NEW YORK, NY
-- (Marketwired)
-- 11/27/15
China Metro-Rural Holdings Limited (the "Company") (NYSE MKT: CNR) is pleased to announce its unaudited consolidated financial results of the Company and its subsidiaries (collectively the "Group") for the six months ended September 30, 2015.
Major Events:
- Pre-sale in Zhoukou City, Henan Province of the PRC
Following the completion and sale of certain trade centers from the first phase of our project located in Zhoukou City (the "Zhoukou Project") during the last fiscal year, the Group has commenced the pre-sale of certain trade centers with total gross floor area of approximately 141,000 square meters in October 2015. These pre-sales are expected to be completed and the corresponding trade centers are expected to be delivered within the next six to twelve months from September 30, 2015.
- Pre-sale in Hengyang City, Hunan Province of the PRC
During the period, the Group has commenced the pre-sale of certain trade centers from our project located in Hengyang City (the "Hengyang Project") with total gross floor area of approximately 353,000 square meters. The first phase construction of the Hengyang Project consists of total gross floor area of approximately 504,000 square meters. As of September 30, 2015, the Group has successfully pre-sold gross floor area of approximately 97,000 square meters for the Hengyang Project. These pre-sales of the corresponding trade centers are expected to be completed and delivered within the next six to twelve months from September 30, 2015.
Financial Highlights:
The Group has two reportable operating segments, agricultural logistics business and rural-urban migration and city re-development business. Our agricultural logistics business is comprised of (1) development, sales and leasing properties of integrated agricultural logistics and trade centers and supporting facilities and (2) property management which engages in the management of developed properties within the logistics platforms. Our rural-urban migration and city re-development business is comprised of (1) servicing and assignments of development rights and (2) development and sales of residential, commercial and other auxiliary properties in new city center districts.
Agricultural Logistics Business
- Net revenue generated by the Group decreased from HK$43,405,000 for the six months ended September 30, 2014 to HK$17,306,000 for the six months ended September 30, 2015, representing a year-over-year decrease of 60.1%. The decrease was primarily due to lack of newly completed properties held for sale as they are still under construction during the current period.
- Sales of gross floor area decreased from 10,025 square meters for the six months ended September 30, 2014 to 2,131 square meters for the six months ended September 30, 2015, representing a year-over-year decrease of 78.7%.
- Gross profit percentage decreased from 41.3% for the six months ended September 30, 2014 to 22.8% for the six months ended September 30, 2015.
- Other income and other gains/(losses), net were approximately HK$8,829,000 for the six months ended September 30, 2014. Other income and other gains/(losses), net were approximately HK$3,435,000 net loss for the six months ended September 30, 2015. Included in other income and gains/(losses), net, was mainly a government subsidy of HK$9,744,000 for the six months ended September 30, 2014 while there was no government subsidy for the six months ended September 30, 2015 and the loss in fair values of leasehold land and buildings of HK$4,033,000 for the six months ended September 30, 2015.
- Selling expenses decreased from HK$6,466,000 for the six months ended September 30, 2014 to HK$4,504,000 for the six months ended September 30, 2015, representing a year-over-year decrease of 69.7%. The decrease was mainly due to the decrease in advertising activities as the Group is yet to launch its sales campaign for its properties that are still under construction during the current period.
- Administrative expenses increased from HK$37,014,000 for the six months ended September 30, 2014 to HK$43,242,000 for the six months ended September 30, 2015, representing a year-over-year increase of 16.8%. The increase was mainly attributable to the increase in impairment of trade and other receivables of HK$3,817,000.
- Finance income decreased from HK$6,900,000 for the six months ended September 30, 2014 to HK$88,000 for the six months ended September 30, 2015, representing a year-over-year decrease of 98.7%. Included in finance income in the six months ended September 30, 2014 was mainly an interest income on other receivables of HK$6,601,000.
