SHENZHEN, China, April 29, 2019 /PRNewswire/ -- Nam Tai Property Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTP) today announced its unaudited results for the first quarter ended March 31, 2019.
KEY HIGHLIGHTS
(In thousands of US dollars, except per share data, percentages and as otherwise stated)
Quarterly Results |
|||||||||||||
Q1 2019 |
Q1 2018 |
YoY(%)(a) |
|||||||||||
Operation income |
$ |
581 |
$ |
— |
— |
||||||||
Net operation income |
$ |
345 |
$ |
— |
|||||||||
Operating loss |
$ |
(3,264) |
$ |
(9,116) |
— |
||||||||
% of operation income |
(561.8) |
% |
— |
||||||||||
per share (diluted) |
$ |
(0.09) |
$ |
(0.24) |
— |
||||||||
Net (loss) income |
$ |
(1,791) |
$ |
2,568 |
— |
||||||||
% of operation income |
(308.3) |
% |
— |
||||||||||
Basic (loss) income per share |
$ |
(0.05) |
$ |
0.07 |
— |
||||||||
Diluted (loss) income per share |
$ |
(0.05) |
$ |
0.07 |
— |
||||||||
Weighted average number of shares ('000) |
|||||||||||||
Basic |
38,192 |
37,669 |
|||||||||||
Diluted |
38,192 |
38,527 |
|||||||||||
____________________ |
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Notes: |
|||||||||||||
(a) Percentage change is not applicable if either of the two periods contains a loss. |
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(b) This information presented here has been published on the Company's website |
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Financial Position |
||||||||||||
As of March 31, |
As of December 31, |
As of March 31, |
||||||||||
2019 |
2018 |
2018 |
||||||||||
Cash and cash equivalents(a) |
$ |
85,365 |
$ |
62,919 |
$ |
169,892 |
||||||
Short term investments(b) |
$ |
12,273 |
$ |
46,952 |
$ |
3,344 |
||||||
Real estate properties under development, net |
$ |
186,457 |
$ |
171,610 |
$ |
56,193 |
||||||
Property, plant and equipment, net |
$ |
27,554 |
$ |
27,442 |
$ |
34,940 |
||||||
Total assets |
$ |
322,150 |
$ |
318,107 |
$ |
272,264 |
||||||
Accounts payable |
$ |
88,551 |
$ |
87,214 |
$ |
3,189 |
||||||
Deposits received |
$ |
460 |
$ |
— |
$ |
— |
||||||
Total shareholders' equity |
$ |
229,864 |
$ |
227,891 |
$ |
255,931 |
||||||
Total number of common shares issued |
38,193 |
38,187 |
37,776 |
|||||||||
____________________ |
||||||||||||
Notes: |
||||||||||||
(a) Cash and cash equivalents includes all cash balances and certificates of deposit having a maturity date of three months or less upon acquisition. |
||||||||||||
(b) Short term investments include all highly liquid investments with original maturities of greater than three months and less than 12 months. Investments that are expected to be realized in cash during the next 12 months are also included in short term investments. |
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Financial Ratio |
||||||||||||
As of March 31, |
As of December 31, |
As of March 31, |
||||||||||
2019 |
2018 |
2018 |
||||||||||
Ratio of cash(a) to current liabilities |
1.06 |
1.22 |
10.61 |
|||||||||
Current ratio(b) |
1.15 |
1.29 |
10.94 |
|||||||||
Ratio of total assets to total liabilities |
3.49 |
3.53 |
16.67 |
|||||||||
Return on equity |
(3.1) |
% |
(5.6) |
% |
4.1 |
% |
||||||
Ratio of total liabilities to total equity |
0.40 |
0.40 |
0.06 |
|||||||||
____________________ |
||||||||||||
Notes: |
||||||||||||
(a) Cash in this financial ratio include cash, cash equivalents and short term investments. |
||||||||||||
(b) Current ratio means all current assets, including prepaid expenses and other receivables, divided by all current liabilities. |
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FINANCIAL RESULTS
Net Operation Income
Net operation income for the first quarter of 2019 was $0.3 million compared to nil in the first quarter of 2018. Operation income for the first quarter of 2019 mainly consisted of rental income of $0.5 million from the existing factory buildings located on the site of Phase II of Nam Tai Inno City and Wuxi.
