Friday, February 26, 2010

Yanlord net jumps 44% in FY09 despite poor Q4

YANLORD Land Group’s net profit dropped 16 per cent to $118.4 million for the fourth quarter ended Dec 31, 2009, as revenue and gross profit margins plummeted.

But for the full year, net profit jumped 44 per cent to $325.4 million as strong demand for its residential projects in the first nine months lifted sales and prices.

Q4 revenue dived 48 per cent year-on-year to $214.1 million with gross profit margin plunging 23.9 percentage points to 38.4 per cent due mainly to the change in product mix. Yanlord attributed this to a decline in gross floor area delivered and lower average selling prices (ASPs) because of lower proportion of high-margin projects sold compared to the fourth quarter of 2008.

Its revenue for the year surged 59 per cent to $1.6 billion as the gross floor area delivered rose 33.5 per cent while ASPs grew 13.7 per cent to 19,658 yuan per square metre (psm). Q4 earnings per share fell to 6.09 cents from 7.67 cents a year ago.

As at end-2009, the group’s total pre-contracted sales amounted to $1.2 billion.

Fair value loss on investment properties, however, widened to $120.69 million in 2009 from $81.22 million in 2008.

As at Dec 31, 2009, cash and bank balances were substantially higher at $1.36 billion, up from about $0.4 billion a year earlier. Yanlord attributed this to prudent financial policies and strong performance.

The group said its directors are confident of the company’s performance relative to the industry trend for the next reporting period and the next 12 months.

Yanlord has proposed a first and final dividend of 1.68 Singapore cents per share, representing a payout ratio of about 10 per cent.

Yanlord’s chairman and chief executive Zhong Sheng Jian said the group remains confident of the long-term prospects of China’s real estate sector despite near-term uncertainties arising from regulatory policies.

‘We will continue to focus on our business strategies and comparative advantages in the development of quality residential apartments in prime locations within high-growth PRC cities,’ he said.

Last December, the group obtained a three- year US$400 million term loan facility and will use this to refinance the outstanding amount of a US$200 million facility it obtained in 2007 and for general corporate purposes, including acquiring new land.

This year, the group has already launched new batches of apartment units in Yanlord Riverside Plaza (Phase 1) in Tianjin and Yanlord Riverside City (Phase 3) in Shanghai. These projects have recorded new highs in ASPs, rising 32.2 per cent to 53,033 yuan psm in Shanghai and 27.4 per cent to 23,241 yuan psm in Tianjin.

Yanlord said it will continue to launch new batches of its projects this quarter in Shanghai, Suzhou, Tianjin and Zhuhai.

Yanlord shares ended trading yesterday at $1.77, one cent down.

Source: Business Times, 26 Feb 2010

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