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Xinyuan Real Estate Co., Ltd. Announces Second Quarter 2020 Financial Results

2020-09-02 18:34 16824

BEIJING, Sept. 2, 2020 /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 the U.S., today announced its unaudited financial results for the second quarter ended June 30, 2020.

Second Quarter 2020 Highlights

  • Total revenue in the second quarter of 2020 increased 126.1% to US$284.4 million from US$125.8 million in the first quarter of 2020.
  • Net loss in the second quarter of 2020 decreased 23.0% to US$30.1 million from net loss of US$39.1 million in the first quarter of 2020.
  • Diluted net loss per ADS attributable to shareholders in the second quarter of 2020 decreased 33.3% to US$0.49 from diluted net loss of US$0.73 in the first quarter of 2020.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "Though the COVID-19 effect still last in Q2 2020, we further strengthened the marketing efforts, with total contract sales of the first half reaching around US$1.18 billion. With certain major projects launched in Q3, we are now holding a more optimistic view toward the full year sales result."

Mr. Zhang continued: "In this quarter, we also have further optimized debt structure and controlled capital expenditure. Our total debt decreased to US$3.0 billion as of June 30, 2020, US$0.6 billion lower year on year. Short term debt was US$1.2 billion, 41% of total debt. Compared with Q1, we have reduced our short-term debt by US$197 million, and total debt by US$32 million. In June and July 2020, we issued RMB160 million and RMB354.5 million of senior notes, respectively, which are now traded on the Singapore Exchange. In July 2020, our HK-listed property management subsidiary completed a follow-on offering, receiving about HK$127.2 million of net proceeds. These successful capital raises bring the additional resources needed to drive our growth strategy and to build a diverse and dynamic real estate ecosystem."

Second quarter 2020 Financial Results

Revenue

In the second quarter of 2020, the Company's total revenue decreased 53.3% to US$284.4 million from US$609.4 million in the second quarter of 2019 and increased 126.1% from US$125.8 million in the first quarter of 2020.

Gross Profit

Gross profit for the second quarter of 2020 was US$19.2 million, or 6.8% of total revenue, compared to gross profit of US$159.2 million, or 26.1% of total revenue, in the second quarter of 2019 and a gross profit of US$28.1 million, or 22.3% of total revenue, in the first quarter of 2020. Gross margin decreased dramatically from the previous quarters, this is mainly because we made a prudent adjustment. Considering the current market price affected by the epidemic, we reduced the expected selling price of several projects, the adjustment resulted in a significant reduction of gross margin. Without the adjustment, gross margin for this quarter would be 22.5%.

Selling, General and Administrative Expenses

SG&A expenses were US$51.4 million for the second quarter of 2020 compared to US$63.0 million for the second quarter of 2019 and US$44.0 million for the first quarter of 2020. As a percentage of total revenue, SG&A expenses were 18.1% compared to 10.3% in the second quarter of 2019 and 35.0% in the first quarter of 2020.

Net Income

Net loss for the second quarter of 2020 was US$30.1 million compared to net income of US$19.8 million for the second quarter of 2019 and net loss of US$39.1 million for the first quarter of 2020. Net margin was negative 10.6% compared to 3.3% in the second quarter of 2019 and negative 31.1% in the first quarter of 2020. Diluted net loss per ADS was US$0.49 compared to diluted net earnings of US$0.19 per ADS in the second quarter of 2019 and diluted net loss of US$0.73 per ADS in the first quarter of 2020.

Balance Sheet

As of June 30, 2020, the Company's cash and restricted cash increased to US$999.8 million from US$933.1 million as of March 31, 2020.

Total debt outstanding was US$3,008.0 million, which reflects a decrease of US$31.6 million from US$3,039.6 million at the end of the first quarter of 2020.

The balance of the Company's real estate properties under development at the end of the second quarter of 2020 was US$3,094.9 million compared to US$3,176.4 million at the end of the first quarter of 2020.

Real Estate Project Status in China

The Company commenced pre-sales of one new project in the second quarter of 2020, Suzhou Linhu Lake.

Below is a summary table of projects that were active and available for sale in the second quarter of 2020.

