XI'AN, China, May 15, 2012 /PRNewswire-Asia-FirstCall/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended March 31, 2012.
Highlights for Q1 2012:
Mr. Pingji Lu, China Housing's Chairman, commented, "Despite the expected slowdown in real estate market, our financial results for the first quarter were stronger than expected in a seasonally slower quarter for China Housing. We adjusted our product supply at our Puhua projects in the first quarter making a larger number of lower cost units with lower average GFA available to drive sales. Our three active projects in the first quarter, JunJing III, Puhua Phase I and Puhua Phase II, continued to generate the majority of total revenue. Average selling prices at JunJing III were higher than our prior quarter resulting in gross profit margin above 30%. Our three active projects resulted in GFA sales of 14,994 square meters and average selling price of RMB 7,074. According to E-House (China) Real Estate Research Institute, total GFA sales in Xi'an were 1.8 million sq. meters from 2.5 million sq. meters in the fourth quarter 2011 and the average residential sale price in Xi'an was RMB 7,703 per square meter from RMB 7,903 in the fourth quarter 2011."
"We continue to monitor the property market environment in Xi'an and to adjust our product supply to meet consumer demand. We are currently focusing more of our marketing efforts on first time home buyers who are more consistent buyers during times of market uncertainly and a greater portion of our existing and upcoming development projects are geared toward this group."
"Our projects are progressing as planned and the consumer lending environment is improving. We have four new projects currently scheduled to commence pre-sales in 2012 along with two other projects scheduled for construction in 2013. Although we do not anticipate additional action by the government to reduce speculation in the local market for the remainder of this year, our growth outlook remains uncertain at this point in time. We are hopeful we'll see a gradual improvement in demand in Xi'an as the market environment stabilizes. As this happens, we expect to experience a corresponding level of revenue growth."
Total revenue in the first quarter of 2012 decreased 50.9% to $23.5 million from $47.9 million in the fourth quarter of 2011 and increased 4.2% from $22.6 million in the first quarter of 2011. In the first quarter of 2012, most of the Company's revenue came from its JunJing III, Puhua Phase I and Phase II projects. First quarter 2012 contract sales totaled US$20.1 million compared to $44.6 million in the fourth quarter of 2011 and $26.4 million from the first quarter of 2011. Total gross floor area ("GFA") sales were 17,090 sq. meters during the first quarter of 2012, compared to 44,631 sq. meters in the fourth quarter of 2011 and 28,438 sq. meters in the first quarter of 2011. The Company's ASP in the first quarter of 2012 increased to RMB 7,407 compared with RMB 6,301 in the fourth quarter of 2011, and RMB 6,115 in the first quarter of 2011. The increase in ASP was mainly due higher selling price at the Company's JunJing III project.
Gross profit for the three months ended March 31, 2012 was $7.0 million, representing an increase of 2.1% from $6.9 million in the fourth quarter of 2011 and a 22.8% increase from $5.7 million in the same period of 2011. Gross profit margin for the three months ended March 31, 2012 was 29.9%, which is above the 25.4% in the same period of 2011 and the 14.4% in the fourth quarter of 2011. The increase in gross profit margin was mainly due to increased ASP from JunJing III project.
SG&A expense was $3.0 million in the first quarter of 2012, compared to $3.4 million in the fourth quarter of 2011 and $3.4 million in the first quarter of 2011. SG&A expenses as a percentage of total revenue was 12.9%, compared to 7.0% in the fourth quarter of 2011 and 15.2% in the first quarter of 2011. The year-over-year percentage decrease was primarily due to the increase in revenue, and cost control in SG&A expense.
Operating income in the first quarter of 2012 increased to $3.4 million, or 14.5% of total revenue, from $2.2 million, or 4.5% of total revenue, in the fourth quarter of 2011, and increased from $1.3 million, or 5.8% of total revenue in the first quarter of 2011. The increase was mainly due to the increase in revenue and gross profit, as well as the decrease in SG&A expense.
Net income attributable to China Housing in the first quarter of 2012 was $2.2 million or $0.06 per basic share and $0.06 per diluted share. This performance compares to a net income of $2.5 million in the fourth quarter of 2011, and 2.8 million in the first quarter of 2011.
