The illustration is of happier days . Xinyuan chairman and CEO Yong Zhang at the left looks at a screen as his company’s stock begins trading on the New York Stock Exchange in New York December 13, 2007.
Xinyuan Real Estate is a residential real estate developer with a focus on high growth, strategic Tier II cities in China (still massive by normal standards although not so in China) announced its unaudited financial results for the fourth quarter and full year ended December 31, 2008. Not happy news.
Total revenues decreased $22.2 million to $60.8 million from $83.0 million.
A gross loss of $75.8 million versus a gross profit of $18.4 million, or 21.8% of revenue.
In the fourth quarter, the company recognized estimated future losses of $21.6 million on its Suzhou International City Garden project and additionally recorded an impairment charge on the same project of $72.6 million.
The company recorded a net loss of $77.5 million versus a net profit of $7.8 million.
During the fourth quarter of 2008, the Company completed Anhui Wang iang Garden and Shandong Elegant Scenery projects.
PRNewswire reports that Yong Zhang, Xinyuan’s chairman and chief executive officer said, ‘We remain positive on the long term prospects of the real estate sector in China. With a cash balance of over $193 million at the end of 2008 and expected cash flows from existing projects sufficient to settle all outstanding debt maturities through 2010, we remain confident that Xinyuan can weather the storm and emerge a stronger company when the cycle turns.
‘With respect to our initiatives in 2009, we are focused on pacing the construction efforts of our large projects in Suzhou, Kunshan, and Chengdu (Tier 1.5 cities) to match local demand and to preserve cash.’