- Income tax expenses decreased from HK$26,323,000 for the six months ended September 30, 2014 to income tax credit of HK$884,000 for the six months ended September 30, 2015, representing a year-over-year decrease of 103%. The effective tax rate decrease from 145.0% for the six months ended September 30, 2014 to -1.67% for the six months ended September 30, 2015. The income tax expenses for the six months ended September 30, 2014 included an additional PRC land appreciation tax of approximately HK$28,314,000 arising from our project in Dezhou City. The additional provision arose from the land appreciation tax clearance procedures conducted by the local tax bureau during the six months ended September 30, 2014. During this process, the local tax bureau took a different interpretation of the taxability and deductibility of certain items from that previously adopted by the Group, thus giving rise to this additional tax.
- Net loss attributable to the equity holders of the Company was HK$40,315,000 for the six months ended September 30, 2014. Net loss attributable to equity holders of the Company was HK$50,667,000 for the six months ended September 30, 2015.
Rural-Urban Migration and City Re-Development Business
- There was no revenue generated by the Group for the six months ended September 30, 2014 while net revenue generated by the Group was HK$43,910,000 for the six months ended September 30, 2015. The increase in sales was primarily due to the completion of a project at China Glorious City - Zhoukou.
- Sales of gross floor area were 5,343 square meters for the six months ended September 30, 2015.
- Gross profit percentage for the six months ended September 30, 2015 was 55.5%.
- Other income and other gains/(losses), net were approximately HK$1,289,000 for the six months ended September 30, 2014. Other income and other gains/(losses), net were approximately HK$25,822,000 for the six months ended September 30, 2015. Included in other income and other gains/(losses), net, was mainly a government subsidy of HK$23,795,000 (2014: Nil) for the six months ended September 30, 2015.
- Selling expenses increased from HK$6,326,000 for the six months ended September 30, 2014 to HK$26,874,000 for the six months ended September 30, 2015, representing a year-over-year increase of 324.8%. The increase was mainly due to the increase in advertising, promotion and related expenses as a result of pre-sale campaigns in China Glorious City - Zhoukou and China Glorious City - Hengyang.
- Administrative expenses increased from HK$9,862,000 for the six months ended September 30, 2014 to HK$33,583,000 for the six months ended September 30, 2015, representing a year-over-year increase of 241.0%. The increase was mainly due to the increase in headcount as a result of expansion of operations.
- Finance income increased from HK$263,000 for the six months ended September 30, 2014 to HK$477,000 for the six months ended September 30, 2015, representing a year-over-year increase of 81.0%.
- Income tax expenses increased from income tax credit of HK$3,585,000 for the six months ended September 30, 2014 to income tax expenses of HK$5,123,000 for the six months ended September 30, 2015, representing a year-over-year decrease of 242.9%. The effective tax rate decrease from negative 24.5% for the six months ended September 30, 2014 to negative 20.5% for the six months ended September 30, 2015.
- Net loss attributable to the equity holders of the Company was HK$11,050,000 for the six months ended September 30, 2014. Net loss attributable to equity holders of the Company was HK$14,923,000 for the six months ended September 30, 2015.
Corporate
- Other income and gains, net were approximately HK$71,407,000 for the six months ended September 30, 2014. Other income and other gains/(losses), net were approximately HK$71,775,000 for the six months ended September 30, 2015. Included in other income and other gains/(losses), net was a gain of HK$67,944,000 (2014: HK$71,660,000) mainly arising from fair value changes of derivative components of convertible bonds and warrants.
- Administrative expenses decreased from HK$6,566,000 for the six months ended September 30, 2014 to HK$5,934,000 for the six months ended September 30, 2015, representing a year-over-year decrease of 9.6%.
ABOUT CHINA METRO-RURAL HOLDINGS LIMITED
China Metro-Rural Holdings Limited is a leading agricultural logistics platform development and rural-urban migration redevelopment company in China.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are, by their nature, subject to risks and uncertainties. This Act provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements, including statements regarding industry prospects and future results of operations or financial position, made in this press release are forward looking.