Operating Loss
Operating loss for the first quarter of 2019 was $3.3 million compared to an operating loss of $9.1 million in the first quarter of 2018. Operating loss for the first quarter of 2019 mainly consisted of general and administrative expenses of 2.9 million and selling and marketing expenses of $0.7 million; offset in part by our net operation income of $0.3 million for the period. Operating loss for the first quarter of 2018 mainly consisted of general and administrative expenses of $9.1 million that mainly included accrual of compensation for loss of office of $3.7 million for the retirement of a senior officer, stock option compensation expenses of $1.4 million for certain officers and employees, salary and benefits of $1.8 million, depreciation of $1.0 million and audit, legal and professional fees of $0.6 million.
Net (Loss) Income
Net loss for the first quarter of 2019 was $1.8 million compared to net income of $2.6 million in the first quarter of 2018. Net loss for the first quarter of 2019 mainly consisted of operating loss of $3.3 million, offset in part by interest income of $0.8 million earned from time deposits and exchange gain of $0.6 million as a result of the appreciation of Renminbi against the US dollar in the first quarter of 2019. Net income for the first quarter of 2018 mainly consisted of a gain of $6.8 million on disposal of an office property in Hong Kong, exchange gain of $3.3 million as a result of the appreciation of Renminbi against the US dollar in the first quarter of 2018 and interest income of $1.5 million earned from time deposits, offset in part by operating loss of $9.1 million.
Cash, Cash Equivalents and Short-term Investments
Cash, cash equivalents and short-term investments decreased by $12.3 million in the first quarter of 2019 from $109.9 million as of December 31, 2018 to $97.6 million as of March 31, 2019. This decrease was mainly due to $11.9 million spent for Nam Tai Inno Park and Nam Tai Inno City – Phase I in the first quarter of 2019.
Real Estate Properties under Development, Net
Real estate properties under development increased by $14.9 million in the first quarter of 2019 from $171.6 million as of December 31, 2018 to $186.5 million as of March 31, 2019. This increase mainly consisted of $11.6 million for construction completed for both Nam Tai Inno Park and Nam Tai Inno City – Phase I, capitalized under percentage-of-completion method (before foreign currency translation adjustment).
Accounts Payable
Accounts payable increased by $1.4 million in the first quarter of 2019 from $87.2 million as of December 31, 2018 to $88.6 million as of March 31, 2019. This increase mainly consisted of accrued payable for construction completed for both Nam Tai Inno Park and Nam Tai Inno City – Phase I, accounted for under percentage-of-completion method.
Liquidity and Capital Resources
As of March 31, 2019, we had a total cash balance of $85.4 million and we have no material debt. According to our project development plan, project investment for the second quarter of 2019 is estimated to be $27.5 million. The total project investment for the year 2019 is estimated to be $167.0 million. We plan to seek additional borrowing facilities or alternative funding sources in 2019 for our various development projects.
Please see page 6 of the Company's Condensed Consolidated Statements of Comprehensive Income for further details. The information contained herein has also been published on the Company's website at http://www.namtai.com/investors#investors/quarterly_earnings in the quarterly earnings report of the first quarter of 2019 on page 6, Condensed Consolidated Statements of Comprehensive Income.
RECENT DEVELOPMENTS
The development of Nam Tai Inno Park in Guangming, Shenzhen, and Nam Tai Inno City in Gushu, Shenzhen, continues to proceed smoothly.
