XI’AN, China, August 14, 2014 /PRNewswire/ — China Housing & Land Development, Inc. (“China Housing” or the “Company”; Nasdaq: CHLN) today announced its financial results for the quarter ended June 30, 2014.
Highlights for Q2 2014:
- Total revenue in the second quarter of 2014 was $44.1 million compared to $22.0 million in the first quarter of 2014 and $57.8 million in the second quarter of 2013.
- Total gross floor area (“GFA”) sales were 30,408 sq. meters during the second quarter of 2014, compared with 20,416 sq. meters in the first quarter of 2014 and 48,439 sq. meters in the second quarter of 2013.
- Average residential selling price (“ASP”) in the second quarter of 2014 was RMB 6,493, compared with RMB 5,919 in the first quarter of 2014, and RMB 7,499 in the second quarter of 2013.
- Gross profit was $(816,509) in the second quarter of 2014 compared to $5.3 million in the first quarter of 2014 and $17.6 million in the second quarter of 2013. Second quarter 2014 gross margin was (-1.9)%, compared with 24.1% in the first quarter of 2014 and 30.4% in the second quarter of 2013.
- SG&A expenses as a percentage of total revenue was 8.8%, from 18.1% in the first quarter of 2014 and 8.5% in the second quarter of 2013.
- Operating loss was $6.6 million in the second quarter of 2014 compared to operating loss of $205 thousand in the first quarter of 2014, and operating income of $8.5 million in the second quarter of 2013.
- Net loss attributable to the Company in the second quarter of 2014 was $6.8 million, or $(0.20) per diluted share, compared to a net loss of $774 thousand, or $(0.02) per diluted share, in the first quarter of 2014 and net income of $5.9 million, or $0.17 per diluted share, in the second quarter of 2013.
Mr. Pingji Lu, China Housing’s Chairman, commented, “While our second quarter contract sales came within the high end of projections, our profitability was impacted by revenue and cost adjustments at three of our projects as well as an impairment charge. Five projects contributed to the majority of our sales in the second quarter, led by our Park Plaza project. We also began to recognize revenues from our Puhua Phase IV project.”
“On a macro level, China’s real estate market environment is slowing with both sales and ASP’s on the decline. For the remainder of this year, we expect market conditions to remain challenging. In an effort to strengthen sales, we are implementing new incentives, including lowering down payment requirements for home buyers.”
“As we look at the second half of the year, we will concentrate on reducing our unit inventory and driving pre-sales at our Golden Bay and Puhua Phase IV projects. We have also delayed the pre-sales start dates of our Park Plaza Phase II and Ankang Project Phase II projects from the third quarter of this year to 2015 in an effort to reduce expenses and conserve our balance sheet until market conditions improve. Finally, we repurchased 131,600 shares totaling $0.3 million in the second quarter.”
Total revenue in the second quarter of 2014 increased 99.9% to $44.1 million from $22.0 million in the first quarter of 2014 and decreased 23.7% from $57.8 million in the second quarter of 2013. Other revenue in the second quarter of 2014 was $3.3 million, compared to $6.2 million in the first quarter of 2014 and $7.0 million in the second quarter of 2013.
In the second quarter of 2014, the majority of the Company’s real estate revenue came from its Park Plaza, Ankang, Puhua Phase Two and Three projects. Second quarter of 2014 contract sales totaled $31.7 million compared with $19.8 million in the first quarter of 2014 and $59.0 million in the second quarter of 2013. Total gross floor area (“GFA”) sales were 30,408 sq. meters during the second quarter of 2014, compared with 20,416 sq. meters in the first quarter of 2014 and 48,439 sq. meters in the second quarter of 2013. The Company’s ASP in the second quarter of 2014 was RMB 6,493, compared with RMB 5,919 in the first quarter of 2014, and RMB 7,499 in the second quarter of 2013.
Gross profit for the three months ended June 30, 2014 was $(816,509), from $5.3 million in the first quarter of 2014 and $17.6 million in the second quarter of 2013. Gross profit margin for the three months ended June 30, 2014 was (1.9)%, compared to 24.1% in the first quarter of 2014 and the 30.4% in the second quarter of 2013. The decrease of gross profit margin in the second quarter of 2014 is due to the adjustment of the total estimated revenue and cost of the Company’s Puhua Phase II, Puhua Phase III and Park Plaza Phase I projects as well as a $4.4 million impairment charge related to the Park Plaza Phase I project.
