NAM TAI PROPERTY INC. SHENZHEN, China, July 31, 2017 /PRNewswire/ -- Nam Tai Property Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTP) today announced its unaudited results for the second quarter ended June 30, 2017.
KEY HIGHLIGHTS
(In thousands of US dollars, except per share data, percentages and as otherwise stated)
Quarterly Results Half year Results
----------------- -----------------
Q2 2017 Q2 2016 YoY(%)(d) 1H 2017 1H 2016 YoY(%)(d)
------- ------- --------- ------- ------- ---------
Operation income $541 $637 (15) $1,135 $1,291 (12)
Net operation income $541 $347 56 $1,135 $551 106
% of operation income 100% 54.5% 100% 42.7%
Operating loss $(2,337) $(1,506) - $(3,727) $(3,525) -
% of operation income (432.0)% (236.4)% (328.4)% (273.0)%
per share (diluted) $(0.06) $(0.04) - $(0.10) $(0.10) -
Net income (loss) (a) (b) $2,085 $(2,643) - $3,899 $(2,984) -
% of operation income 385.4% (414.9)% 343.5% (231.1)%
Basic income (loss) per share $0.06 $(0.07) - $0.11 $(0.08) -
Diluted income (loss) per share $0.06 $(0.07) - $0.10 $(0.08) -
Weighted average number of shares ('000)
Basic 36,575 36,700 36,518 36,700
Diluted 37,210 36,700 37,138 36,700
Notes:
(a) Net income for the three months ended June 30, 2017 mainly included exchange gain of $2.7 million as a result of the appreciation of Renminbi against US dollars in Q2 2017, interest income of $1.8 million earned from time deposits and net operation income $0.5 million, but partly offset by general and administrative expenses of $2.9 million.
(b) Net income for the six months ended June 30, 2017 mainly included interest income of $4.3 million earned from time deposits, exchange gain of $3.5 million as a result of the appreciation of Renminbi against US dollars during the six months ended June 30, 2017 and net operation income $1.1 million, but partly offset by general and administrative
expenses of $4.9 million.
(c) Capitalization on project investment was $3.5 million for Q2 2017, totaling $4.9 million for the first half of year 2017 and our accumulated project investment was $43.6 million up to June 30, 2017, which was recorded under the account of real estate properties under development in the balance sheet as at June 30, 2017.
(d) Percentage change is not applicable if either of the two periods contains a loss.
(e) This information has been published on the Company's website http://www.namtai.com/investors#investors/quarterly_earnings under the quarterly earnings report of Q2 2017 on page 7, Condensed Consolidated Statements of Comprehensive Income.
(f) Attached please find the unaudited financial results cut off July 28, 2017 for additional reference.
SUPPLEMENTARY INFORMATION (UNAUDITED) IN THE SECOND QUARTER OF 2017
Key Highlights of Financial Position
As at As at December
31, As at
June 30, June 30,
2017 2016 2016
---- ---- ----
Cash, cash equivalents and short
term $170.7 million(a) $184.2 million $199.7million
investments
Ratio of cash(b) to current
liabilities 16.34 14.79 52.60
Current ratio 18.56 16.63 58.69
Ratio of total assets to total
liabilities 24.39 19.98 69.31
Return on equity 3.2% (3.8)% (2.3)%
Ratio of total liabilities to
total equity 0.04 0.05 0.01
Notes:
(a) As compared with December 31, 2016, the decrease of $13.5 million in the cash, cash equivalents and short term investments was mainly due to the payments of $13.4 million for new
office premises and $3.0 million being made for land development project and accordingly was recorded under the account of real estate properties under development in the balance sheet as
at June 30, 2017, partly offset by the exchange gain of $3.2 million as a result of the appreciation of Renminbi against US dollars during the six months ended June 30, 2017.
(b) Cash in the financial ratio included cash, cash equivalents and short term investments in the amount of $170.7 million, $184.2 million and $199.7 million as at June 30, 2017,
December 31, 2016 and June 30, 2016 respectively. As compared with June 30, 2016, the decrease of $29.0 million in the cash, cash equivalents and short term investments was mainly due to
the payments of $13.4 million for new office premises, $6.6 million for dividend payment, $5.3 million being made for land development project and accordingly was recorded under the account
of real estate properties under development in the balance sheet as at June 30, 2017, and the exchange loss of $0.8 million as a result of the depreciation of Renminbi against US dollars
from June 30, 2016 to June 30, 2017.
