Yanlord Land Group’s pre-contracted sales grew 28.8% to SG$1.379b
Though revenue in 1Q12 was lower compared to 1Q11 as a majority of the portion of pre-contracted sales awaits recognition in subsequent financial periods.
In a news release, Singapore Exchange-listed Yanlord Land Group Limited, a real estate developer focused on developing high-end integrated commercial and residential property projects in strategically selected high-growth cities in the People’s Republic of China, announced its financial results for the period of January to March 2012.
While volatilities arising from austerity measures promulgated by the PRC central government continue to weigh on the PRC real estate sector, Yanlord’s high quality developments continue to be well-received in the PRC. Driven by positive demand, pre-contracted sales as at 31 March 2012 rose approximately RMB1.549 billion (SG$308.33 million) or 28.8% to RMB6.927 billion (SG$1.379 billion) from RMB5.378 billion (SG$1.070 billion) as at 31 December 2011. The progressive recognition of these pre-contracted sales in subsequent financial periods will provide greater confidence of Group performance in FY 2012. As of 31 March 2012, the Group has received RMB4.466 billion (SG$888.8 million) as advances for pre-sold properties.
In line with the Group’s delivery schedule whereby a larger proportion of the Group’s sales is expected to be recognised in the subsequent financial periods, the Group’s recognised revenue in 1Q 2012 declined to RMB466.1million (SG$92.77 million) from RMB2.933 billion (SG$583.77 million) in 1Q 2011. The decline was largely attributable to a lower GFA of 10,499 sqm delivered in 1Q 2012 compared to 185,056 sqm delivered in 1Q 2011. ASP for projects delivered in 1Q 2012 rose 109% to RMB32,025 (SG$6,371) per sqm from RMB15,325 (SG$3,050) per sqm in 1Q 2011 owing to a change in the product mix composition which included higher priced projects such as Yanlord Townhouse in Shanghai and Yanlord Riverside Plaza Phase 1 in Tianjin. ASP for FY 2011 was RMB22,239 (SG$4,426) per sqm.
In line with the above performance, net profit attributable to equity holders of the Company declined to RMB135.6 million (SG$26.99 million) in 1Q 2012 from RMB267.9 million (SG$53.29 million) in 1Q 2011. Led by the higher ASP achieved due to the change in product mix, gross profit margin rose 4.4 ppts to 36.6%. Net attributable margin similarly rose 20.0 ppts to 29.1% in 1Q 2012 driven by the higher gross margin achieved and a net foreign exchange gain for the period under review. Fully diluted earnings per share in 1Q 2012 was RMB 6.47 cents (SG$1.29).
Attributable to the Group’s prudent financial policies, Yanlord remains in a strong financial position. Cash and bank balances as at 31 March 2012 was around SG$876 million and will serve to fuel the Group’s future development.
The Group will continue to launch a new project and new batches of its existing projects in 2Q 2012, namely, Yanlord Yangtze Riverbay Town Phase 2 in Nanjing, Yanlord Sunland Gardens Phase 1 in Shanghai, Yanlord Lakeview Bay - Land Parcels A2 and A6 in Suzhou, Yanlord Riverside Plaza Phase 2 and Yanlord Riverside Gardens Phase 1 in Tianjin.
Commenting on the Group’s financial performance, Mr. Zhong Sheng Jian, Yanlord’s Chairman and Chief Executive Officer, said, “Pre-contracted sales continues to show strong growth in 1Q 2012 despite uncertainties in the PRC real estate sector, reflecting the continued customer confidence and demand for Yanlord’s high quality residential developments. Consistent with our project delivery schedule, net profit was impacted for the first quarter as we recognised a lower GFA. However, we expect to recognise most of our current pre-contracted sales in the subsequent financial periods which will drive our performance for FY 2012.”