31, 2013 2013 2012 (unaudited) (unaudited) (unaudited) Total revenue 289,160 240,665 263,094 Total cost of revenue (206,571) (162,152) (175,261) Gross profit 82,589 78,513 87,833 Selling and distribution expenses (9,492) (5,633) (4,425) General and administrative expenses (25,650) (17,397) (9,695) Operating income 47,447 55,483 73,713 Interest income 3,084 4,085 2,941 Interest expense (6,411) (5,608) - Other income 1,539 - - Share of loss in an equity investee (117) - - Income from operations before income taxes 45,542 53,960 76,654 Income taxes (19,556) (25,212) (43,084) Net income 25,986 28,748 33,570 NetincomeattributabletoXinyuanRealEstateCo., 25,986 28,748 33,570 Ltd. shareholders Earnings per ADS: Basic 0.33 0.40 0.47 Diluted 0.29 0.39 0.47 ADS used in computation: Basic 77,616 71,360 70,969 Diluted 91,097 73,480 71,747 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) Twelve months ended December 31, December 31, 2013 2012 (unaudited) (audited) Revenue 897,738 914,799 Cost of revenue (611,083) (634,763) Gross profit 286,655 280,036 Selling expenses (20,773) (17,942) General and administrative expenses (64,498) (38,829) Operating income 201,384 223,265 Interest income 11,681 9,019 Interest expense (16,863) - Other income 1,539 - Share of loss in an equity investee (117) - Income from operations before income taxes 197,624 232,284 Income taxes (76,913) (74,175) Net income 120,711 158,109 Less: net income attributable to non-controlling - 1,110 interest Net income attributable to shareholders 120,711 156,999 Earnings per ADS: Basic 1.66 2.18 Diluted 1.63 2.17 ADS used in computation: Basic 72,867 72,129 Diluted 74,732 72,366 XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (All US$ amounts and number of shares data in thousands) December31, September30, December31, 2013 2013 2012 (unaudited) (unaudited) (audited) ASSETS Current assets Cash and cash equivalents 587,119 562,019 496,205 Restricted cash 261,612 233,951 145,730 Accounts receivable 8,528 17,297 3,076 Other receivables 10,595 16,619 27,413 Other deposits and prepayments 402,310 404,389 105,427 Advances to suppliers 15,317 25,041 11,028 Real estate property held for sale 5,524 5,394 11,191 Realestatepropertydevelopmentcompleted 23,161 34,214 3,158 Real estate property under development 919,846 534,688 722,819 Other current assets 59 198 295 Due from related parties 820 - - Total current assets 2,234,891 1,833,810 1,526,342 Real estate properties held for lease, net 58,717 53,443 23,204 Property and equipment, net 46,706 45,560 1,576 Restricted deposit - 11,418 11,169 Other long-term investment 251 249 242 Interests in an equity investee 5,945 - - Deferred tax asset 8,547 1,404 1,599 Deferred charges 9,049 4,878 - Other assets 3,760 2,260 2,249 TOTAL ASSETS 2,367,866 1,953,022 1,566,381 XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (All US$ amounts and number of shares data in thousands) December 31, September30, December31, 2013 2013 2012 (unaudited) (unaudited) (audited) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable 193,046 184,763 241,894 Short-term bank loans and other 23,291 80,223 113,066 debt Customer deposits 75,285 92,578 50,201 Income tax payable 121,642 77,502 75,877 Deferred tax liabilities 70,458 40,857 13,612 Other payables and accrued 74,804 68,100 64,721 liabilities Payroll and welfare payable 19,638 7,872 9,663 Current portion of long-term bank 217,964 100,846 166,082 loans and other debt Current maturities of capital lease 2,746 2,723 - obligations Total current liabilities 798,874 655,464 735,116 Non- current liabilities Long-term bank loans 32,804 58,796 35,000 Other long term debt 536,943 275,761 - Deferred tax liabilities 9,385 8,253 5,885 Unrecognized tax benefits 16,314 9,105 8,842 Capital lease obligations, net of 26,646 28,619 - currentmaturities TOTAL LIABILITIES 1,420,966 1,035,998 784,843 Shareholders' equity Common shares 16 15 15 Treasury shares (3,085) (3,086) (13,667) Additional paid-in capital 534,937 533,647 511,964 Statutory reserves 68,547 49,622 49,622 Retained earnings 346,485 336,826 233,604 TOTAL EQUITY 946, 900 917,024 781,538 TOTAL LIABILITIES AND 2,367,866 1,953,022 1,566,381 SHAREHOLDERS' EQUITY SOURCE Xinyuan Real Estate Co., Ltd. Website: http://www.xyre.com
Xinyuan Real Estate Co., Ltd. Announces Fourth Quarter and Full Year 2013 Financial Results
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