SHANGHAI, Aug. 10 /PRNewswire-Asia/ -- Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider for hotel accommodations, airline tickets, packaged tours and corporate travel management in China, today announced its unaudited financial results for the second quarter ended June 30, 2010.
Highlights for the Second Quarter of 2010
-- On May 27, 2010, Ctrip successfully completed the transaction to invest
90% of the issued share capital of Wing On Travel's travel service
segment, a Hong Kong based travel service provider. Ctrip began
consolidating Wing On's financials since then.
-- Net revenues were RMB695 million (US$103 million) for the second
quarter of 2010, up 46% year-on-year. In the second quarter, Wing On
Travel and ezTravel contributed 2% for the year-on-year growth for net
revenues.
-- Gross margin was 78% for the second quarter of 2010, compared to 77% in
the same period in 2009.
-- Income from operations was RMB257 million (US$38 million) for the
second quarter of 2010, up 57% year-on-year. Excluding share-based
compensation charges (non-GAAP), income from operations was RMB316
million (US$47 million), up 66% year-on-year.
-- Operating margin was 37% for the second quarter of 2010, compared to
34% in the same period in 2009. Excluding share-based compensation
charges (non-GAAP), operating margin was 45%, compared to 40% in the
same period in 2009.
-- Net income attributable to Ctrip's shareholders was RMB235 million
(US$35 million) in the second quarter of 2010, up 48% year-on-year.
Excluding share-based compensation charges (non-GAAP), net income
attributable to Ctrip's shareholders was RMB293 million (US$43 million),
up 58% year-on-year.
-- Diluted earnings per ADS were RMB1.55 (US$0.23) for the second quarter
of 2010. Excluding share-based compensation charges (non-GAAP), diluted
earnings per ADS were RMB1.93 (US$0.29) for the second quarter of 2010.
-- Share-based compensation charges were RMB58 million (US$9 million),
accounting for 8% of the net revenues, or RMB0.38 (US$0.06) per ADS for
the second quarter of 2010.
"We are pleased to announce solid results for the second quarter of 2010," said Min Fan, President and Chief Executive Officer of Ctrip. "Through our strong execution, we were able to extend our leadership in all business lines. Our presence in the Greater China region will enable us to provide excellent services to customers travelling abroad. The Ctrip team is well positioned to capture more opportunities in the travel industry in China."
Second Quarter 2010 Financial Results
For the second quarter of 2010, Ctrip reported total revenues of RMB742 million (US$109 million), representing a 46% increase from the same period in 2009 and an 18% increase from the previous quarter.
Hotel reservation revenues amounted to RMB316 million (US$47 million) for the second quarter of 2010, representing a 42% increase year-on-year, primarily driven by an increase of 34% in hotel reservation volume, and an increase of 5% commission per room night year-on-year. Hotel reservation revenues increased 26% quarter-on-quarter.
Air ticket booking revenues for the second quarter of 2010 were RMB307 million (US$45 million), representing a 42% increase year-on-year, primarily driven by a 22% increase in air ticketing sales volume, and a 17% increase in commission per ticket year-on-year. Air ticket booking revenues increased 16% quarter-on-quarter.
Packaged-tour revenues for the second quarter of 2010 were RMB67 million (US$10 million), representing an 88% increase year-on-year, due to the increase of leisure travel volume, and a 7% decrease quarter-on-quarter, due to seasonality.
Corporate travel revenues for the second quarter of 2010 were RMB34 million (US$5 million), representing an 83% increase year-on-year, and a 28% increase quarter-on-quarter, primarily driven by the increased corporate travel demand from business activities.
For the second quarter of 2010, net revenues were RMB695 million (US$103 million), representing a 46% increase from the same period in 2009 and an 18% increase from the previous quarter. In the second quarter, Wing On Travel and ezTravel contributed 2% for the year-on-year growth for net revenues.
Gross margin was 78% in the second quarter of 2010, compared to 77% in the same period in 2009, and remained consistent with that in the previous quarter.
Product development expenses for the second quarter of 2010 increased by 43% to RMB109 million (US$16 million) from the same period in 2009, primarily due to an increase of product development personnel and share-based compensation charges. Product development expenses for the second quarter of 2010 increased by 9% from the previous quarter, primarily due to an increase of product development personnel. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 14% of the net revenues and remained consistent with that in the same period in 2009 and in the previous quarter.
Sales and marketing expenses for the second quarter of 2010 increased by 29% to RMB107 million (US$16 million) from the same period in 2009, and increased by 13% from the previous quarter, primarily due to the increase of sales and marketing related activities. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 14% of the net revenues, decreasing from 17% in the same period in 2009 and 15% in the previous quarter.
