Yanlord H2 profit falls 13% despite 46% higher revenue

YANLORD Land Group Z 25 posted a net profit of 1.83 billion yuan (S$394.4 million) for the second half of the financial year ended Dec 31, 2021, down 13 per cent year on year from 2.1 billion yuan.

In its results on Sunday (Feb 27), the property developer said this was due to the decrease in other operating income and other gains, as well as fair value gain on investment property. The increase in administrative expenses was also a factor.

Other operating income and other gains include interest income, net gain or loss on remeasurement of retained interests in joint ventures, deposits forfeit and gain on disposal of subsidiaries. The figure had decreased by 61.9 per cent to 293 million yuan in H2 FY2021, from 768 million yuan in H2 FY2020, primarily due to decreases in interest income. 

Earnings per share likewise decreased 13 per cent to 0.9488 yuan per share, from 1.0867 yuan per share.

The net profit drop was despite revenue increasing 46 per cent on year to 21.64 billion yuan, from 14.8 billion yuan.

The group attributed it to an increase in gross floor area delivered to customers in H2 FY2021, although it was partially offset by a decrease in the average selling price per square metre (sq m). The decrease was due to the change in the composition of product-mix delivered.

For FY2021, the group's net profit inched up 2 per cent year on year to 2.66 billion yuan, from 2.59 billion yuan.

Its full-year revenue rose 46 per cent to 34.83 billion yuan, from 23.92 billion in FY2020, while its earnings per share stood at 1.3751 yuan, up marginally by 2 per cent year on year from 1.3419 yuan.

The group added that its full-year revenue was generated from assets including Four Seasons Heming Gardens in Suzhou, Yanlord Four Seasons New Garden in Shenzhen and Riverside Gardens in Suzhou, which made up 22.4 per cent, 18.5 per cent and 11.1 per cent respectively of gross revenue from sale of properties in FY2021.

The board has proposed a final dividend of S$0.068 per share for FY2021, same as the year before, subject to shareholder approval at the next annual general meeting.

The group’s full-year contracted pre-sales was approximately 59.59  billion yuan, a 24 per cent dip compared to FY2020. 

Property contracted pre-sales fared slightly better in the second half of the year than in H1 FY2021, as it increased 3.7 per cent half on half.

As at Dec 31, 2021, the group recorded an accumulated contracted pre-sale of 98.22 billion yuan, representing a total gross floor area of approximately 2.9 million sq m, which are pending recognition in the first half of FY2022 and beyond.

Commenting on Yanlord's results, chairman and chief executive officer Zhong Sheng Jian, said: "In 2021, on the premise of maintaining a stable financial position and adequate liquidity, the group together with its joint ventures and associates took measured steps to replenish their land bank, adding a total gross floor area of approximately 1.24 million sq m. From a geographical perspective, the new land parcels comprise sites in key existing markets such as Shanghai, Suzhou and Tianjin; and also marked a maiden's entry into 2 new cities - Wuxi and Yangzhou."

In its outlook, the group said that in line with the stable recovery of the Chinese real estate industry, it will continue to launch new projects for pre-sales in accordance with their delivery schedule with its joint ventures and associates.

It has new projects and new batches of existing projects lined up in China for H1 FY2022, in locations including the Yangtze River Delta, Bohai Rim, Greater Bay Area, Western China, Central China and Hainan. Mentioned assets include Shanghai Jingan Jinyuan South Land Parcels and Yanlord Reverie Park in Shenzhen.

The group added that it 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 pre-sale units to-date, expected delivery schedules and on-schedule construction works in progress, barring any significant deterioration in the global economy and any other unforeseen circumstances like policy fine-tunes in specific cities.

It had in January 2022 logged 9.81 billion yuan in total contracted pre-sales from residential and commercial units, as well as car parks, up 87.7 per cent from the 5.22 billion yuan it recorded a year ago.

Shares of Yanlord closed at S$1.17 on Friday, up 0.9 per cent or S$0.01.

READ MORE:

• Yanlord sells all units at Shanghai Poetic Villa inaugural launch, bags 3.2b yuan in pre-sales
• Yanlord sells all units in pre-sale of Shanghai residential project, nets 5.08b yuan
• Yanlord, Ho Bee to jointly develop Tianjin residential site