Xinyuan Real Estate Co., Ltd. Announces First Quarter 2019 Financial Results

BEIJING, May 23, 2019 /PRNewswire/ -- 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 in other countries, today announced its unaudited financial results for the first quarter ended March 31, 2019.

First Quarter 2019 Highlights

• Contract sales increased 26.0% to US$479.7 million from US$380.7 million in the first quarter of 2018 and decreased 33.7% from US$724.0 million in the fourth quarter of 2018.
• Total revenue increased 169.3% to US$468.9 million from US$174.1 million in the first quarter of 2018 and decreased 57.1% from US$1,092.2 million in the fourth quarter of 2018.
• Gross profit increased 238.5% to US$131.0 million, or 28.0% of total revenue, from US$38.7 million, or 22.2% of total revenue, in the first quarter of 2018 and decreased 58.8% from US$318.2 million, or 29.1% of total revenue, in the fourth quarter of 2018.
• Selling, General and Administrative ("SG&A") expenses as a percentage of total revenue decreased to 12.0% from 22.8% in the first quarter of 2018 and increased from 9.7% in the fourth quarter of 2018.
• Net income was US$18.2 million compared to net loss of US$12.7 million in the first quarter of 2018 and net income of US$104.1 million in the fourth quarter of 2018.
• Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.33 compared to diluted net loss of US$0.16 per ADS in the first quarter of 2018 and diluted net earnings of US$1.13 per ADS in the fourth quarter of 2018.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "We are pleased that Xinyuan has maintained strong growth despite the downward pressure on sales across the industry. Our contract sales in the first quarter of 2019 increased 26.0% from the first quarter of last year. In addition, we commenced pre-sales on one new project in China."

"The macro economic environment and restrictive government policies still pose certain challenges for our industry. However, Xinyuan's operating strategy and strong execution capabilities continue to drive our steady growth. We will remain focused on selecting quality tier-one and tier-two city projects and will supplement our core business with value-added services in a thoughtful way to solidify our leading market position. We maintain our commitment to controlling our financial leverage and maximizing Xinyuan's financial health. We are optimistic in the outlook for our industry and long-term growth. We are also pleased to offer another quarterly dividend payment to our shareholders," concluded Mr. Zhang.

First Quarter 2019 Financial Results

Contract Sales

Contract sales in China totaled US$478.9 million in the first quarter compared to US$375.5 million in the first quarter of 2018 and US$724.0 million in the fourth quarter of 2018.

The Company's GFA sales in China were 211,400 square meters in the first quarter of 2019 compared to 149,800 square meters in the first quarter of 2018 and 355,000 square meters in the fourth quarter of 2018.

The average selling price ("ASP") per square meter sold in China was RMB15,269 (US$2,264) in the first quarter of 2019 compared to RMB15,932 (US$2,506) in the first quarter of 2018 and RMB13,483 (US$2,039) in the fourth quarter of 2018. 

The Company commenced pre-sales of one new project in the first quarter of 2019, Zhengzhou International New City IV B10, which contributed 3.7% and 3.4% of total GFA sales and total contract sales, respectively.

Breakdown of GFA Sales and ASPs by Project in China

* The Company owns 16.66% equity interest in a joint venture, Suzhou Hengwan Real Estate Co., Ltd. which develops Suzhou Suhe Bay. The Company accounts for its investment under the equity method.

Revenue

In the first quarter of 2019, the Company's total revenue increased 169.3% to US$468.9 million from US$174.1 million in the first quarter of 2018 and decreased 57.1% from US$1,092.2 million in the fourth quarter of 2018.

Gross Profit

Gross profit for the first quarter of 2019 was US$131.0 million, or 27.9% of total revenue, compared to a gross profit of US$38.7 million, or 22.2% of total revenue, in the first quarter of 2018 and a gross profit of US$318.2 million, or 29.1% of total revenue, in the fourth quarter of 2018.

Selling, General and Administrative Expenses

SG&A expenses were US$56.1 million for the first quarter of 2019 compared to US$39.8 million for the first quarter of 2018 and US$105.6 million for the fourth quarter of 2018. As a percentage of total revenue, SG&A expenses were 12.0% compared to 22.8% in the first quarter of 2018 and 9.7% in the fourth quarter of 2018.

Net Income

Net income for the first quarter of 2019 was US$18.2 million compared to net loss of US$12.7 million for the first quarter of 2018 and net income of US$104.1 million for the fourth quarter of 2018. Net margin was 3.9% compared to negative 7.3% in the first quarter of 2018 and 9.5% in the fourth quarter of 2018. Diluted net earnings per ADS were US$0.33 compared to diluted net loss of US$0.16 per ADS in the first quarter of 2018 and diluted net earnings of US$1.13 per ADS in the fourth quarter of 2018. 

Balance Sheet

As of March 31, 2019, the Company's cash and cash equivalents (including restricted cash) decreased to US$1,127.2 million from US$1,186.0 million as of December 31, 2018.

Total debt outstanding was US$3,513.8 million, which reflected an increase of US$61.7 million compared to US$3,452.1 million at the end of the fourth quarter of 2018. The balance of the Company's real estate properties under development at the end of the first quarter of 2019 was US$4,002.0 million compared to US$4,068.7 million at the end of the fourth quarter of 2018.

Real Estate Project Status in China

Below is a summary table of projects that were active and available for sale in the first quarter of 2019.

* The Company owns 16.66% equity interest in a joint venture, Suzhou Hengwan Real Estate Co., Ltd. which develops Suzhou Suhe Bay. The Company accounts for its investment under the equity method.

As of March 31, 2019, the Company's total saleable GFA was approximately 5,511,200 square meters for active projects and under planning stage projects in China. Below is a summary of all of the Company's projects in China:

Update on Real Estate Projects in the United States

As of March 31, 2019, a total of 177 units out of 216 units were sold and closed at the Company's Oosten project in Brooklyn, New York City, with total revenue from this project reaching US$260.1 million. During the first quarter of 2019, revenues were US$0.8 million.

During the quarter, the Company completed pouring superstructure up to the 6th floor for the Hudson Garden project in the Hell's Kitchen area of Manhattan, New York City. During the past year, the design drawings were optimized, increasing the number of units from 82 to 92. Of the 38,000 square feet of retail/commercial space a total of 29,000 square feet were leased to the U.S. department store retailer Target with a 20-year lease. The offering plan was approved in the first quarter of 2019, and the launch of presales is expected to begin in the end of second quarter of 2019.

The Company continued to execute on the planning, governmental approvals, and pre-development activities of its ground-up project in Flushing, New York City. During the past year, the Landmark Preservation Committee approved the Company's landmark protection plan relating to a landmarked theater on site and awarded the Company a Certificate of Appropriateness. Landmark artifacts removal was completed at the end of February 2019, and the artifacts are currently stored in a warehouse for restoration work.

Real Estate Project Update in the United Kingdom

During the first quarter of 2019, the structural core of the Madison project was completed, and the structural frame is expected to be completed in the second quarter of 2019. Construction remains on track 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, 133 apartments have been sold.

Business Outlook

For the full year of 2019, the Company expects an increase in contract sales of about 10% and an increase in consolidated net income of 15% to 20% over 2018.

Conference Call Information

The Company will hold a conference call at 8:00am ET on May 23, 2019, to discuss its first quarter 2019 results. Listeners may access the call by dialing:

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 May 31, 2019, by dialing:

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, 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. 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.

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, 2018. 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 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
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

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