General and administrative expenses for the second quarter of 2010 increased by 55% to RMB71 million (US$10 million) from the same period in 2009, primarily due to an increase of administrative personnel and share-based compensation charges. General and administrative expenses for the second quarter of 2010 increased by 6% from the previous quarter, primarily due to an increase of administrative personnel. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 5% of the net revenues, decreasing from 6% in the same period in 2009, and remained consistent with that in the previous quarter.
Income from operations for the second quarter of 2010 was RMB257 million (US$38 million), representing an increase of 57% from the same period in 2009 and an increase of 31% from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB316 million (US$47 million), representing an increase of 66% from the same period in 2009 and an increase of 21% from the previous quarter.
Operating margin was 37% in the second quarter of 2010, compared to 34% in the same period in 2009, and 33% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 45%, compared to 40% in the same period in 2009 and 44% in the previous quarter.
Net income attributable to Ctrip's shareholders for the second quarter of 2010 was RMB235 million (US$35 million), representing a 48% increase from the same period in 2009, and a 24% increase from the previous quarter. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB293 million (US$43 million), representing an increase of 58% from the same period in 2009, and an increase of 15% from the previous quarter.
The effective tax rate for the second quarter of 2010 was 19%, increased from 18% in the same period of 2009 and 12% in the previous quarter, primarily due to the normalization of the tax rate in the second quarter of 2010.
Diluted earnings per ADS were RMB1.55 (US$0.23) for the second quarter of 2010. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB1.93 (US$0.29) for the second quarter of 2010.
As of June 30, 2010, the balance of cash, restricted cash and short-term investment was RMB2.7 billion (US$404 million).
Business Outlook
For the third quarter of 2010, the Company expects to continue the net revenue growth year-on-year at a rate of approximately 35-40%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.
Conference Call
Ctrip's management team will host a conference call at 9:00PM U.S. Eastern Time on August 9, 2010 (or 9:00AM on August 10, 2010 in the Shanghai/HK time zone) following the announcement.
The conference call will be available on Webcast live and replay at: http://ir.ctrip.com . The call will be archived for one month at this website.
The dial-in details for the live conference call: U.S. Toll Free Number +1.888.680.0894, International dial-in number +1.617.213.4860, Passcode 58663153. For pre-registration, please click https://www.theconferencingservice.com/prereg/key.process?key=PMCABWTWF .
A telephone replay of the call will be available after the conclusion of the conference call through August 17, 2010. The dial-in details for the replay: U.S. Toll Free Number +1.888.286.8010, International dial-in number +1.617.801.6888, Passcode 57641801.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Ctrip's strategic and operational plans, contain forward-looking statements. Ctrip may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Ctrip's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the
slow-down of economic growth in China and the global economic downturn, general declines or disruptions in the travel industry, volatility in the trading price of Ctrip's ADSs, Ctrip's reliance on its relationships with travel suppliers and strategic alliances, failure to further increase Ctrip's brand recognition to obtain new business partners and consumers, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in China, Hong Kong, Macau or Taiwan, failure to successfully develop Ctrip's corporate travel business, damage to or failure of Ctrip's infrastructure and technology, loss of services of Ctrip's key executives, inflation in China and in other countries, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Ctrip's affiliated Chinese entities and the contractual arrangements among Ctrip, its affiliated Chinese entities and their shareholders, and other risks outlined in Ctrip's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F and other filings. All information provided in this press release and in the attachments is as of the date of the issuance, and Ctrip does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Ctrip's unaudited consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Ctrip uses non-GAAP financial information related to product development expenses, sales and marketing expenses, general and administrative expenses, income from operations, operating margin, net income, and diluted earnings per ordinary share and per ADS, each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, "Stock Compensation" for 2010 and 2009. Ctrip's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.
Non-GAAP information is not prepared in accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in our business for the foreseeable future.
Reconciliations of Ctrip's non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.
About Ctrip.com International, Ltd.
Ctrip.com International, Ltd. is a leading travel service provider of hotel accommodations, airline tickets, packaged tours, and corporate travel management in China. Ctrip aggregates hotel and flight information to enable business and leisure travelers to make informed and cost-effective bookings. Ctrip also books vacation packages and guided tours. In addition, Ctrip corporate travel management services help corporate clients effectively manage their travel requirements. Since its inception in 1999, Ctrip has experienced substantial growth and become one of the best-known travel brands in China.
For further information, please contact:
June Zhu
Ctrip.com International, Ltd.
Tel: +86-21-3406-4880 x12258
Email: jun_zhu@ctrip.com
Lin Zhang
Ctrip.com International, Ltd.
Tel: +86-21-3406-4880 x12920
Email: z_lin@ctrip.com
Ctrip.com International, Ltd.