OPERATING RESULTS
Operation income for the second quarter of 2017 and the same quarter of last year were mainly derived from properties and lands located in Shenzhen. Operating loss for the second quarter of 2017 was $2.3 million, an increase of $0.8 million, compared to operating loss of $1.5 million in the second quarter of 2016.
Net income for the second quarter of 2017 was $2.1 million mainly represented exchange gain of $2.7 million as a result of the appreciation of Renminbi against US dollars in the second quarter of 2017, interest income of $1.8 million earned from time deposits and net operation income of $0.5 million, but partly offset by general and administrative expenses of $2.9 million, or income of $0.06 per diluted share. Compared to the financial results for the same period in 2016, the net loss then of $2.6 million mainly represented exchange loss of $2.3 million as a result of the depreciation of Renminbi against US dollars in Q2 of 2016 and general and administrative expenses of $1.9 million, but partly offset by the interest income of $1.3 million earned from time deposits and net operation income of $0.3 million, or a loss of $0.07 per diluted share.
Net income for the six months ended June 30, 2017 was $3.9 million mainly represented interest income of $4.3 million earned from time deposits, exchange gain of $3.5 million as a result of the appreciation of Renminbi against US dollars during the six months ended June 30, 2017 and net operation income of $1.1 million, but partly offset by general and administrative expenses of $4.9 million, or income of $0.10 per diluted share. Compared to the financial results for the same period in 2016, the net loss then of $3.0 million mainly represented general and administrative expenses of $4.1 million and exchange loss of $2.3 million as a result of the depreciation of Renminbi against US dollars during the six months ended June 30, 2016, but partly offset by the interest income of $2.9 million earned from time deposits and net operation income of $0.6 million, or a loss of $0.08 per diluted share.
As the majority of our assets are denominated in Renminbi, the translation of Renminbi denominated assets to US dollars for reporting purposes has resulted in foreign exchange gain for the six months ended June 30, 2017. Due to the fluctuation of exchange rate for Renminbi against the US dollar, foreign exchange gain for the six months ended June 30, 2017 was $3.5 million, or approximately 91% of the amount of our net income for this period. However, since the majority of our payment obligations are also denominated in Renminbi, we do not expect the movement of Renminbi against the US dollar to materially and adversely impact our business.
Capitalization on project investment was $3.5 million for Q2 2017, totaling $4.9 million for the first half of year 2017 and our accumulated project investment was $43.6 million up to June 30, 2017, which was recorded under the account of real estate properties under development in the balance sheet as at June 30, 2017.
Our business of land development is currently in the preparatory stage where it takes time to apply for the relevant licenses and permits from the PRC government. During this preparatory stage of the land development, our only sources of income are from limited deposit interest and rental income; therefore, we expect to continue to incur losses during this stage.
Please see page 7 of the Company's Condensed Consolidated Statements of Comprehensive Income for further details. This information has also been published on the Company's website at http://www.namtai.com/investors#investors/quarterly_earnings in the quarterly earnings report of Q2 2017 on page 7, Condensed Consolidated Statements of Comprehensive Income.
COMPANY OUTLOOK
With respect to the development of "Inno Park" and "Inno City" in Shenzhen, the construction permit application processes have been proceeding smoothly and every related step is on schedule and within the Company's expectations.
As part of our preparation for the development of "Inno Park", the Company is pleased to report that after our internal team has been working closely with the external project management company (WSP), quantity surveyor (Currie & Brown) and architectural design firm (Ronald Lu and Partners) on the construction drawing design and the tender for the general construction contractor, the main construction contractor will be selected in the second half of this year and commence work in the beginning of 2018. Since the construction work for the basement area started ahead of schedule, we held a groundbreaking ceremony for the construction of the basement area on May 5, 2017.