For Nam Tai Inno Park, our construction continued smoothly in the first quarter of 2019. After the opening of our industrial showroom at the end of December 2018, we held a number of industrial conferences including an Internet-of-Things industry conference on December 22, 2018, a discussion forum to commemorate the 20th anniversary of the Guangdong High-Tech Industry Chamber on March 15, 2019 and an academic & expert discussion forum on the development of Nam Tai Inno Park on March 20, 2019, as well as several technology park community building events. Our industrial showroom and the various forums and events it hosted were designed to attract potential tenants and promote our brand as an operator of technology parks. As a result of these conferences and events, we have established a number of contacts with potential tenants as well as the receipt of deposits for future leases for 156 dormitory units from potential tenants.
For Phase I of Nam Tai Inno City, we have obtained the early construction permit for the pile foundation in November 2018 and began pile driving and foundation laying in the first quarter of 2019. We aim to complete the foundation building process before the receipt of our construction permit for the main structure, which is expected to be obtained in the second half of 2019. We also plan to pay $49.8 million for additional land premium by mid 2019. Payment of the additional land premium is required by the land use right contract re-executed on October 25, 2018 between us and the urban planning, land and resources commission of Shenzhen municipality. Our payment of additional land premiums may be offset in part by the increased cost basis of our developed project when calculating land appreciation tax on sales of the subdivided units.
For Phase II of Nam Tai Inno City, as of March 31, 2019, we had leased out approximately 90% of the spaces in existing buildings to Medium-small or early stage companies. In line with our plan to maintain active operation of the facilities ahead of their redevelopment, we held several industrial events including an intellectual property law forum on March 17, 2019, where several policy makers and industry speakers discussed local policies and subsidies regarding the promotion of technology companies with valuable intellectual properties. We will continue to strengthen our brand as a technology park operator by providing our corporate tenants and Shenzhen's technology community with these value-added services.
As for our Wuxi facility, we rented and delivered the facilities to a third party for further renovation and development in February 2019.
OPERATING RESULTS |
|||
As of March 31, |
|||
2019 |
|||
(in square meter) |
|||
Project under development |
331,832 |
||
Project for Future Development |
364,795 |
||
Total |
696,627 |
||
Project Portfolio - As of March 31, 2019 |
|||||||||
Projects |
Inno Park |
Inno City – Phase I |
Inno City – Phase II |
||||||
Location |
Shenzhen |
Shenzhen |
Shenzhen |
||||||
Type(a) |
Office and Dormitory |
Office and Dormitory |
Office and Dormitory |
||||||
Site Area (sq.m.) |
103,739 |
22,364 |
22,367 |
||||||
Total GFA (sq.m.) |
331,832 |
194,595 |
170,200(b) |
||||||
Total |
Under Development (sq.m.) |
331,832 |
— |
— |
|||||
Under Operation (sq. m.) |
— |
— |
— |
||||||
Future Development (sq. m.) |
— |
194,595 |
170,200 |
||||||
Interest attributable to us |
100% |
100% |
100% |
||||||
Address |
Fenghuang Community, |
Namtai Road, Baoan District, Shenzhen |
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Notes: |
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(a) The types of our projects are based on our planning or certificates issued by the relevant authority and may be changed subject to the |
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(b) The gross floor area and type are based on the assumption that we will receive M-0 zoning approval for the entire Phase II site prior to |
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(c) The above figures are subject to adjustment upon the final approval of the relevant authorities in China. |
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Properties under Development
The table below sets forth certain information of our property projects or project phases under development as of March 31, 2019, comprising properties for which the land use right certificate and construction permits have been obtained, construction is in progress but before construction acceptance certificates have be obtained.
Project |
Inno Park |
|||
City |
Shenzhen |
|||
(Estimated) Total GFA |
(sq. m.) |
331,832 |
||
Leasable GFA or Estimated Total Leasable GFA |
(sq. m.) |
265,000 |
||
Commencement Time |
May 2017 |
|||
Status of Pre-sale permit |
Not eligible |
|||
Estimated Completion Time |
2020 Q4 |
|||
Interest Attributable to us |
100% |
Properties for Future Development
The table below sets forth certain information of our property projects held for future development as of March 31, 2019, comprising properties for which we have obtained the land use right certificate or we have entered into land grant contracts although the land use right certificate is not yet obtained, or the relevant lands and resources authority has confirmed our successful bidding in a public auction.
