CHINA METRO RURAL HOLDINGS LTD FOR IMMEDIATE RELEASE
CNR Announces its Results for the Six Months ended September 30, 2014NEW YORK, (MARKETWIRE) - November 26, 2014 - China Metro-Rural Holdings Limited (the "Company") 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, 2014.
Major Events: Commencement of project in Zhoukou City, Henan Province of the PRCDuring the period, the Group has commenced a new project in Zhoukou City (the "Zhoukou Project") which is focused on agricultural logistics as well as urban rural migration re-development businesses. The planned site area of the Zhoukou Project is approximately 5.5 million square meters with corresponding maximum gross floor area of approximately 10 million square meters. The Group already entered into auctions and has acquired 414,192 square meters of land. The first phase of construction with total gross floor area of approximately 392,000 square meters has commenced. The official pre-sale is expected to commence on November 29, 2014.
Acquisition of a hotel operation in Tieling City, Liaoning Province of the PRCDuring the period, the Group has acquired a hotel operation (the "Hotel") located at our Tieling Project at a consideration of RMB15,000,000 (approximately HK$18,860,000). The acquisition gave rise to goodwill of approximately HK$919,000. The Hotel has 168 rooms with a gross floor area of approximately 28,692 square meters. The Hotel is currently closed for minor renovations and repositioning and will be re-opened in 2015.
Set up of a joint venture companyDuring the period, the Group has set up a company which is inactive and pending for capital injection from the Company. As at September 30, 2014, the Group has a capital commitment of RMB11,608,000 (approximately HK$14,638,000) toward this company.
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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$152,471,000 for the six months ended September 30, 2013 to HK$43,405,000 for the six months ended September 30, 2014, representing a year-over-year decrease of 71.5%. 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 24,391 square meters for the six months ended September 30,
2013 to 10,025 square meters for the six months ended September 30, 2014, representing a year-over- year decrease of 58.9%.
Gross profit percentage increased from 35.2% for the six months ended September 30, 2013 to 41.3% for the six months ended September 30, 2014.
Other income and losses, net were a loss of approximately HK$5,680,000 for the six months ended September 30, 2013. Other income and gains, net were approximately HK$81,526,000 for the six months ended September 30, 2014. Included in other income and gains/(losses), net, was a government subsidy of HK$9,744,000 (2013: HK$11,657,000) for the six months ended September 30, 2014, representing a year-over-year decrease of 16.4%, a gain of HK$71,660,000 (2013: a loss of HK$12,623,000) arising from fair value changes of derivative components of convertible bonds and warrants. Selling expenses decreased from HK$13,686,000 for the six months ended September 30, 2013 to HK$12,792,000 for the six months ended September 30, 2014, representing a year-over-year decrease of 6.5%.
Administrative expenses increased from HK$49,211,000 for the six months ended September 30, 2013 to HK$53,442,000 for the six months ended September 30, 2014, representing a year-over-year increase of 8.6%.
Finance income decreased from HK$19,943,000 for the six months ended September 30, 2013 to
HK$7,198,000 for the six months ended September 30, 2014, representing a year-over-year decrease of
63.9%. Included in finance income was an interest income on other receivables of HK$6,601,000 (2013: HK$19,491,000) for the six months ended September 30, 2014, representing a year-over-year decrease
of 66.1%.
Income tax expenses increased from HK$20,099,000 for the six months ended September 30, 2013 to
HK$22,738,000 for the six months ended September 30, 2014, representing a year-over-year increase of
13.1%. The effective tax rate decrease from 480.3% for the six months ended September 30, 2013 to
71.0% for the six months ended September 30, 2014. 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 differently from that previously adopted by the Group, thus giving rise to this additional tax. As the interpretation of the taxability and deductibility of these items are highly subjective, the additional tax could only be confirmed upon completion of the tax clearance procedures.
Net loss attributable to the equity holders of the Company was HK$20,584,000 for the six months ended September 30, 2013. Net profit attributable to equity holders of the Company was HK$13,477,000 for the six months ended September 30, 2014.
Rural-Urban Migration and City Re-Development Business
There were no results generated from this segment during the current and prior period.
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ABOUT CHINA METRO-RURAL HOLDINGS LIMITEDChina 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.
