SINGAPORE - Chinese developer Yanlord Land Group's third quarter net profit dived by 97 per cent to 8.4 million yuan (S$1.8 million).
Its revenue for the three months to Sept 30 plunged by 72 per cent to 977.2 million yuan, due to the relatively lower gross floor area delivered to buyers.
This was in-line with the group's lower projected delivery schedule and also partly attributable to the tighter credit environment in China and consequently slower disbursement of mortgage loans to our customers.
The lower revenue streams were partly attributable to the lower average selling price due to the change in composition of product mix.
Pretax profit was lower at 132 million yuan compared to 965 million yuan in the year ago period, primarily due to lower revenue stream and higher net foreign exchange loss, partly offset by the fair value gain on investment property.
Pretax profit margin decreased to 13.6 per cent from 27.5 per cent in the previous corresponding period.
Earnings per share shrank to 0.43 fen from 15.74 fen previously while net asset value per share climbed to 9.23 yuan compared to 9.2 yuan as at Dec 31.
Yanlord noted China's central bank has in recent months implemented various credit easing measures including the relaxation of bank reserve ratio requirements as well as easing the eligibility criteria for first-home mortgages.
This allows buyers who have fully repaid mortgages to enjoy lower downpayments and mortgage rates, with first-home status.
These liquidity measures coupled with the expressed statement to local banks to support the reasonable financing needs of developers are expected to further support end-user housing demand and contribute to the sustainable development of China's real estate sector, said Yanlord.
Buyer sentiments were further buoyed by the progressive relaxation of austerity measures introduced by the central government since 2010 to cool the property sector in the various cities, it added.
Yanlord is confident of its 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.