Yanlord Q3 net profit jumps 10-fold

YANLORD Land Group’s net profit for the third quarter ended Sept 30 jumped 10-fold year on year to $91.1 million from $8.8 million.

The surge in earnings attributable to equity-holders came on the back of a spectacular rise in residential sales.

Revenue leapt seven-fold to $583.4 million from $83.5 million a year ago as the gross floor area (GFA) that the group delivered was 770 per cent higher than year-ago period.

A major revenue growth driver was the high profit-margin project at Yanlord Riverside City (Phase 2 and 3) in Shanghai, which accounted for 58.2 per cent of the gross revenue from property sales in the third quarter. Average selling price (ASP) per sq m, however, was little changed from the third quarter last year.

For the first nine months this year, Yanlord’s revenue surged 133 per cent from a year ago to $1.39 billion, supported by a rise in GFA delivered and higher ASP per sq m achieved as a result of the change in product mix. This fuelled a 142 per cent rise in net profit attributable to equity-holders for the first nine months to $207 million.

‘The board of directors is confident of the group’s performance relative to the industry trend for the next reporting period and the next 12 months based on the number of units pre-sold to-date, expected delivery schedules and on-schedule construction works in progress,’ Yanlord said in its financial results.

Based on existing sales contracts of pre-sold units, the total pre-contracted sales of $987.5 million as at Sept 30 will be progressively recognised as revenue in the subsequent quarters. As at Sept 30, the group has received advances for pre-sold properties – recorded as ‘other payables’ in its financial statement – amounting to about $778.3 million. Yanlord said it will continue to tap the recovery of China’s real estate industry with new launches in the fourth quarter. It has scheduled to start construction works on a number of key projects.

The group is also expanding its land bank. In September, it acquired four prime residential sites with a total planned GFA of about 162,074 sq m in Waigaoqiao District in Pudong for 2.6 billion yuan (S$528 million). A month later, it signed a pact with the Tangshan Nanhu Eco-City Administrative Committee to jointly explore high-end residential development in Nanhu Eco-City in Tangshan, Hebei.

‘We firmly believe that these strategic initiatives, together with Yanlord’s reputation in building high-quality residential developments, will contribute positively to our business performance,’ said Zhong Sheng Jian, Yanlord’s chairman and chief executive officer.

Source: Business Times, 12 Nov 2009