As part of our preparation for the development of "Inno City", the PRC Government has verbally agreed and approved the construction of Phase I and II of "Inno City" to be combined together as one single project and the Company is currently waiting for the official approval from the PRC Government. This could significantly lower the costs and shorten the time of the construction. The Company is currently negotiating and finalizing its agreements with the selected architectural design firm, the project management company and quantity surveyor. They are expected to be engaged and commence work in the second half of this year. As the Inno City Project may commence ahead of schedule upon the receipt of the approval to combine the two phases, the Company plans to demolish all the old factory buildings between October to December 2017. The Company has also purchased new office premises for a total amount of $13.5 million in April 2017. The Company will move its headquarters to this new location and demolish the existing headquarters in the first half of 2018.
Our Chairman, Mr. M.K. Koo ("Mr. Koo"), announced on July 12, 2017 that he has entered into a share purchase agreement to dispose all of his shareholdings in the Company to Kaisa Group Holdings Ltd. (1638:Hong Kong) ("Kaisa"), a real estate developer listed on The Stock Exchange of Hong Kong Limited. The closing of which is scheduled no later than August 11, 2017, and subject to Kaisa's satisfaction of due diligence review and other customary closing conditions. Consistent with the Company's previously announced strategic plan to identify a strategic partner that can assist the Company in its various development projects, the Company is now pleased to introduce Kaisa, after a three year search, as the best candidate identified to become an investor and potential strategic partner.
Part I: Summary of gross floor areas for the two projects:
Inno Park Inno City
Shenzhen, Guangming Shenzhen, Gushu
(Approved) (Planned)
--------- --------
(In square meters, except plot ratios)
Land area 103,739 52,625
Plot ratios 2.59 6.00
Office 175,406 Office + Soho 187,880
Apartment 61,000 Apartment 48,300
Gross floor area
(GFA) Commercial 28,594 Commercial 25,000
Other 4,159 Other 7,200
----- -----
269,159 268,380
------- -------
Underground
floor area 62,673 80,000
------ ------
Total
construction
floor area
(CFA) 331,832 348,380
======= =======
Remark The above figures are subject to adjustment upon the
final approval of the relevant authorities in
China.
Part II: Timetable for the two projects:
Main Certificates Estimated Completion Time
----------------- -------------------------
Inno Park Inno City 2017 2018 2019 2020 2021
--------- --------- ---- ---- ---- ---- ----
A Land Use Permit Obtained Jun 4, 2015 Mar. 2018
*
B Land Certificate Obtained Sep 21, 2015 Jun. 2018 *
C Planning Permit for Construction Engineering Aug. 2017 Jul. 2018
# *
D D1 Early Construction Permit for Pile Foundation May. 2017 ---
#
D2 Construction Permit for Project Nov. 2017 Nov. 2018
# *
D3 Main Construction Acceptance May. 2019 Sep. 2020
# *
D4 Completion Time Sep. 2019 Jan. 2021 *
#
E Real Estate Certificate Mar. 2020 Jul. 2021
# *
Remark 1. Number signs # represent "Inno Park", while stars * are for "Inno City".
2. The construction of "Inno Park" has commenced from April 2017.
3. The construction of "Inno City" is expected to commence before December 2018.
Part III: Budgetary Estimate for the two projects:
Total Cost Inno Park Inno City
---------- --------- ---------
(In millions of US
dollars)
Construction Cost $312 $415
Operation Cost 69 43
--- ---
Total $381 $458
==== ====
The $839 million Schematic
Design Estimation was
prepared by our quantity
surveyor, Currie & Brown,
based on a schematic design
originally prepared by our
architectural design firm.
This estimate will be used
by us for cost control
purposes to monitor the
costs of design,
construction, and other
Remark operations.
This estimation does not
include the costs of
marketing and interior
furnishing. If the developed
properties are offered for
sale, the costs would also
have to include payment for
land appreciation tax.
As for our Wuxi plant, the factory building continues to be listed for sale and we still expect it to be sold sometime within 2017. An auction is under preparation and we are currently looking for potential buyers. This auction is scheduled to complete in September 2017.
