Yanlord Land profit down 99%

It’s a far cry from the 535 million yuan profit for the third quarter in 2010.

Yanlord Land said that as compared to 2010, the Group continued to achieve higher average selling price per square metre on new phases and batches of its existing projects delivered in 2011, namely Yanlord New City Gardens in Zhuhai, Yunjie Riverside Gardens in Shanghai and Yanlord Peninsula (Apartment) in Suzhou.

However, due to the change in composition of product mix, from relatively higher-priced projects in Shanghai and Tianjin in 2010 to these three projects and Yanlord Yangtze Riverbay Town in Nanjing in current periods, overall ASP per sqm decreased in 3Q 2011 and 9M 2011 as compared to respective periods in 2010. Together with decreases in gross floor area delivered to customers in 3Q 2011 and 9M 2011, revenue of the Group declined in current reporting periods.

Cost of sales, which mainly included land, construction and capitalised borrowing costs, declined by RMB1.181 billion in 3Q 2011 and RMB404 million in 9M 2011 as compared to the respective periods in 2010 primarily attributable to lower GFA delivered to customers. Another contributor to the substantial decrease in cost of sales in 3Q 2011 was the change in the composition of product mix, whereby majority of the GFA delivered in 3Q 2011 was from a relatively lower development cost project in Yanlord New City Gardens (Phase 2 – Section 2) in Zhuhai as compared to Yanlord Riverside Plaza (Phase 1) in Tianjin in 3Q 2010.

Meanwhile the effect of the Fair Value Gain on the other operating income in 9M 2011 was partly off-set by a RMB82 million decrease in net foreign exchange gain over the same period in 2010. Instead of a net foreign exchange gain reported in 9M 2010 which was credited as income, the Group recorded a net foreign exchange loss amounting to RMB78 million in 9M 2011 primarily arising from an appreciation of the Company’s US$ denominated senior notes against its S$ functional currency and a depreciation of foreign currency denominated cash and bank balances, and such loss was charged to administrative expenses.