Highlights for the Fourth Quarter 2010
Total revenues were US$137.2 million, a 27.5% increase over US$107.6 million in the third quarter of 2010 and 5.5% above the high end of Company guidance range.
Contract sales totaled US$194.1 million, a 28.5% increase over US$151.0 million in the third quarter of 2010 and 29.4% above the high end of Company guidance range.
Total gross floor area ("GFA") sales were 173,200 square meters, 26.0% increase over 137,500 square meters in the third quarter of 2010 and 23.7% above the high end of Company guidance range.
Selling, General, and Administrative ("SG&A") expenses as a percent of total revenue continued to decline to 6.7% compared to 6.9% in the third quarter of 2010.
Net income was US$21.6 million, a 170.0% increase over US$8.0 million in the third quarter of 2010 and 35.0% over the high end of the Company guidance range.
Diluted net earnings per share attributable to ordinary shareholders was US$0.14 equivalent to US$0.28 per American Depositary Share ("ADS"), compared to diluted net earnings per share of US$0.05 equivalent to US$0.10 per ADS in the third quarter of 2010.
Cash and cash equivalents, including restricted cash, increased by US$32.1 million to US$295.6 million as of December 31, 2010 from US$263.5 million as of September 30, 2010. Short and long term debt decreased by US$46.4 million to US$295.9 million compared to US$342.3 million as of September 30, 2010.
The Company's wholly owned subsidiary, Henan Xinyuan Real Estate Co., Ltd. ("Xinyuan China") completed the purchase of the remaining 55% equity interest in Zhengzhou Jiantou Xinyuan Real Estate Co. Ltd. ("Jiantou Xinyuan") in November 2010.
After a strong fourth quarter of 2010, GFA sales are expected to experience a sharp seasonal sequential decrease to approximately 95,000 square meters due to the Chinese Traditional New Year in the first quarter of 2011. Contract sales are expected to reach approximately US$115 million with average selling prices advancing selectively in first quarter of 2011.
First quarter 2011 revenue using the percentage of completion method is expected to total around US$120 million and net income is expected to be around US$13 million.
For the year the Company believes that with 12 concurrent active projects from the second quarter onwards it will achieve contract sales growth of more than 20% reaching approximately US$710 million in 2011 over 2010's total of US$588.3 million. Revenue under the percentage of completion method is expected to grow by 40% reaching approximately US$650 million for the year, as accelerated construction spending and higher percent completions will lead to higher revenue recognition under the percentage of completion method of accounting. Net income is expected to grow more than 45% reaching approximately US$75 million as gross margin improves year-on-year and operating expenses grow less than revenue.