Potential Risks in our business
We currently derive a majority of our income from rental and interest income but please note that our rental income will cease after October 2017. Since 2016, we have seen a stabilizing trend on the benchmark interest rates in China. However, due to the current economic conditions in China, we expect the People's Bank of China ("PBOC") to keep Renminbi-denominated official time deposit interest rates in China at a low level throughout 2017. With this lower interest rate and rental income, we expect to continue to incur operating losses in 2017 and beyond.
We have only become a real estate developer, after our electronic manufacturing businesses ceased in 2014. To ensure our successful transformation, we have engaged external advisors and sought potential strategic partners and investors to support our projects. We cannot assure you our efforts are sufficient in carrying out a transformation of this magnitude. Our Chairman, Mr. Koo, is 74 years old. Mr. Koo has begun his transition towards retirement in anticipation of age and health issues. We cannot assure you that our transition planning can be carried out smoothly, or that any successor will be able to manage our Company as effectively.
As the majority of our assets are denominated in Renminbi, the translation of Renminbi-denominated assets to US dollars for our reporting purposes has resulted in foreign exchange gain in this quarter. As such, we do expect to see fluctuations in the reporting of foreign exchange loss/gain in the financial statements due to the movement of Renminbi against the US dollar. Nevertheless, as a majority of our payments are in Renminbi, we also do not expect the movement of Renminbi against the US dollar to adversely impact our business.
In order for the projects to proceed smoothly and start ahead of the schedule, it is necessary for the Company to negotiate with banks for the implementation of funds needed to assist in future development of the projects.
As of end of June, 2017, we have a total cash balance of $170.7 million and no debt. With our current cash position, we believe our finances remain healthy to fund the initial stages of these property development projects within the coming year and half. All of our land development related applications are subject to government policies and regulations in the real estate market. As this is our first venture into the land development projects after the cessation of our LCM business, we may encounter industry-specific difficulties that result in losses as we progress with our projects in Shenzhen. As we are currently in the planning stage of our property projects, and can only generate limited income from deposit interest income and rental income, we will continue to record operating losses. Cash on hand is expected to drop continuously, but most of the incurred expenses related to construction will be for project development, which will be capitalized as real estate properties under development (non-current asset) on our balance sheet. For more information on risks in our business, please refer to the Risk Factors section of our 2016 Annual Report on Form 20-F as filed with the SEC and on our website.
According to our project development plan, project investment for Q3 2017 is estimated to be $11.0 million, and project investment for the year of 2017 is estimated to be $60 million.
The information contained in or that can be accessed through the website mentioned in this announcement does not form part of this announcement.
PAYMENT OF QUARTERLY DIVIDENDS FOR 2016 AND 2017
As announced on December 12, 2016, the Company set the payment schedule of quarterly dividends for 2017. The dividend for Q3 2017 was paid on July 20, 2017.
The following table updates the previously announced schedule for declaration and payment of quarterly dividends in 2017.
Payment Record Date Payment Date Dividend Status
(per
share)
--- -------
Q1 2017 December 31, 2016 January 20, 2017 $0.07 Paid
Q2 2017 March 31, 2017 April 20, 2017 $0.07 Paid
Q3 2017 June 30, 2017 July 20, 2017 $0.07 Paid
Q4 2017 September 30, 2017 October 20, 2017 $0.07
-----
Full Year 2017 $0.28
=====
The Company's decision to continue making dividend payments in 2017 as set out and confirmed in the above table does not necessarily mean that cash dividend payments will continue thereafter or at the same amount. Whether future dividends after 2017 are to be declared will depend upon Company's future growth and earnings at each relevant period, of which there can be no assurance, and the Company's cash flow needs for business operations and transformation. Accordingly, there can be no assurance that cash dividends on the Company's common shares will be declared beyond those declared for 2017, and we also cannot assure you what the amounts of such dividends will be or whether such dividends, once declared for a specific period, will continue for any future period, or at all.