Words such as "anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would" and similar expressions may identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to: the Company's future performance, the Company's expansion efforts, the state of economic conditions, the Company's market and the governmental policy. These forward-looking statements are based on assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors the Company believes to be appropriate in particular circumstances. However, whether actual results and developments will meet the Company's expectations and predictions depends on a number of known and unknown risks and uncertainties and other factors, any or all of which could cause actual results, performance or achievements to differ materially from the Company's expectations, whether expressed or implied by such forward-looking statements.
CHINA METRO-RURAL HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED SEPTEMBER 30
2015 2015 2014
US$'000 HK$'000 HK$'000
(Unaudited) (Unaudited) (Unaudited)
(Note 2)
Revenue 7,848 61,216 43,405
Cost of sales (4,219) (32,909) (25,467)
------------ ------------ ------------
Gross profit 3,629 28,307 17,938
Other income, net 3,156 24,614 10,157
Other gains, net 8,916 69,548 71,369
Selling expenses (4,023) (31,378) (12,792)
Administrative expenses (10,610) (82,759) (53,442)
------------ ------------ ------------
Operating profit 1,068 8,332 33,230
Finance income 72 565 7,198
Finance costs (404) (3,148) (2,519)
------------ ------------ ------------
Finance (cost)/income, net (332) (2,583) 4,679
Share of losses of an associate (342) (2,673) (5,865)
------------ ------------ ------------
Profit before income tax 394 3,076 32,044
Income tax expenses (543) (4,239) (22,738)
------------ ------------ ------------
(Loss)/profit for the period (149) (1,163) 9,306
============ ============ ============
Attributable to:
Equity holders of the Company 33 253 13,477
Non-controlling interests (182) (1,416) (4,171)
------------ ------------ ------------
(149) (1,163) 9,306
============ ============ ============
(Loss)/profit per share
attributable to equity holders of
the Company during the period
Basic profit per share US$ 0.00 HK$ 0.00 HK$ 0.18
============ ============ ============
Diluted loss per share US$ (0.05) HK$ (0.36) HK$ (0.33)
============ ============ ============
The accompanying notes are an integral part of this press release.
CHINA METRO-RURAL HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30
2015 2015 2014
US$'000 HK$'000 HK$'000
(Unaudited) (Unaudited) (Unaudited)
(Note 2)
(Loss)/profit for the period (149) (1,163) 9,306
Other comprehensive income, net of
tax:
Items that may be reclassified to
income statement
Exchange difference on
translation of foreign
operations (11,854) (92,464) 4,440
------------ ------------ ------------
Total comprehensive (loss)/income
for the period (12,003) (93,627) 13,746
============ ============ ============
Total comprehensive (loss)/income
for the period attributable to:
Equity holders of the Company (11,375) (88,727) 17,737
Non-controlling interests (628) (4,900) (3,991)
------------ ------------ ------------
(12,003) (93,627) 13,746
============ ============ ============
The accompanying notes are an integral part of this press release.