Sequential Quarterly Revenue Breakout Comparison
Project | Q1 2012 | Q4 2011 | ||||||||
Recognized Revenue | Contract Sales | GFA Sold | ASP | Unsold GFA | POC | Recognized Revenue | Contract Sales | GFA Sold | ASP | |
($) | ($) | (m2) | (RMB) | (m2) | ($) | ($) | (m2) | (RMB) | ||
Projects Under Construction | ||||||||||
Puhua Phase One | 4,778,151 | 1,245,345 | 1,394 | 5,628 | 18,891 | 91.0% | 13,736,692 | 6,128,808 | 5,248 | 7,358 |
Puhua Phase Two | 1,770,796 | 2,348,212 | 2,678 | 5,524 | 180,155 | 58.5% | 6,040,769 | 4,904,144 | 5,082 | 6,080 |
JunJing III | 10,629,103 | 13,242,856 | 10,922 | 7,638 | 7,410 | 77.5% | 24,408,721 | 32,921,226 | 33,913 | 6,117 |
Projects Completed | ||||||||||
JunJing II Phase One | 3,256,293 | 3,256,293 | 2,096 | 9,788 | 817 | 100% | - | - | - | - |
JunJing I | - | - | - | - | 100% | 683,643 | 683,643 | 388 | 11,100 | |
Additional Project | - | - | - | - | - | 100% | - | - | - | - |
Other Income | 3,067,428 | - | - | 3,025,519 | - | - | ||||
Total | 23,501,771 | 20,092,706 | 17,090 | 7,407 | 207,273 | - | 47,895,344 | 44,637,821 | 44,631 | 6,301 |
Q-o-Q Change | -50.9% | -55.0% | -61.7% | 17.6% | ||||||
Total debt outstanding as of March 31, 2012 was $204.3 million compared with $192.4 million on December 31, 2011. Net debt outstanding (total debt less cash) as of March 31, 2012 was $107.7 million compared with $64.0 million on December 31, 2011. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 45.0% on March 31, 2012 and 33.0% on December 31, 2011.
Q1 2012 | ||
Projects in Planning | Unsold GFA | First Pre-sales Scheduled |
(m2) | ||
Ankang Project | 243,152 | Q3 2012 |
Park Plaza | 141,822 | Q3 2012 |
Golden Bay | 252,540 | Q3 2012 |
Puhua Phase Three | 177,193 | Q3 2012 |
Puhua Phase Four | 216,611 | Q3 2013 |
Textile City | 630,000 | Q3 2013 |
Total projects in planning | 1,661,318 | |
2012 Outlook
Total recognized revenue for the 2012 second quarter is expected to reach $20 to $22 million, compared to $20.3 million in the same period of 2011. The Company is reporting contract sales estimates compared to revenue as they are not subject to percentage of completion alterations.
Conference Call Information
Management will host a conference call at 8:00 am ET on May 15th, 2012. Listeners may access the call by dialing #1-913-312-0953. To listen to the live webcast of the event, please go to http://www.viavid.net. Listeners may access the call replay, which will be available through May 22nd, 2012, by dialing #1-858-384-5517; passcode: 5181467.
About China Housing & Land Development, Inc.
Based in Xi'an, the capital city of China's Shaanxi province, China Housing & Land Development, Inc., is a leading developer of residential and commercial properties in northwest China. China Housing has been engaged in land acquisition, development, and management, including the sales of residential and commercial real estate properties through its wholly-owned subsidiary in China, since 1992.
China Housing & Land Development is the first Chinese real estate development company traded on NASDAQ. The Company's news releases, project information, photographs, and more are available on the internet at www.chldinc.com.
Safe Harbor
This news release may contain forward-looking information about China Housing & Land Development, Inc. which is covered under the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward- looking terminology such as believe, expect, may, will, should, project, plan, seek, intend, or anticipate or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and China Housing & Land Development's future performance, operations, and products.
Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Actual performance results may vary significantly from expectations and projections. Further information regarding this and other risk factors are contained in China Housing's public filings with the U.S. Securities and Exchange Commission.