PROPOSED SCHEDULE OF RELEASE OF QUARTERLY FINANCIAL RESULTS FOR 2017
To maintain the efficiency of delivering the Company's quarterly financial results to the market, the Company's management has decided to follow approximately the same schedule of 2016 to release the quarterly financial results for 2017. Details of the expected quarterly release dates are as follows:
Announcements of Financial Results
Quarter Date of release
------- ---------------
Q1 2017 May 2, 2017 (Tuesday)
Q2 2017 July 31, 2017 (Monday)
Q3 2017 October 30, 2017 (Monday)
Q4 2017 January 29, 2018 (Monday)
FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE TO DECLINE
Certain statements included in this press release, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "plan", "seek" or "believe". These forward-looking statements, which are subject to risks, uncertainties, and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations about future events. There are important factors that could cause our actual results, level of activity, performance, or achievements to differ materially from the results, level of activities, performance, or achievements expressed or implied by the forward-looking statements, including, but not limited to, delay in the Company's ability to obtain all requisite permits and approvals from relevant government authorities in relation to the redevelopment of two parcels of properties in Guangming, Shenzhen, and Gushu, Shenzhen, respectively, and the successful redevelopment of the two parcels of properties into Nam Tai Inno Park and Nam Tai Inno City; the sufficiency of the Company's cash position and other sources of liquidity to fund its property developments; continued inflation and appreciation of the Renminbi against the US dollar; rising labor costs in China and changes in the labor supply and labor relations. In particular, you should consider the risks outlined under the heading "Risk Factors" in our most recent Annual Report on Form 20-F and in our Current Report filed from time to time on Form 6-K. The Company's decision to continue dividend payments in 2017 does not necessarily mean that dividend payments will continue thereafter. Whether future dividends will be declared depends upon the Company's future growth and earnings, of which there can be no assurance, as well as the Company's cash flow needs for further expansion. Accordingly, there can be no assurance that cash dividends on the Company's common shares will be declared beyond those declared for 2017, what amount those dividends may be or whether such dividends, once declared for a specific period, will continue for any future period, or at all; and whether we will purchase any of our shares in the open markets or otherwise. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements apply only as of the date of this press release; as such, they should not be unduly relied upon as circumstances change. Except as required by law, we are not obligated, and we undertake no obligation, to release publicly any revisions to these forward-looking statements that might reflect events or circumstance occurring after the date of this release or those that might reflect the occurrence of unanticipated events.
ABOUT NAM TAI PROPERTY INC.
We are a real estate developer. We hold two parcels of land located in Guangming and Gushu, Shenzhen, China. We are converting these two parcels of land that formerly housed the manufacturing facilities of our prior businesses into high-tech research and development centers, Nam Tai Inno Park and Nam Tai Inno City. We expect our principal income in the future will be derived from rental income from these research and development centers. Nam Tai Property Inc. is a corporation registered in the British Virgin Islands and listed on the New York Stock Exchange (Symbol: "NTP").
NAM TAI PROPERTY INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE PERIODS ENDED JUNE 30, 2017 AND 2016
(In Thousands of US dollars except share and per share data)
-----------------------------------------------------------
Unaudited Unaudited
Three months ended June 30, Six months ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
Operation income (1) $541 $637 $1,135 $1,291
Operation expense - 290 - 740
--- --- --- ---
Net operation income 541 347 1,135 551
Costs and expenses
General and administrative expenses 2,878 1,853 4,862 4,076
----- ----- ----- -----
2,878 1,853 4,862 4,076
Operating loss (2,337) (1,506) (3,727) (3,525)
Other income (expenses), net (2) 2,574 (2,432) 3,302 (2,349)
Interest income 1,848 1,295 4,324 2,890
Income (loss) before income tax 2,085 (2,643) 3,899 (2,984)
----- ------ ----- ------
Consolidated net income (loss) 2,085 (2,643) 3,899 (2,984)
Other comprehensive income - - - -
--- --- --- ---
Consolidated comprehensive income (loss) (3) $2,085 $(2,643) $3,899 $(2,984)
====== ======= ====== =======
Earnings (loss) per share
Basic $0.06 $(0.07) $0.11 $(0.08)
Diluted $0.06 $(0.07) $0.10 $(0.08)
Weighted average number of share ('000)
Basic 36,575 36,700 36,518 36,700
Diluted 37,210 36,700 37,138 36,700
Notes:
(1) The property at phase 2 in Gushu has been rented to a third party lessee with a term of three and a half years since May 2014.