Project |
Inno City – Phase I |
Inno City – Phase II |
||||
Location |
Shenzhen |
Shenzhen |
||||
Estimated Total GFA(1) |
(sq. m.) |
194,595 |
170,200 |
|||
Estimated Completion Time |
2021 |
2025 |
||||
Note: |
||||||
(1) The estimated total GFA is based on our future planning and is subject to the relevant authority's final approval. |
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Potential Risks in Our Business
There are no material changes to the risk factors previously disclosed in our Annual Report on Form 20-F and in our Current Reports filed on Form 6-K from time to time.
The information contained in, or that can be accessed through, the website mentioned in this announcement does not form part of the announcement.
FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE TO DECLINE Certain statements included in this announcement, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "might", "can", "could", "will", "would", "anticipate", "believe", "continue", "estimate", "expect", "forecast", "intend", "plan", "seek", or "timetable". These forward-looking statements, which are subject to risks, uncertainties, and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business and the industry in which we operate. These statements are only predictions based on our current expectations about future events. There are several factors, many beyond our control, which could cause results to differ materially from our expectation. These risk factors are described in our Annual Report on Form 20-F and in our Current Reports filed on Form 6-K from time to time and are incorporated herein by reference. Any of these factors could, by itself, or together with one or more other factors, adversely affect our business, results of operations or financial condition. There may also be other factors currently unknown to us, or have not been described by us, that could cause our results to differ from our expectations. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements apply only as of the date of this announcement; as such, they should not be unduly relied upon as circumstances change. Except as required by law, we are not obligated, and we undertake no obligation, to release publicly any revisions to these forward-looking statements that might reflect events or circumstance occurring after the date of this announcement or those that might reflect the occurrence of unanticipated events.
SCHEDULE FOR RELEASE OF QUARTERLY FINANCIAL RESULTS FOR 2019
To maintain the efficiency of delivering the Company's quarterly financial results to the market, the Company's management expects to release the quarterly financial results in accordance with the following schedule for 2019. Details of the expected quarterly release dates are as follows:
Announcements of Financial Results
Quarter |
Date of release |
|
Q1 2019 |
April 29, 2019 (Monday) |
|
Q2 2019 |
July 29, 2019 (Monday) |
|
Q3 2019 |
October 28, 2019 (Monday) |
|
Q4 2019 |
January 27, 2020 (Monday) |
ABOUT NAM TAI PROPERTY INC.
We are an owner, developer and operator of technology parks. We hold two parcels of land located in Guangming and Gushu, Shenzhen, China. We are converting these two parcels of land that formerly housed the manufacturing facilities of our prior businesses into high-tech research and development centers, Nam Tai Inno Park and Nam Tai Inno City. We expect our principal income in the future will be derived from rental income from these research and development centers. Nam Tai Property Inc. is a corporation registered in the British Virgin Islands and listed on the New York Stock Exchange (Symbol: "NTP"). Please refer to the Nam Tai website (www.namtai.com) or the SEC website (www.sec.gov) for Nam Tai press releases and financial statements.