CONTACT:
China Metro-Rural Holdings Limited- Investor Relations Department
Phone: (852) 2111 3815 E-mail: ir@chinametrorural.com
www.chinametrorural.com www.nlc88.com
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CHINA METRO-RURAL HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED SEPTEMBER 30 2014 2014 2013 US$'000 HK$'000 HK$'000 (Unaudited) (Unaudited) (Unaudited) (Note 2)
Revenue 5,565 43,405 152,471
Cost of sales (3,265) (25,467) (98,802)
Gross profit 2,300 17,938 53,669
Other income, net 1,302 10,157 12,072
Other gains/(losses), net 9,150 71,369 (17,752) Selling expenses (1,640) (12,792) (13,686) Administrative expenses (6,852) (53,442) (49,211) Operating profit/(loss) 4,260 33,230 (14,908)
Finance income 923 7,198 19,943
Finance costs (323) (2,519) - Finance income -net 600 4,679 19,943
Share of losses of an associate (752) (5,865) (850)
Income tax expenses (2,915) (22,738) (20,099)
Attributable to:
Equity holders of the Company 1,728 13,477 (20,584) Non-controlling interests (535) (4,171) 4,670
1,193 9,306 (15,914)
The accompanying notes are an integral part of this press release.
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CHINA METRO-RURAL HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED SEPTEMBER 302014 | 2014 | 2013 |
US$'000 | HK$'000 | HK$'000 |
(Unaudited) | (Unaudited) | (Unaudited) |
(Note 2) |
Profit/(loss) for the period 1,193 9,306 (15,914)
Other comprehensive income, net of tax: Items that may be reclassified to income
statement
Exchange difference on translation of foreign
operations 569 4,440 35,187
Total comprehensive income for the period 1,762 13,746 19,273
Total comprehensive (loss)/income for the period attributable to:
Equity holders of the Company 2,274 17,737 12,875
Non-controlling interests (512) (3,991) 6,398
1,762 13,746 19,273
The accompanying notes are an integral part of this press release.
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CHINA METRO-RURAL HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION September 30, March 31, 2014 2014 2014 US$'000 HK$'000 HK$'000 (Unaudited) (Unaudited) (Unaudited) (Note 2) Non-current assets
Investment properties 78,233 610,214 608,909
Property, plant and equipment 34,244 267,104 103,467
Land use rights 16,237 126,645 77,560
Goodwill 118 919 - Deposit for investment properties 1,617 12,610 12,583
Deposit for acquisition of land use rights 16,426 128,121 127,847
Interest in an associate 2,396 18,692 24,522
Restricted and pledged bank deposits 1,778 13,871 13,842
Deferred income tax assets 1,771 13,818 1,210
152,820 1,191,994 969,940
Completed properties held for sale 48,193 375,904 396,136
Properties under development 309,598 2,414,868 1,631,992
Land use rights 23,422 182,689 184,809
Deposit for acquisition of land use rights 61,329 478,370 664,493
Trade and other receivables 34,012 265,295 313,388
Restricted and pledged bank deposits 3,418 26,659 36,844
Cash and cash equivalents 17,104 133,409 146,192
497,076 3,877,194 3,373,854
Trade payables, other payables and accruals 131,756 1,027,698 587,519
Receipt in advance 14,237 111,044 28,160
Current income tax liabilities 40,395 315,081 325,351
Derivative financial liabilities 30,847 240,608 312,267
Bank and other borrowings 64,945 506,570 720,843
Convertible bonds 49,786 388,330 -
331,966 2,589,331 1,974,140
Net current assets 165,110 1,287,863 1,399,714
Total assets less current liabilities 317,930 2,479,857 2,369,654
Deferred income tax liabilities 11,476 89,514 89,323
Bank and other borrowings 97,488 760,403 386,309
Loans from a shareholder 8,333 65,000 - Convertible bonds 21,707 169,318 512,146
Loan from a non-controlling interest of a
subsidiary 7,539 58,800 58,800
146,543 1,143,035 1,046,578
The accompanying notes are an integral part of this press release.
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CHINA METRO-RURAL HOLDINGS LIMITED UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION - (Continued) September 30, March 31,2014 | 2014 | 2014 |
US$'000 | HK$'000 | HK$'000 |
(Unaudited) | (Unaudited) | (Unaudited) |
(Note 2) |
Equity attributable to equity holders of the
Company
Share capital 73 573 573
Reserves 167,637 1,307,572 1,289,835
167,710 1,308,145 1,290,408
Non-controlling interests 3,677 28,677 32,668
Total equity 171,387 1,336,822 1,323,076
The accompanying notes are an integral part of this press release.
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CHINA METRO-RURAL HOLDINGS LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED SEPTEMBER 30 2014 2014 2013 US$'000 HK$'000 HK$'000 (Unaudited) (Unaudited) (Unaudited) (Note 2) Net cash used in operating activities (12,180) (95,004) (434,395) Net cash used in investing activities (9,469) (73,857) (1,853) Net cash generated from financing activities 19,958 155,675 302,663 Net decrease in cash and cash equivalents (1,691) (13,186) (133,585)
Cash and cash equivalents at beginning of the period 18,743 146,192 364,539
Effect of foreign exchange rate changes 52 403 4,846
Cash and cash equivalents at end of the period 17,104 133,409 235,800
The accompanying notes are an integral part of this press release.
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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, 2014.
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,
2014 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.
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