Project

GFA

(m2, 000s)

Total Active
Projects as of
June 30, 2020

Sold as of
June 30, 2020

Unsold as of
June 30, 2020

Xingyang Splendid II

118.5

98.1

20.4

Jinan Royal Palace

449.8

440.6

9.2

Xuzhou Colorful City

130.8

123.3

7.5

Sanya Yazhou Bay No.1

117.6

117.3

0.3

Xi'an Metropolitan

286.0

276.3

9.7

Jinan Xin Central

194.6

190.2

4.4

Henan Xin Central I

261.5

253.1

8.4

Zhengzhou Fancy City I

166.7

160.9

5.8

Tianjin Spring Royal Palace I

139.7

131.7

8.0

Zhengzhou International New City I

356.6

351.6

5.0

Xingyang Splendid III

120.9

119.0

1.9

Zhengzhou International New City II

176.0

170.4

5.6

Zhengzhou Fancy City II (North)

108.7

102.0

6.7

Tianjin Spring Royal Palace II

144.6

86.6

58.0

Zhengzhou International New City III D

46.1

45.2

0.9

Zhengzhou Hangmei International Wisdom City I

64.7

56.3

8.4

Zhengzhou International New City III B

118.8

118.5

0.3

Changsha Furong Thriving Family

72.3

72.3

0.0

Chengdu Xinyuan City

741.6

280.5

461.1

Kunshan Xinyu Jiayuan

107.9

59.4

48.5

Xingyang Splendid IV

151.8

84.1

67.7

Suzhou Suhe Bay *

62.6

62.6

-

Zhengzhou Hangmei International Wisdom City II

78.4

39.1

39.3

Qingdao Royal Dragon Bay

162.2

104.3

57.9

Jinan Royal Spring Bay

116.9

64.1

52.8

Xinyuan Golden Water View City-Zhengzhou

331.4

100.7

230.7

Zhengzhou Fancy City III

80.6

77.6

3.0

Zhengzhou International New City III C

82.3

73.8

8.5

Zhengzhou International New City IV A12

199.7

181.8

17.9

Zhengzhou International New City IV B10

92.3

67.9

24.4

Suzhou Galaxy Bay

76.5

73.3

3.2

Suzhou Gusu Shade I

12.0

8.8

3.2

Dalian International Health Technology Town I

103.8

44.7

59.1

Xingyang Splendid V

80.5

61.6

18.9

Suzhou Gusu Shade II **

14.3

8.4

5.9

Zhengzhou International New City V A04

104.9

39.6

65.3

Huzhou Silk Town ***

141.4

22.6

118.8

Foshan Xinchuang AI International Science and Technology Innovation Valley

194.4

20.4

174.0

Suzhou Linhu Lake****

156.4

5.4

151.0

Others

57.5

-

57.5

Total active projects

6,223.3

4,394.1

1,829.2

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

 

** The Company owns a 19.99% equity interest in Suzhou Litai Real Estate Co., Ltd., which develops Suzhou Gusu Shade II. The Company accounts for its investment under the equity method.

 

*** The Company owns a 51% equity interest indirectly in Huzhou Xinhong Renju Construction Development Co., Ltd., which develops Huzhou Silk Town. Based on the articles of association, the company cannot exercise control of Huzhou Silk Town, but has the ability to exercise significant influence over Huzhou Silk Town's operating and financial decisions and accounted for it as an equity method investment.

 

**** The Company owns a 24% equity interest in Suzhou Rongjingchen Real Estate Co., Ltd., which develops Suzhou Linhu Lake. The Company accounts for its investment under the equity method.

As of June 30, 2020, the Company's total saleable GFA was approximately 4,279,200 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:


Unsold GFA as of June 30, 2020

 (m2, 000s)

Pre-sales

Scheduled




Tongzhou Xinyuan Royal Palace-Beijing

102.3

Q3, 2020


Xinyuan Chang'an Royal Palace-Xi'an

226.0

To be determined


Zhengzhou International New City Land Bank(all land is grouped together and will be developed gradually)

879.3

To be determined


Zhuhai Xin World

70.0

To be determined


Lingshan Bay Dragon Seal-Qingdao

383.1

Q3, 2020


Zhengzhou Hangmei Project Land Bank(all land is grouped together and will be developed gradually)

181.5

To be determined


Wuhan Hidden Dragon Royal Palace

182.9

To be determined


Dalian International Health Technology Town II

34.4

To be determined


Foshan Xinchuang AI International Science and Technology Innovation Valley II

262.4

To be determined


Taizhou Yihe Yayuan *

128.1

To be determined






Total projects under planning

2,450.0



Total active projects

1,829.2



Total of all Xinyuan unsold projects in China

4,279.2







* The Company owns 40% equity interest in Taizhou Yiju Real Estate Co., Ltd. which develops Taizhou Yihe Yayuan.

Update on United States Real Estate Projects

At the Oosten project in Brooklyn, New York City, as of June 30, 2020, a total of 179 units out of 216 units were sold. Total revenue from this project has reached US$261.0 million. Of the remaining 37 unsold units, 23 are rented with lease terms ranging from 12 months to 24 months.