NAM TAI PROPERTY INC. |
|||||||||
Three months ended March 31, |
|||||||||
2019 |
2018 |
||||||||
Operation income (1) |
$ |
581 |
$ |
— |
|||||
Operation expense |
(236) |
— |
|||||||
Net operation income |
345 |
— |
|||||||
Costs and expenses |
|||||||||
General and administrative expenses |
2,948 |
9,116 |
|||||||
Selling and marketing expenses |
661 |
— |
|||||||
3,609 |
9,116 |
||||||||
Operating loss |
(3,264) |
(9,116) |
|||||||
Other income, net (2) |
639 |
3,449 |
|||||||
Interest income |
834 |
1,507 |
|||||||
Gain on disposal of property |
— |
6,763 |
|||||||
Write off of demolished building |
— |
(35) |
|||||||
(Loss) income before income tax |
(1,791) |
2,568 |
|||||||
Consolidated (loss) income |
(1,791) |
2,568 |
|||||||
Functional currency translation adjustment |
3,601 |
6,038 |
|||||||
Other comprehensive income (3) |
3,601 |
6,038 |
|||||||
Consolidated comprehensive income |
1,810 |
8,606 |
|||||||
(Loss) Earnings per share |
|||||||||
Basic |
$ |
(0.05) |
$ |
0.07 |
|||||
Diluted |
$ |
(0.05) |
$ |
0.07 |
|||||
Weighted average number of shares ('000) |
|||||||||
Basic |
38,192 |
37,669 |
|||||||
Diluted |
38,192 |
38,527 |
|||||||
Notes: |
|||||||||
(1) The property at Phase II in Gushu has been rented to several tenants since July 2018. The property at Wuxi has been rented to a third party lessee with a term of 12 years ending in October 2030. |
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(2) Other income, net, includes an exchange gain of $0.6 million and $3.3 million for the three months ended March 31, 2019 and 2018 respectively. |
|||||||||
(3) Other comprehensive income is due to foreign exchange translation. |
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NAM TAI PROPERTY INC. |
||||||||
March 31, |
December 31, |
|||||||
2019 |
2018 |
|||||||
(Unaudited) |
(Audited) |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents(1) |
$ |
85,365 |
$ |
62,919 |
||||
Short term investments(1) |
12,273 |
46,952 |
||||||
Accounts receivable |
391 |
226 |
||||||
Prepaid expenses and other receivables |
7,770 |
6,663 |
||||||
Total current assets |
105,799 |
116,760 |
||||||
Long term investments |
2,247 |
2,204 |
||||||
Real estate properties under development, net(2) |
186,457 |
171,610 |
||||||
Property, plant and equipment, net |
27,554 |
27,442 |
||||||
Other assets |
93 |
91 |
||||||
Total assets |
$ |
322,150 |
$ |
318,107 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
88,551 |
$ |
87,214 |
||||
Accrued expenses and other payables |
2,781 |
2,993 |
||||||
Deposits received |
460 |
— |
||||||
Total current liabilities |
91,792 |
90,207 |
||||||
Long term rental deposits |
486 |
— |
||||||
Financial lease payable |
8 |
9 |
||||||
Total liabilities |
92,286 |
90,216 |
||||||
EQUITY |
||||||||
Shareholders' equity: |
||||||||
Common shares |
382 |
382 |
||||||
Additional paid-in capital |
257,288 |
257,125 |
||||||
Accumulated losses |
(15,120) |
(13,329) |
||||||
Accumulated other comprehensive loss(3) |
(12,686) |
(16,287) |
||||||
Total shareholders' equity |
229,864 |
227,891 |
||||||
Total liabilities and shareholders' equity |
$ |
322,150 |
$ |
318,107 |
||||
Notes: |
||||||||
(1) According to the definition of "Balance Sheet" under the Financial Accounting Standard Board ("FASB") Accounting Standards |
||||||||
(2) Capitalization on project investment was $11.6 million for the first quarter of 2019, our accumulated project investment was |
||||||||
(3) Accumulated other comprehensive loss represented foreign currency translation adjustment. |
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NAM TAI PROPERTY INC. |
|||||||||
Three months ended March 31, |
|||||||||
2019 |
2018 |
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|||||||||
Consolidated net (loss) income |