SG&A expense was $3.9 million in the second quarter of 2014, compared to $4.0 million in the first quarter of 2014 and $4.9 million in the second quarter of 2013. SG&A expense as a percentage of total revenue was 8.8%, compared with 18.1% in the first quarter of 2014 and 8.5% in the second quarter of 2013. The decrease in SG&A expense was mainly due to decreased advertising expenses during the second quarter of 2014.
Operating loss in the second quarter of 2014 was $6.6 million, compared to operating loss of $205 thousand in the first quarter of 2014, and operating income of $8.5 million in the second quarter of 2013. The year-over-year decrease was mainly due to reduced sales revenue and increased cost of sales.
Net loss attributable to China Housing in the second quarter of 2014 was $6.8 million, or ($0.20) per diluted share. This performance compares with net loss of $(774) thousand million, or $(0.02) per diluted share, in the first quarter of 2014 and net income of $5.9 million, or $0.17 per diluted share, in the second quarter of 2013.
Sequential Quarterly Revenue Breakout Comparison
|
Project |
Q2 2014 |
Q1 2014 |
||||||||||||||
|
Recognized Revenue |
Contract Sales |
GFA Sold |
ASP |
Unsold GFA |
POC |
Recognized Revenue |
Contract Sales |
GFA Sold |
ASP |
|||||||
|
($) |
($) |
(m2) |
(RMB) |
(m2) |
($) |
($) |
(m2) |
(RMB) |
||||||||
|
Projects Under Construction |
||||||||||||||||
|
Park Plaza Phase One |
15,503,089 |
12,092,922 |
9,117 |
8,265 |
44,689 |
94.5% |
4,984,679 |
3,937,986 |
2,811 |
8,549 |
||||||
|
Puhua Phase Three |
6,472,271 |
1,382,502 |
1,412 |
6,101 |
59,096 |
77.4% |
2,663,265 |
1,963,774 |
1,788 |
6,700 |
||||||
|
Puhua Phase Two-East Region |
6,890,399 |
5,969,853 |
4,875 |
7,631 |
89,107 |
78.7% |
1,872,393 |
1,919,787 |
1,515 |
7,731 |
||||||
|
Ankang Phase One |
7,386,849 |
4,972,520 |
7,596 |
4,079 |
56,970 |
56.1% |
5,269,189 |
5,184,245 |
7,860 |
4,025 |
||||||
|
Puhua Four |
3,485,109 |
6,192,960 |
6,323 |
6,102 |
135,439 |
24.9% |
N/A |
6,043,688 |
6,013 |
6,133 |
||||||
|
Projects Completed |
||||||||||||||||
|
Puhua Phase One |
(284,182) |
(284,182) |
– |
– |
5,506 |
100% |
677,091 |
421,314 |
189 |
13,629 |
||||||
|
Puhua Phase Two-West Region&New Coast Line |
616,066 |
616,066 |
566 |
6,780 |
30,459 |
100% |
(56,642) |
98,430 |
107 |
5.600 |
||||||
|
JunJing III |
309,952 |
309,952 |
259 |
7,445 |
647 |
100% |
396,809 |
236,812 |
133 |
10,844 |
||||||
|
JunJing I |
433,310 |
433,310 |
259 |
10,407 |
4,107 |
100% |
– |
– |
– |
– |
||||||
|
Other Income |
3,254,400 |
6,235,627 |
||||||||||||||
|
Total |
44,067,263 |
31,685,903 |
30,408 |
6,493 |
22,042,411 |
19,806,036 |
20,416 |
5,919 |
||||||||
|
Q-o-Q Change |
99.9% |
60.0% |
48.9% |
9.7% |
(60.7%) |
(36.1%) |
(28.6%) |
(10.3%) |
||||||||
Total debt outstanding as of June 30, 2014 was $327.9 million compared with $300.7 million on December 31, 2013. Net debt outstanding (total debt less cash and restricted cash) as of June 30, 2014 was $208.6 million compared with $161.8 million on December 31, 2013. The Company’s net debt as a percentage of total capital (net debt plus shareholders’ equity) was 62.7 percent on June 30, 2014 and 54.1 percent on December 31, 2013.