CHINA METRO-RURAL HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
September 30, March 31,
2015 2015 2015
US$'000 HK$'000 HK$'000
(Unaudited) (Unaudited) (Unaudited)
(Note 2)
Non-current assets
Investment properties 77,805 606,882 633,544
Property, plant and equipment 35,974 280,598 312,560
Land use rights 6,956 54,258 57,489
Deposit for investment properties 1,559 12,160 12,694
Goodwill 118 919 919
Deposit for acquisition of land
use rights 15,839 123,541 128,968
Interest in an associate 1,121 8,741 11,840
Interest in a joint venture 917 7,152 7,466
Deferred income tax assets 2,635 20,553 9,777
------------ ------------ ------------
142,924 1,114,804 1,175,257
------------ ------------ ------------
Current assets
Completed properties held for
sale 65,817 513,369 561,278
Properties under development 415,115 3,237,897 2,708,802
Land use rights 52,532 409,750 215,084
Deposit for acquisition of land
use rights - - 201,417
Trade and other receivables 19,937 155,509 515,512
Restricted and pledged bank
deposits 5,960 46,483 150,640
Cash and cash equivalents 80,179 625,398 402,675
------------ ------------ ------------
639,540 4,988,406 4,755,408
------------ ------------ ------------
Current liabilities
Trade payables, other payables
and accruals 193,039 1,505,697 1,679,179
Receipt in advance 92,120 718,537 63,618
Current income tax liabilities 64,391 502,247 551,600
Derivative financial liabilities 23,373 182,313 250,257
Bank and other borrowings 103,634 808,346 621,695
Convertible bonds 25,155 196,206 607,482
Loans from a shareholder 8,333 65,000 -
------------ ------------ ------------
510,045 3,978,346 3,773,831
------------ ------------ ------------
Net current assets 129,495 1,010,060 981,577
------------ ------------ ------------
Total assets less current
liabilities 272,419 2,124,864 2,156,834
------------ ------------ ------------
Non-current liabilities
Deferred income tax liabilities 11,740 91,569 95,592
Bank and other borrowings 11,224 87,549 528,059
Convertible bonds 60,409 471,190 -
Loans from a shareholder 12,821 100,000 65,000
Loan from a non-controlling
interest of a subsidiary 7,538 58,800 58,800
------------ ------------ ------------
103,732 809,108 747,451
------------ ------------ ------------
Net assets 168,687 1,315,756 1,409,383
============ ============ ============
Equity
Equity attributable to equity
holders of the Company
Share capital 73 573 573
Reserves 165,789 1,293,149 1,381,877
------------ ------------ ------------
165,862 1,293,722 1,382,450
Non-controlling interests 2,825 22,034 26,933
------------ ------------ ------------
Total equity 168,687 1,315,756 1,409,383
============ ============ ============
The accompanying notes are an integral part of this press release.
CHINA METRO-RURAL HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30
2015 2015 2014
US$'000 HK$'000 HK$'000
(Unaudited) (Unaudited) (Unaudited)
(Note 2)
Net cash generated from/(used
in) operating activities 33,713 262,959 (95,004)
------------ ------------ ------------
Net cash used in investing
activities (48) (380) (73,857)
------------ ------------ ------------
Net cash (used in)/generated
from financing activities (1,673) (13,055) 155,675
------------ ------------ ------------
Net increase/(decrease) in cash
and cash equivalents 31,992 249,524 (13,186)
Cash and cash equivalents at
beginning of the period 51,625 402,675 146,192
Effect of foreign exchange rate
changes (3,436) (26,801) 403
------------ ------------ ------------
Cash and cash equivalents at end
of the period 80,181 625,398 133,409
============ ============ ============
The accompanying notes are an integral part of this press release.
CHINA METRO-RURAL HOLDINGS LIMITED
NOTES TO UNAUDITED FINANCIAL INFORMATION
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The financial information presented herein have not been audited by an independent registered public accounting firm, but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of financial information. However, this information is not necessarily indicative of results of any other interim period or for the full fiscal year. The accounting policies and basis of preparation adopted in the preparation of the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of financial positions and condensed consolidated statement of cash flows (collectively the "Condensed Statements") are consistent with those used in the annual financial statements of the Group for the fiscal year ended March 31, 2015.
2. US DOLLAR EQUIVALENTS
The US dollar equivalents of the figures shown in the Condensed Statements are supplementary information and have been translated at HK$7.8 to US$1.0, representing the rate on September 30, 2015 for U.S. dollar in New York for cable transfers in Hong Kong dollars as certified for custom purposes by the Federal Reserve Bank of New York. Such translation should not be construed as representations that the Hong Kong dollar amounts represent, or have been or could be converted into, US dollar at that or any other rate.
CONTACT:
China Metro-Rural Holdings Limited
Investor Relations Department
Phone: (852) 2111 3815
E-mail: Email Contact
www.chinametrorural.com
www.nlc88.com
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