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DEMAND for high-end housing in China drove developer Yanlord Land Group's second-quarter revenue 56 per cent higher year-on-year to $615.8 million. Net profit for the three months ended June 30 thus rose 36.3 per cent to $91.6 million, from $67.2 million in Q2 last year.
The revenue increase resulted from a higher average selling price per square metre in Q2, and more of the high-margin Yanlord Riverside City in Shanghai coming onstream.
Yanlord said that its revenue was mostly derived from the sale of residential properties, with a fraction coming from property management, rental, and other ancillary services.
Fully diluted earnings per share rose to 4.69 cents from 3.46 cents in Q2 2008. The group's net asset value rose to $1.13 per share on June 30, from $1.02 on Dec 31, 2008.
For the half-year, net profit grew 51.3 per cent to $115.8 million as revenue rose 56.7 per cent to $802.2 million.
The growth in net profit came even though the total gross floor area of 156,281 sq m delivered was 8 per cent lower than last year, because the higher average selling price drove gross profit margin up to 62.6 per cent.
At June 30, the group had a cash balance of $1.2 billion and net gearing of 9.3 per cent, down from 51.4 per cent on Dec 31, 2008.
Yanlord's chairman and chief executive Zhong Sheng Jian said that this will enable the group to acquire development sites and make other strategic investments when opportunities arise.
'Property development in the PRC continues to exhibit strong growth potential,' Mr Zhong said. Capitalising on the recovery of the real estate industry in China, the group intends to launch new batches of existing projects in Shanghai, Nanjing, Suzhou, Chengdu and Tianjin.
Construction on several key projects will begin in the second half of this year. They include two each in Shanghai, Nanjing, Tianjin and one each in Suzhou and Zhuhai.
By June 30, the group received advances for pre-sold properties amounting to $536.2 million. Total contracted pre-sales of $800.1 million at June 30 will be progressively realised as revenue in coming quarters.
Yanlord's share price slid eight cents to close at $2.46 yesterday.
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