|
Q2 2014 |
||
|
Projects in Planning |
Unsold GFA |
First Pre-sales Scheduled |
|
(m2) |
||
|
Golden Bay |
326,494 |
Q4 2014 |
|
Textile City |
630,000 |
Q2 2016 |
|
Park Plaza- Phase II |
60,057 |
Q3 2015 |
|
Ankang Project- Phase II |
207,794 |
Q1 2015 |
|
Total projects in planning |
1,224,345 |
|
Third Quarter 2014 Outlook
Total contract sales for the third quarter 2014 are expected to be in the range of $22.5 million to $25.7 million, compared with $18.6 million in the third quarter of 2013. The Company is reporting revenues, which are subject to percentage of completion alterations.
Conference Call Information
Management will host a conference call at 7:30 am ET on August 14, 2014. Listeners may access the call by dialing +1-913-312-1301. To listen to the live webcast of the event, please go to http://public.viavid.com/player/index.php?id=110631. Listeners may access the call replay, which will be available through August 21, 2014, by dialing +1-858-384-5517; passcode: 2120628.
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. 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 Unaudited Interim Condensed Consolidated Balance Sheets As of June 30, 2014 and December 31, 2013
|
||||||||||
|
June 30, 2014 |
December 31, 2013 |
|||||||||
|
ASSETS |
||||||||||
|
Cash |
$ |
7,457,666 |
$ |
21,320,071 |
||||||
|
Cash – restricted |
111,932,658 |
117,534,900 |
||||||||
|
Short-term investment |
21,537,169 |
– |
||||||||
|
Accounts receivable, net of allowance for doubtful |
||||||||||
|
accounts of $580,020 and $594,382, respectively |
39,075,926 |
41,158,998 |
||||||||
|
Construction in excess of billing |
2,056,063 |
2,106,975 |
||||||||
|
Other receivables, prepaid expenses and other assets, net |
8,878,046 |
6,197,023 |
||||||||
|
Real estate held for development or sale |
356,226,571 |
289,474,812 |
||||||||
|
Property and equipment, net |
42,075,148 |
36,281,168 |
||||||||
|
Advances to suppliers |
1,579,662 |
697,823 |
||||||||
|
Deposits on land use rights |
16,280,063 |
59,155,165 |
||||||||
|
Intangible asset, net |
23,464,677 |
42,453,473 |
||||||||
|
Goodwill |
1,922,363 |
1,969,964 |
||||||||
|
Deferred financing costs |
724,978 |
1,142,715 |
||||||||
|
Total assets |
$ |
633,210,990 |
$ |
619,493,087 |
||||||
|
LIABILITIES |
||||||||||
|
Accounts payable |
$ |
58,336,793 |
$ |
59,400,262 |
||||||
|
Advances from customers |
44,010,242 |
45,441,402 |
||||||||
|
Accrued expenses |
16,544,275 |
17,439,541 |
||||||||
|
Income tax payable |
23,310,900 |
24,534,095 |
||||||||
|
Other taxes payable |
9,751,086 |
7,139,870 |
||||||||
|
Other payables |
14,633,114 |
12,755,824 |
||||||||
|
Loans from employees |
30,809,108 |
25,759,453 |
||||||||
|
Loans payable |
297,137,495 |
274,917,332 |
||||||||
|
Deferred tax liability |
14,390,811 |
14,782,118 |
||||||||
|
Total liabilities |
508,923,824 |
482,169,897 |
||||||||
|
SHAREHOLDERS’ EQUITY |
||||||||||
|
Common stock: $.001 par value, authorized 100,000,000 shares; Issued 34,848,158 and 35,849,204, respectively |
||||||||||
|
34,848 |
35,849 |
|||||||||
|
Additional paid in capital |
52,483,510 |
51,347,620 |
||||||||
|
Treasury stock |
(115,759) |
(2,400,288) |
||||||||
|
Statutory reserves |
11,535,242 |
11,535,242 |
||||||||
|
Retained earnings |
38,239,701 |
48,696,878 |
||||||||
|
Accumulated other comprehensive income |
22,109,624 |
28,107,889 |