At the Hudson Garden project, BLOOM ON FORTY FIFTH, in the Hell's Kitchen area of Manhattan, New York City, as of June 30, 2020, the Company had completed superstructure construction, precast concrete facade, and windows installation. Of the total sellable 34,903 square feet of retail/commercial space, a total of 28,090 square feet have been leased to the U.S. department store retailer Target for a 20 year term and another 1,910 square feet have been leased to a dermatologist's office for a 15 year lease term.

The construction is currently ahead of schedule and under budget. The onsite sales office and model apartments were fully furnished during the second quarter 2020 and ready to show to brokers and potential buyers. The residential unit sales strategy started with a first phase launch in China during Q4 2019 in which we exhibited in five Tier 1 and Tier 2 cities, leveraging Xinyuan's own client database and established third-party channels. The start of the second phase in New York City, will depend on the progress of New York City's re-opening from the pandemic.

At the RKO project in Flushing, New York, the Company continued to execute on the planning, governmental approvals, and pre-development activities. As of June 30, 2020, we have engaged GKV Architects to develop new architectural plans, and completed the schematic design for the condo and hotel mixed-use development. The demolition is expected to be completed by the end of November 2020.

Update on the United Kingdom Real Estate Project

During the second quarter of 2020, work on site continued to progress, primarily focused on internal fit out, but completion will be delayed from the contract completion date of October 2020 due to the impact of Covid-19 on construction sites. Our current forecast is that construction will be completed in first quarter 2021, assuming no further restrictions on working conditions.

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, 144 apartments have been sold.

Business Outlook

The company expects 2020 contract sales of 20 to 22 billion RMB, with consolidated net income similar to 2019.

However, the above outlook is based on information available as of the date of this press release and reflects the Company's current expectations, which may be subject to change in light of uncertainties relating to future COVID-19 developments.

Conference Call Information

The Company will hold a conference call at 8:00am ET on September 2, 2020, to discuss its second quarter 2020 results. Listeners may access the call by dialing:

US Toll Free: 1-866-575-6539
Toll/International: 1-323-994-2082
China National: 4001 209101
Hong Kong Toll Free: 800 961 105
United Kingdom Toll Free: 0800 358 6377

A webcast will also be available through the Company's investor relations website at http://ir.xyre.com.

A replay of the conference call may be accessed by phone at the following numbers until September 9, 2020:

US: 1-844-512-2921
International: 1-412-317-6671
Access code: 7000011

A live and archived webcast of the conference call will be available at http://ir.xyre.com.

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 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, among others. 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 City. 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 impact of the COVID-19 pandemic on the real estate markets and economies of the cities and countries in which we operate; 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 significant differences between our audited financial statements and this unaudited financial information.

For more information, please contact:

Xinyuan Real Estate Co., Ltd.
Mr. Charles Wang
Investor Relations Director
Tel: +86 (10) 8588-9376
Email: irteam@xyre.com

The Blueshirt Group

In U.S.: Ms. Julia Qian
Email: Julia@blueshirtgroup.com

In China: Ms. Susie Wang
Mobile: +86 (138) 1081-7475
Email:  susie@blueshirtgroup.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




June 30,



March 31,



June 30,




2020



2020



2019




(unaudited)



(unaudited)



(unaudited)















Total revenue



284,361




125,769




609,439















Total costs of revenue



(265,143)




(97,663)




(450,224)


Gross profit



19,218




28,106




159,215















Selling and distribution expenses



(15,943)




(6,340)




(20,633)


General and administrative expenses



(35,434)




(37,678)




(42,343)















Operating (loss)/income



(32,159)




(15,912)




96,239















Interest income



4,322




4,169




4,964


Interest expense



(30,434)




(30,263)




(28,384)


Gain on short-term investments



3,460




901




505


Other loss



(1,114)




(208)




(867)


Net gain/(loss) on debt extinguishment



332




(1,110)




(1,955)


Exchange loss



(1,960)




(850)




(4,354)


Share of gain/(loss) of equity investees



473




(1,024)




(1,702)















(Loss)/income from operations before income taxes



(57,080)




(44,297)




64,446















Income tax benefits/(expenses)



27,021




5,157




(44,621)















Net (loss)/income



(30,059)




(39,140)




19,825


Net loss/(income) attributable to non-controlling interest



3,819




(383)




(9,171)


Net (loss)/income attributable to Xinyuan Real Estate Co., Ltd. shareholders



(26,240)




(39,523)




10,654















(Loss)/earnings per ADS:













Basic



(0.49)




(0.73)




0.19


Diluted



(0.49)




(0.73)




0.19


ADS used in computation:













Basic



53,639




53,904




57,003


Diluted



53,639




53,904




57,371


 

 

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)

 






Six months ended







June 30,



June 30,






2020



2019






(unaudited)



(unaudited)













Total revenue





410,130




1,078,292













Total costs of revenue





(362,806)




(788,028)


Gross profit





47,324




290,264













Selling and distribution expenses





(22,283)