All information provided in this news release and in any attachments is as of the date of the release, and the companies do not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
China Housing contacts
Mr. Cangsang Huang
Chief Financial Officer
Tel: +86-29-8258-2648 in Xi'an
Email: chuang@chldinc.com
Ms. Jing Lu
Chief Operating Officer, Board Secretary, and Investor Relations Officer
+86 29.8258.2639 in Xi'an
jinglu@chldinc.com / English and Chinese
Mr. Shuai Luo
Investor Relations
+86 29.8258.2632 in Xi'an
Laurentluo@chldinc.com / English and Chinese
Mr. Bill Zima, ICR
+86 10 6583 7511
William.Zima@icrinc.com
China Housing Investor Relations Department
+1 646. 308.1285
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES Interim Condensed Consolidated Balance Sheets As of March 31, 2012 (unaudited) and December 31, 2011
| ||||||||
March 31, | December 31, | |||||||
2012 | 2011 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 8,438,125 | $ | 22,014,953 | ||||
Cash - restricted | 88,253,258 | 105,720,400 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $571,530 and $571,857, respectively | 21,275,060 | 20,253,706 | ||||||
Other receivables, prepaid expenses and other assets, net | 1,968,295 | 1,483,758 | ||||||
Real estate held for development or sale | 172,117,818 | 163,482,316 | ||||||
Property and equipment, net | 32,663,300 | 33,018,990 | ||||||
Advance to suppliers | 682,932 | 889,965 | ||||||
Deposits on land use rights | 90,690,658 | 65,286,137 | ||||||
Intangible assets, net | 54,063,286 | 54,148,953 | ||||||
Goodwill | 1,893,699 | 1,894,782 | ||||||
Deferred tax asset | - | 308,248 | ||||||
Deferred financing costs | 214,572 | 253,569 | ||||||
Total assets | $ | 472,261,004 | $ | 468,755,777 | ||||
LIABILITIES | ||||||||
Accounts payable | $ | 35,389,393 | $ | 44,275,965 | ||||
Advances from customers | 54,156,966 | 57,541,251 | ||||||
Accrued expenses | 7,688,639 | 8,380,041 | ||||||
Income and other taxes payable | 16,350,514 | 14,386,133 | ||||||
Other payables | 7,871,437 | 7,474,035 | ||||||
Loans from employees | 14,878,920 | 14,887,431 | ||||||
Loans payable | 158,286,249 | 148,402,690 | ||||||
Deferred tax liability | 14,824,719 | 14,861,462 | ||||||
Warrants liability | 4,530 | 4,162 | ||||||
Fair value of embedded derivatives | 259,526 | 330,629 | ||||||
Convertible debt | 9,398,077 | 9,165,591 | ||||||
Mandatorily redeemable non-controlling interests in Subsidiaries | 21,803,665 | 19,935,482 | ||||||
Total liabilities | 340,912,635 | 339,644,872 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Common stock: $.001 par value, authorized 100,000,000 shares | ||||||||
issued 35,098,079 and 35,078,639, respectively | 35,098 | 35,079 | ||||||
Additional paid in capital | 49,084,245 | 48,961,658 | ||||||
Treasury stock at cost 351,480 and 337,800 shares, respectively | (434,240) | (420,098) | ||||||
Statutory reserves | 7,857,612 | 7,857,612 | ||||||
Retained earnings | 52,790,873 | 50,555,460 | ||||||
Accumulated other comprehensive income | 22,014,781 | 22,121,194 | ||||||
Total shareholders' equity | 131,348,369 | 129,110,905 | ||||||
Total liabilities and shareholders' equity | $ | 472,261,004 | $ | 468,755,777 | ||||
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES Interim Condensed Consolidated Statements of Income For The Three Months Ended March 31, 2012 and 2011 (Unaudited)
| ||||||||
March 31, 2012 | March 31, 2011 | |||||||
REVENUES | ||||||||
Real Estate sales | $ | 20,434,343 | $ | 19,656,817 | ||||
Other revenue | 3,067,428 | 2,900,879 | ||||||
Total revenues | 23,501,771 | 22,557,696 | ||||||
COST OF REVENUES | ||||||||
Cost of real estate sales | 14,232,864 | 14,638,574 | ||||||
Cost of other revenue | 2,239,870 | 2,196,569 | ||||||
Total cost of revenues | 16,472,734 | 16,835,143 | ||||||
Gross margin | 7,029,037 | 5,722,553 | ||||||
OPERATING EXPENSES | ||||||||
Selling, general, and administrative expenses | 3,023,685 | 3,432,716 | ||||||
Stock based compensation | 122,606 | - | ||||||
Other expenses | 6,433 | 41,577 | ||||||
Financing expense | 230,272 | 597,148 | ||||||
Accretion expense on convertible debt | 232,486 | 336,991 | ||||||
Total operating expenses | 3,615,483 | 4,408,432 | ||||||
NET INCOME FROM BUSINESS OPERATIONS | 3,413,555 | 1,314,121 | ||||||
CHANGE IN FAIR VALUE OF DERIVATIVES | ||||||||
Change in fair value of embedded derivatives | (71,103) | (1,052,754) | ||||||
Change in fair value of warrants | 368 | (850,651) | ||||||
Total change in fair value of derivatives | (70,735) | (1,903,405) | ||||||
Income before provision for income taxes | 3,484,290 | 3,217,526 | ||||||
Provision for income taxes | 969,485 | 786,489 | ||||||
Provision for (recovery of) deferred income taxes | 279,392 | (38,046) | ||||||
NET INCOME | $ | 2,235,413 | $ | 2,469,083 | ||||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||
Basic | 34,730,261 | 33,886,568 | ||||||
Diluted | 34,730,261 | 35,502,277 | ||||||
NET INCOME PER SHARE | ||||||||
Basic | 0.06 | 0.07 | ||||||
Diluted | 0.06 | 0.05 | ||||||