(2) Other income (expenses), net, included exchange gain of $2.7 million, partly offset by loss from Wuxi operations of $0.1 million for the three months ended June 30, 2017.
(3) Consolidated comprehensive income for the three months ended June 30, 2017 mainly included exchange gain of $2.7 million as a result of the appreciation of Renminbi against US dollar in the second quarter of 2017, interest income of $1.8 million earned from
time deposits and net operation income of $0.5 million, partly offset by general and administrative expenses of $2.9 million.
NAM TAI PROPERTY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2017 AND DECEMBER 31, 2016
(In Thousands of US dollars)
---------------------------
Unaudited Audited
June 30, December 31,
2017 2016
---- ----
ASSETS
Current assets:
Cash and cash equivalents(1) $115,985 $94,558
Short term investments(1) 54,711 89,624
Prepaid expenses and other receivables 3,775 4,034
Assets held for sale 19,419 18,970
------ ------
Total current assets 193,890 207,186
------- -------
Real estate properties under development,
net(2) 43,606 37,779
Property, plant and equipment, net 17,099 3,735
Other assets 104 101
--- ---
Total assets $254,699 $248,801
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,443 $845
Accrued expenses and other payables 2,877 1,405
Dividend payable 5,124 10,205
----- ------
Total current liabilities 10,444 12,455
------ ------
EQUITY
Shareholders' equity:
Common shares 366 364
Additional paid-in capital 243,220 241,536
Retained earnings 10,479 6,607
Accumulated other comprehensive loss(3) (9,810) (12,161)
------ -------
Total shareholders' equity 244,255 236,346
------- -------
Total liabilities and shareholders' equity $254,699 $248,801
-------- --------
Note:
(1) According to the definition of "Balance Sheet" under the Financial Accounting Standard Board ("FASB") Accounting Standards Codification
("ASC") 210-10-20, cash equivalents are short-term, highly liquid investments that are readily convertible to cash. Only investments
with original maturities of three months or less when purchased qualify under that definition. Therefore, the fixed deposits maturing over
three months in amount of $54.7 million and $89.6 million as at June 30, 2017 and December 31, 2016, respectively, are not classified as
cash and cash equivalents but are separately disclosed as short term investments in the balance sheet.
(2) Capitalization on project investment was $3.5 million for Q2 2017, totaling $4.9 million for the first half of year and our accumulated
project investment was $43.6 million up to June 30, 2017.
(3) Accumulated other comprehensive loss represented foreign currency translation adjustment.
NAM TAI PROPERTY INC.
CONSENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30, 2017 AND 2016
(In Thousands of US dollars)
---------------------------
Unaudited Unaudited
Three months ended June 30, Six months ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income (loss) $2,085 $(2,643) $3,899 $(2,984)
Adjustments to reconcile consolidated net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment, 83 665 159 1,669
land use rights and other assets
Gain on disposal of property, plant and equipment (22) (7) (41) (7)
Share-based compensation expenses 363 266 603 266
Unrealized exchange (gain) loss (2,029) 1,373 (2,250) 1,373
Changes in current assets and liabilities:
Decrease in prepaid expenses and other receivables 515 376 273 145
(Decrease) increase in accounts payable - (427) - 287
Increase (decrease) in accrued expenses and other payables 1,159 (458) 1,435 (1,183)
----- ---- ----- ------
Total adjustments 69 1,788 179 2,550
--- ----- --- -----
Net cash provided by (used in) operating activities $2,154 $(855) $4,078 $(434)
------ ----- ------ -----
CASH FLOWS FROM INVESTING ACTIVITIES
Payment of real estate properties under development $(1,566) $(2,208) $(2,971) $(3,255)
Purchase of property, plant & equipment (13) (364) (129) (416)
(Increase) decrease in deposits for real estate properties under (186) (200) (166) 276
development
Increase in deposits for purchase of property, plant and equipment (13,166) (118) (13,383) (113)