||||||||
|
Total shareholders’ equity |
124,287,166 |
137,323,190 |
||||||||
|
Total liabilities and shareholders’ equity |
$ |
633,210,990 |
$ |
619,493,087 |
||||||
|
The accompanying notes are an integral part of these interim condensed consolidated financial statements. |
||||||||||
|
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Statements of Operations For The Three and Six Months Ended June 30, 2014 and 2013
|
||||||||||||||||
|
3 Months |
3 Months |
6 Months |
6 Months |
|||||||||||||
|
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
|
REVENUES |
||||||||||||||||
|
Real estate sales |
$ |
40,812,863 |
$ |
50,757,630 |
$ |
56,619,647 |
$ |
91,049,447 |
||||||||
|
Other revenue |
3,254,400 |
6,996,473 |
9,490,027 |
18,095,597 |
||||||||||||
|
Total revenues |
44,067,263 |
57,754,103 |
66,109,674 |
109,145,044 |
||||||||||||
|
COST OF SALES |
||||||||||||||||
|
Cost of real estate sales |
43,491,234 |
35,950,062 |
56,208,120 |
69,036,162 |
||||||||||||
|
Cost of other revenue |
1,392,538 |
4,232,921 |
5,401,995 |
13,768,820 |
||||||||||||
|
Total cost of revenues |
44,883,772 |
40,182,983 |
61,610,115 |
82,804,982 |
||||||||||||
|
Gross margin |
(816,509) |
17,571,120 |
4,499,559 |
26,340,062 |
||||||||||||
|
OPERATING EXPENSES |
||||||||||||||||
|
Selling, general, and administrative expenses |
3,876,829 |
4,901,936 |
7,866,311 |
8,059,940 |
||||||||||||
|
Stock-based compensation |
1,003,464 |
1,006,736 |
1,136,304 |
1,104,273 |
||||||||||||
|
Other expenses |
10,113 |
390,567 |
14,020 |
450,550 |
||||||||||||
|
Financing expense |
939,852 |
2,807,094 |
2,334,382 |
4,253,880 |
||||||||||||
|
Total operating expenses |
5,830,258 |
9,106,333 |
11,351,017 |
13,868,643 |
||||||||||||
|
Write off of property |
– |
563,710 |
||||||||||||||
|
Loss before provision for income taxes |
(6,646,767) |
8,464,787 |
(7,415,168) |
12,471,419 |
||||||||||||
|
Provision for current income taxes |
128,422 |
2,660,911 |
145,458 |
3,858,913 |
||||||||||||
|
Recovery of provision for deferred taxes |
(11,148) |
(50,013 ) |
(22,532) |
(114,648 ) |
||||||||||||
|
Provision for income taxes |
117,274 |
2,610,898 |
122,926 |
3,744,265 |
||||||||||||
|
NET (LOSS) INCOME |
$ |
(6,764,041) |
$ |
5,853,889 |
$ |
(7,538,094) |
$ |
8,727,154 |
||||||||
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
||||||||||||||||
|
Basic |
34,497,920 |
35,086,599 |
34,560,976 |
35,086,599 |
||||||||||||
|
Diluted |
34,497,920 |
35,244,724 |
34,560,976 |
35,166,098 |
||||||||||||
|
NET (LOSS) INCOME PER SHARE |
||||||||||||||||
|
Basic |
$ |
(0.20) |
$ |
0.17 |
$ |
(0.22) |
$ |
0.25 |
||||||||
|
Diluted |
$ |
(0.20) |
$ |
0.17 |
$ |
(0.22) |
$ |
0.25 |
||||||||
|
The accompanying notes are an integral part of these interim condensed consolidated financial statements. |
||||||||||||||||
|
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss) Income For The Three and Six Months Ended June 30, 2014 and 2013
|
||||||||||||||||
|
3 Months |
3 Months |
6 Months |
6 Months |
|||||||||||||
|
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||||
|
2014 |
2013 |
2014 |
2013 |
|||||||||||||
|
NET INCOME (LOSS) |
$ |
(6,764,041) |
$ |
5,853,889 |
$ |
(7,538,094) |
$ |
8,727,154 |
||||||||
|
OTHER COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
|
Gain (Loss) on foreign exchange |
513,397 |
2,691,556 |
(5,998,266) |
3,419,601 |
