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45
Glorious Property
Annual Report 2011
Financial Review (Continued)
COST OF SALES
The cost of sales for the year ended 31 December 2011 was RMB5,788.2 million, representing an increase of 56.7%
compared to RMB3,694.9 million in 2010. The average costs of sales in 2011 was RMB5,711 per sq.m., as compared to
RMB7,305 per sq.m. in 2010.
Components of the consolidated cost of sales for the year are as follows:
2011
2010
RMB’000
RMB
per sq.m.
RMB’000
RMB
per sq.m.
Construction costs
3,194,664
3,154
2,062,674
4,082
Land costs
1,388,368
1,371
859,446
1,701
Capitalised interests
665,578
657
371,697
736
Business taxes and other levies
535,993
529
397,139
786
Sub-total
5,784,603
5,711
3,690,956
7,305
Cost of sales of other business
3,643
N/A
3,978
N/A
Total
5,788,246
3,694,934
The lower average cost of sales was mainly driven by the higher proportion of properties from the projects in the
second- and third-tier cities that were sold and delivered in 2011.
GROSS PROFIT
The Group’s consolidated gross profit for 2011 was RMB3,797.2 million, representing an increase of 11.1% from a
gross profit of RMB3,419.1 million in 2010. The increase in consolidated gross profit was mainly due to the increase
in revenue in 2011. The Group’s gross profit margin was 39.6% for the year ended 31 December 2011, as compared
to 48.1% for the year ended 31 December 2010. The lower gross profit margin for 2011 was mainly due to higher
proportion of properties being sold and delivered in the second- and third-tier cities, where the average selling prices
and profit margins are generally lower.
OTHER INCOME
Other income for the year ended 31 December 2011 was RMB182.7 million, mainly included interest income of
RMB145.5 million (2010: RMB99.6 million). Other income for the year ended 31 December 2010 was RMB803.2
million, which mainly included a grant income from the local government authorities of RMB665.2 million as an
appreciation of the Group’s contribution.