Proceeds from disposal of property, plant and equipment 48 7 67 7
Cash received from finance lease receivable - 323 - 1,371
Decrease (increase) in short term investments 54,835 6,788 34,944 (3,894)
------ ----- ------ ------
Net cash provided by (used in) investing activities $39,952 $4,228 $18,362 $(6,024)
------- ------ ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid $(2,557) $(734) $(5,108) $(1,468)
Proceeds from share issued for option exercise 471 - 874 -
--- --- --- ---
Net cash used in financing activities $(2,086) $(734) $(4,234) $(1,468)
------- ----- ------- -------
Net increase (decrease) in cash and cash equivalents $40,020 $2,639 $18,206 $(7,926)
Cash and cash equivalents at beginning of period 73,184 146,797 94,558 157,371
Effect of exchange rate changes on cash and cash equivalents and short term investments 2,781 (3,549) 3,221 (3,558)
----- ------ ----- ------
Cash and cash equivalents at end of period $115,985 $145,887 $115,985 $145,887
======== ======== ======== ========
NAM TAI PROPERTY INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED JUNE 30, 2017 AND 2016
--------------------------------------------
(In Thousands of US dollars)
1. These financial statements, including the consolidated balance sheet as of December 31, 2016, which was derived from audited financial statements, do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial
statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's annual report on Form 20-F for the fiscal year ended December 31, 2016.
2. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for
the full year.
3. Accumulated other comprehensive loss represents foreign currency translation adjustments. The consolidated comprehensive income (loss) was $2,085 and $(2,643) for the three months ended June 30, 2017 and 2016, respectively.
4. A summary of the operation income, other income, net, net income (loss) and long-lived assets by geographical areas is as follows:
Three months ended June 30, Six months ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
OPERATION INCOME WITHIN:
-PRC, excluding Hong Kong $541 $637 $1,135 $1,291
==== ==== ====== ======
OTHER INCOME (EXPENSES), NET:
- Gain (loss) on exchange difference $2,692 $(2,318) $3,539 $(2,317)
- Interest income from finance lease receivable - - - 16
- Loss from Wuxi operations (130) (131) (296) (304)
- Others 12 17 59 256
--- --- --- ---
Total other income (expenses), net $2,574 $(2,432) $3,302 $(2,349)
====== ======= ====== =======
NET INCOME (LOSS) FROM OPERATIONS WITHIN:
- PRC, excluding Hong Kong $(504) $(673) $(832) $(1,598)
- Hong Kong 2,589 (1,970) 4,731 (1,386)
----- ------ ----- ------
Total net income (loss) $2,085 $(2,643) $3,899 $(2,984)
====== ======= ====== =======
June 30, 2017 December 31, 2016
------------- -----------------
LONG-LIVED ASSETS
WITHIN:
-Real estate properties
under development in
PRC, excluding Hong
Kong $43,606 $37,779
-Property, plant and
equipment in PRC,
excluding Hong Kong 13,891 507
- Hong Kong 3,208 3,228
----- -----
Total long-lived assets $60,705 $41,514
======= =======
NAM TAI PROPERTY INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE PERIODS ENDED JULY 28, 2017
(In Thousands of US dollars except share and per share data)
-----------------------------------------------------------
Unaudited Unaudited
One month Seven months
ended July ended July 28,
28, 2017 2017
---------- ---------------
Operation income (1) $175 $1,310
Operation expense - -
--- ---
Net operation income 175 1,310
Costs and expenses
General and administrative expenses 660 5,522
--- -----
660 5,522
Operating loss (485) (4,212)
Other income, net (2) 388 3,690
Interest income 571 4,895
Income before income tax 474 4,373
--- -----
Consolidated net income 474 4,373
Other comprehensive income - -
--- ---
Consolidated comprehensive income (3) $474 $4,373
==== ======
Earnings per share
Basic $0.01 $0.12
Diluted $0.01 $0.12
Weighted average number of shares ('000)
Basic 36,738 36,550
Diluted 37,516 37,185
Notes:
(1) The property at phase 2 in Gushu has been rented to a third party lessee with a term of three and a half years since May 2014.