||||||||||||
|
COMPREHENSIVE (LOSS) INCOME |
$ |
(6,250,643) |
$ |
8,545,445 |
$ |
(13,536,359) |
$ |
12,146,755 |
||||||||
|
The accompanying notes are an integral part of these interim condensed consolidated financial statements. |
||||||||||||||||
|
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Statements of Cash Flows For The Six Months Ended June 30, 2014 and 2013
|
|||||||||||||
|
June 30, 2014 |
June 30, 2013 |
||||||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||||||||
|
Net (loss) income |
$ |
(7,538,094) |
$ |
8,727,154 |
|||||||||
|
Adjustments to reconcile net income to cash provided by (used in) operating activities: |
|||||||||||||
|
Depreciation |
1,194,943 |
1,307,424 |
|||||||||||
|
Stock-based compensation |
1,136,304 |
1,104,273 |
|||||||||||
|
Loss on disposal of property and equipment |
563,710 |
– |
|||||||||||
|
Amortization of deferred financing costs |
– |
40,071 |
|||||||||||
|
Amortization of intangible assets |
17,885,532 |
111,356 |
|||||||||||
|
Recovery of provision for deferred income taxes |
(22,532) |
(114,648 ) |
|||||||||||
|
(Increase) decrease in assets: |
|||||||||||||
|
Accounts receivable |
1,065,542 |
(20,188,803 ) |
|||||||||||
|
Construction in excess of billing |
– |
559,202 |
|||||||||||
|
Other receivable, prepaid expenses and other assets |
(2,712,898) |
(1,019,295) |
|||||||||||
|
Real estate held for development or sale |
(74,720,712) |
12,438,798 |
|||||||||||
|
Advance to suppliers |
(905,607) |
921,102 |
|||||||||||
|
Deposit on land use rights |
41,899,123 |
– |
|||||||||||
|
Deferred finance costs |
229,850 |
– |
|||||||||||
|
Increase (decrease) in liabilities: |
|||||||||||||
|
Accounts payable |
39,088 |
(3,206,184 ) |
|||||||||||
|
Advances from customers |
(208,062) |
(3,842,509 ) |
|||||||||||
|
Accrued expense and interests |
(510,917) |
(5,140,839 ) |
|||||||||||
|
Other payables |
2,215,782 |
1,132,342 |
|||||||||||
|
Income and other taxes payable |
2,177,039 |
5,464,411 |
|||||||||||
|
Net cash used in operating activities |
(18,208,909) |
(1,706,145 ) |
|||||||||||
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||||||||
|
Purchase of property and equipment |
(8,387,891) |
(1,310,211 ) |
|||||||||||
|
Purchase of short-term investment |
(21,537,169) |
– |
|||||||||||
|
Net cash used in investing activities |
(29,925,060) |
(1,310,211 ) |
|||||||||||
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||||||||
|
Change in restricted cash |
2,809,595 |
7,297 |
|||||||||||
|
Loans from banks |
38,586,481 |
89,372,766 |
|||||||||||
|
Loans from external parties |
10,006,351 |
42,985,007 |
|||||||||||
|
Payments on loans payable |
(21,818,551) |
(30,019,910 ) |
|||||||||||
|
Loans from or repayment to employees, net |
5,756,562 |
(5,328,304 ) |
|||||||||||
|
Purchase of treasury stock |
(635,970) |
– |
|||||||||||
|
Net cash provided by financing activities |
34,704,468 |
97,016,856 |
|||||||||||
|
INCREASE IN CASH |
(13,429,501) |
94,000,500 |
|||||||||||
|
Effects on foreign currency exchange |
(432,904) |
838,852 |
|||||||||||
|
CASH, beginning of period |
21,320,071 |
6,121,448 |
|||||||||||
|
CASH, end of period |
$ |
7,457,666 |
$ |
100,960,800 |
|||||||||
|
The accompanying notes are an integral part of these interim condensed consolidated financial statements. |
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