$ |
(1,791) |
$ |
2,568 |
|||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|||||||||
Depreciation and amortization of property, plant and equipment |
430 |
1,015 |
|||||||
Gain on disposal of property, plant and equipment |
— |
(6,956) |
|||||||
Write off demolished building |
— |
35 |
|||||||
Share-based compensation expenses |
129 |
1,366 |
|||||||
Unrealized exchange gain |
(602) |
(3,124) |
|||||||
Changes in current assets and liabilities: |
|||||||||
Increase in account receivables |
(165) |
— |
|||||||
Increase in prepaid expenses and other receivables |
(1,107) |
(302) |
|||||||
Increase in accrued expenses and other payables |
248 |
3,585 |
|||||||
Increase in long term rental deposit |
486 |
— |
|||||||
Total adjustments |
(581) |
(4,381) |
|||||||
Net cash used in operating activities |
$ |
(2,372) |
$ |
(1,813) |
|||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|||||||||
Payment of real estate properties under development |
$ |
(11,916) |
$ |
(4,329) |
|||||
Purchase of property, plant & equipment |
(247) |
(501) |
|||||||
Decrease in deposits for real estate properties under development |
— |
19 |
|||||||
Increase in deposits for purchase of property, plant and equipment |
— |
(61) |
|||||||
Proceeds from disposal of property, plant and equipment |
— |
9,706 |
|||||||
Proceeds from disposal of demolished building |
— |
197 |
|||||||
Proceeds from disposal of other asset |
— |
50 |
|||||||
Decrease (increase) in short term investments |
34,679 |
(3,344) |
|||||||
Net cash provided by investing activities |
$ |
22,516 |
$ |
1,737 |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|||||||||
Cash dividends paid |
$ |
— |
$ |
(2,629) |
|||||
Proceeds from shares issued for option exercise |
34 |
1,384 |
|||||||
Net cash provided by (used in) financing activities |
$ |
34 |
$ |
(1,245) |
|||||
Net increase (decrease) in cash and cash equivalents |
$ |
20,178 |
$ |
(1,321) |
|||||
Cash and cash equivalents at beginning of period |
62,919 |
165,173 |
|||||||
Effect of exchange rate changes on cash and cash equivalents |
2,268 |
6,040 |
|||||||
Cash and cash equivalents at end of period |
$ |
85,365 |
$ |
169,892 |
|||||
NAM TAI PROPERTY INC. |
|||||||||
1. These financial statements, including the consolidated balance sheet as of December 31, 2018, which was derived from audited financial |
|||||||||
2. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation |
|||||||||
3. Accumulated other comprehensive loss represents foreign currency translation adjustments. The consolidated comprehensive income was |
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4. A summary of the operation income, other income, net, net (loss) income and long-lived assets by geographical areas is as follows: |
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Three months ended March 31, |
|||||||||
2019 |
2018 |
||||||||
OPERATION INCOME WITHIN: |
|||||||||
-PRC, excluding Hong Kong |
$ |
581 |
$ |
— |
|||||
OTHER INCOME, NET: |
|||||||||
- Gain on exchange difference |
$ |
602 |
$ |
3,254 |
|||||
- Others |
37 |
195 |
|||||||
Total other income, net |
$ |
639 |
$ |
3,449 |
|||||
NET (LOSS) INCOME FROM OPERATIONS WITHIN: |
|||||||||
- PRC, excluding Hong Kong |
$ |
(1,576) |
$ |
(1,881) |
|||||
- Hong Kong |
(215) |
4,449 |
|||||||
Total net (loss) income |
$ |
(1,791) |
$ |
2,568 |
|||||
March 31, 2019 |
December 31, 2018 |
|||||||
LONG-LIVED ASSETS WITHIN: |
||||||||
- Real estate properties under development in PRC, excluding |
$ |
186,457 |
$ |
171,610 |
||||
- Property, plant and equipment in PRC, excluding Hong Kong |
27,184 |
27,186 |
||||||
- Hong Kong |
370 |
256 |
||||||
Total long-lived assets |
$ |
214,011 |
$ |
199,052 |
||||
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