(40,039)


General and administrative expenses





(73,112)




(78,987)













Operating (loss)/income





(48,071)




171,238













Interest income





8,491




9,049


Interest expense





(60,697)




(52,690)


Gain on short-term investments





4,361




1,676


Other expense





(1,322)




(773)


Loss on extinguishment of debt





(778)




(6,544)


Exchange loss





(2,810)




(809)


Share of loss of equity investees





(551)




(3,302)













(Loss)/income from operations before income taxes





(101,377)




117,845













Income tax benefits/(expenses)





32,178




(79,830)













Net (loss)/income





(69,199)




38,015


Net loss /(income) attributable to non-controlling interest





3,436




(7,752)


Net (loss)/income attributable to Xinyuan Real Estate Co., Ltd. shareholders





(65,763)




30,263













(Loss)/earnings per ADS:











Basic





(1.22)




0.52


Diluted





(1.22)




0.52


ADS used in computation:











Basic





53,722




57,950


Diluted





53,722




58,309

















 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(All US$ amounts and number of shares data in thousands)

 



June 30,



March 31,



December 31,




2020



2020



2019




(unaudited)



(unaudited)



(audited)


ASSETS













Current assets













Cash and restricted cash



820,769




794,076




989,587


Short-term investments



5,850




7,060




5,596


Accounts receivable



88,103




87,508




97,912


Other receivables



330,833




273,866




287,300


Deposits for land use rights



28,816




25,970




26,375


Other deposits and prepayments



300,348




292,506




277,463


Advances to suppliers



66,317




46,081




44,358


Real estate properties development completed



415,430




434,478




458,205


Real estate properties under development



3,094,871




3,176,368




3,254,388


Amounts due from related parties



266,735




201,958




200,758


Amounts due from employees



1,594




2,392




2,351


Other current assets



18,186




13,999




772















Total current assets



5,437,852




5,356,262




5,645,065















Restricted cash, non-current



179,059




138,975




112,998


Real estate properties held for lease, net



511,800




516,158




515,869


Property and equipment, net



40,043




41,086




43,004


Long-term investment



593,547




602,224




613,620


Deferred tax assets



188,034




267,021




260,153


Deposits for land use rights and properties



32,488




32,463




32,969


Amounts due from related parties



39,465




80,824




82,687


Contract cost assets



20,703




22,239




23,093


Operating lease right-of-use assets



8,635




9,563




11,801


Other assets



76,415




77,628




80,405















TOTAL ASSETS



7,128,041




7,144,443




7,421,664


 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(All US$ amounts and number of shares data in thousands)

 



June 30,



March 31,



December 31,




2020



2020



2019




(unaudited)



(unaudited)



(audited)


LIABILITIES AND













SHAREHOLDERS' EQUITY













Current liabilities













Accounts payable and notes payable



992,679




1,049,106




1,166,660


Short-term bank loans and other debt



56,881




38,719




73,419


Customer deposits



1,224,998




1,152,811




1,106,099


Income tax payable



155,914




279,473




298,228


Other payables and accrued liabilities



530,436




400,140




323,164


Payroll and welfare payable



10,269




10,952




24,224


Current portion of long-term bank loans and other debt



1,177,657




1,393,265




1,418,955


Lease liability, current portion



7,143




12,033




11,284


Mandatorily redeemable non-controlling interests



6,981




6,856




8,857


Amounts due to related parties



53,667




54,869




53,682















Total current liabilities



4,216,625




4,398,224




4,484,572















Non-current liabilities













Long-term bank loans



747,387




795,867




686,065


Other long-term debt



1,026,103




811,717




1,036,691


Deferred tax liabilities



299,468




337,366




338,593


Unrecognized tax benefits



114,085




74,049




73,605


Lease liability



3,373




6,233




10,187


Amounts due to related parties



24,853




-




-















TOTAL LIABILITIES



6,431,894




6,423,456




6,629,713















Shareholders' equity













Common shares



16




16




16


Treasury shares



(114,454)




(114,284)




(113,720)


Additional paid-in capital



546,022




544,860




543,291


Statutory reserves



175,002




175,020




175,008


Retained earnings



37,301




85,286




135,873


Accumulated other comprehensive loss



(44,843)




(70,745)




(50,167)


Total Xinyuan Real Estate Co., Ltd. shareholders' equity



599,044




620,153




690,301


Non-controlling interest



97,103




100,834




101,650


Total equity



696,147




720,987




791,951















TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY



7,128,041




7,144,443




7,421,664


Cision View original content:http://www.prnewswire.com/news-releases/xinyuan-real-estate-co-ltd-announces-second-quarter-2020-financial-results-301122854.html

Source: Xinyuan Real Estate Co., Ltd.
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