(2) Other income, net, included exchange gain of $0.4 million, partly offset by loss from Wuxi operations of $0.1 million for the one month ended July 28, 2017.
(3) Consolidated comprehensive income for the one month ended July 28, 2017 mainly included exchange gain of $0.4 million as a result of the appreciation of Renminbi
against US dollar, interest income of $0.6 million earned from time deposits and net operation income of $0.2 million, partly offset by general and administrative expenses of
$0.7 million.
NAM TAI PROPERTY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT JULY 28, 2017
(In Thousands of US dollars)
---------------------------
Unaudited
July 28,
2017
----
ASSETS
Current assets:
Cash and cash
equivalents(1) $107,025
Short term investments(1) 62,147
Prepaid expenses and other
receivables 4,841
Assets held for sale 19,476
------
Total current assets 193,489
-------
Real estate properties
under development, net(2) 46,098
Property, plant and
equipment, net 17,112
Other assets 104
---
Total assets $256,803
--------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,534
Accrued expenses and other
payables 2,619
Dividend payable 2,562
-----
Total current liabilities 9,715
-----
EQUITY
Shareholders' equity:
Common shares 370
Additional paid-in capital 245,295
Retained earnings 10,953
Accumulated other
comprehensive loss(3) (9,530)
------
Total shareholders' equity 247,088
-------
Total liabilities and
shareholders' equity $256,803
--------
Note:
(1) According to the definition of "Balance Sheet" under the
Financial Accounting Standard Board ("FASB") Accounting Standards
Codification ("ASC") 210-10-20, cash equivalents are short-term,
highly liquid investments that are readily convertible to cash. Only
investments with original maturities of three months or less when
purchased qualify under that definition. Therefore, the fixed
deposits maturing over three months in amount of $62 million as at
July 28, 2017 are not classified as cash and cash equivalents but
are separately disclosed as short term investments in the balance
sheet.
(2) Capitalization on project investment was $2.5million for July
2017, totaling $7.4 million for seven months ended July 28, 2017and
our accumulated project investment was $46.1 million up to July 28,
2017.
(3) Accumulated other comprehensive loss represented foreign
currency translation adjustment.
NAM TAI PROPERTY INC.
CONSENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED JULY 28, 2017
(In Thousands of US dollars)
---------------------------
Unaudited Unaudited
One month ended Seven months
July 28, ended July
28,
2017 2017
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income $474 $4,373
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment, 28 187
land use rights and other assets
Loss on disposal of property, plant and equipment 90 49
Share-based compensation expenses 55 658
Unrealized exchange gain (286) (2,536)
Changes in current assets and liabilities:
Increase in prepaid expenses and other receivables (1,060) (787)
(Decrease) increase in accrued expenses and other payables (263) 1,172
---- -----
Total adjustments (1,436) (1,257)
------ ------
Net cash (used in) provided by operating activities $(962) $3,116
----- ------
CASH FLOWS FROM INVESTING ACTIVITIES
Payment of real estate properties under development $(373) $(3,344)
Purchase of property, plant & equipment (3) (132)
Decrease (increase) in deposits for real estate properties under development 6 (160)
Increase in deposits for purchase of property, plant and equipment (39) (13,422)
Proceeds from disposal of property, plant and equipment 1 68
(Increase) decrease in short term investments (7,433) 27,511
------ ------
Net cash (used in) provided by investing activities $(7,841) $10,521
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid $(2,562) $(7,670)
Proceeds from share issued for option exercise 2,008 2,882
----- -----
Net cash used in financing activities $(554) $(4,788)
----- -------
Net (decrease) increase in cash and cash equivalents $(9,357) $8,849
Cash and cash equivalents at beginning of period 115,985 94,558
Effect of exchange rate changes on cash and cash equivalents and short term investments 397 3,618
--- -----
Cash and cash equivalents at end of period $107,025 $107,025
======== ========
Please refer to the Nam Tai website (www.namtai.com) or the SEC website (www.sec.gov) for Nam Tai press releases and financial statements.
View original content:http://www.prnewswire.com/news-releases/nam-tai-property-inc-reports-q2-2017-results-300496524.html
SOURCE Nam Tai Property Inc.