Consolidated Balance Sheet Information
December June June
31, 2009 30, 2010 30, 2010
RMB RMB USD
(unaudited) (unaudited) (unaudited)
ASSETS
Current assets:
Cash 1,434,618,382 1,539,479,378 227,011,631
Restricted cash 113,150,289 160,894,895 23,725,561
Short-term investment 180,183,917 1,038,322,278 153,111,005
Accounts receivable, net 420,579,005 647,605,152 95,495,857
Prepayments and other
current assets 134,318,164 401,343,732 59,182,147
Deferred tax assets,
current 23,446,059 34,979,527 5,158,081
Total current assets 2,306,295,816 3,822,624,962 563,684,282
Long-term deposits 143,195,191 153,256,984 22,599,275
Land use rights 108,922,018 107,627,912 15,870,812
Property, equipment and
software 550,506,595 612,880,727 90,375,393
Investment 658,051,285 1,244,942,687 183,579,250
Goodwill 322,936,838 758,231,441 111,808,809
Intangible assets 66,851,954 295,887,513 43,631,573
Total assets 4,156,759,697 6,995,452,226 1,031,549,394
LIABILITIES
Current liabilities:
Accounts payable 291,045,743 625,913,266 92,297,171
Salary and welfare
payable 130,539,660 144,638,916 21,328,455
Taxes payable 142,256,695 117,864,771 17,380,339
Advances from customers 276,792,049 487,229,567 71,846,873
Accrued liability for
customer reward program 88,254,996 103,249,360 15,225,151
Other payables and
accruals 229,652,319 227,395,815 33,531,786
Total current
liabilities 1,158,541,462 1,706,291,695 251,609,775
Deferred tax liabilities,
non-current 11,509,937 49,180,880 7,252,213
Total liabilities 1,170,051,399 1,755,472,575 258,861,988
SHAREHOLDERS' EQUITY
Share capital 2,801,334 2,920,614 430,674
Additional paid-in
capital 1,219,815,250 2,931,265,943 432,244,480
Statutory reserves 72,489,182 72,489,182 10,689,255
Accumulated other
comprehensive (loss) /
income (77,742,443) 16,883,180 2,489,594
Retained Earnings 1,707,684,596 2,133,341,440 314,582,532
Total Ctrip's
shareholders' equity 2,925,047,919 5,156,900,359 760,436,535
Noncontrolling interests 61,660,379 83,079,292 12,250,871
Total shareholders'
equity 2,986,708,298 5,239,979,651 772,687,406
Total liabilities and
shareholders' equity 4,156,759,697 6,995,452,226 1,031,549,394
Ctrip.com International, Ltd.
Consolidated Statement of Operations Information
Quarter Ended Quarter Ended Quarter Ended Quarter Ended
June 30, 2009 March 31, 2010 June 30, 2010 June 30, 2010
RMB RMB RMB USD
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Hotel
reservation 223,271,782 251,912,292 316,150,468 46,619,548
Air-ticketing** 216,242,260 264,723,073 307,233,692 45,304,681
Packaged tour 35,689,994 71,781,013 67,042,613 9,886,104
Corporate
travel** 18,366,314 26,274,358 33,659,355 4,963,409
Others 14,088,260 12,514,361 17,559,484 2,589,322
Total revenues 507,658,610 627,205,097 741,645,612 109,363,064
Less: business
tax and related
surcharges (31,371,685) (40,483,224) (46,465,222) (6,851,762)
Net revenues 476,286,925 586,721,873 695,180,390 102,511,302
Cost of revenues (108,061,461) (128,377,508) (151,154,849) (22,289,294)
Gross profit 368,225,464 458,344,365 544,025,541 80,222,008
Operating
expenses:
Product
development * (76,285,782) (100,721,820) (109,293,974) (16,116,490)
Sales and
marketing * (82,817,192) (94,439,324) (106,724,067) (15,737,531)
General and
administrative* (45,444,456) (66,741,488) (70,629,317) (10,414,999)
Total operating
expenses (204,547,430) (261,902,632) (286,647,358) (42,269,020)
Income from
operations 163,678,034 196,441,733 257,378,183 37,952,988
Interest income 5,000,977 5,337,051 8,954,150 1,320,379
Other income 18,276,381 581,797 15,980,806 2,356,530
Income before
income tax
expense and
equity in
income 186,955,392 202,360,581 282,313,139 41,629,897
Income tax
expense (33,393,036) (24,314,306) (52,389,816) (7,725,402)
Equity in income
of affiliates 6,581,137 11,236,298 7,222,181 1,064,983
Net income 160,143,493 189,282,573 237,145,504 34,969,478
Less: Net
(income) / loss
attributable to
noncontrolling
interests (1,284,685) 1,162,858 (1,934,091) (285,201)
Net income
attributable to
Ctrip's
shareholders 158,858,808 190,445,431 235,211,413 34,684,277
Earnings per
ordinary share
- Basic 4.73 5.53 6.58 0.97
- Diluted 4.54 5.21 6.20 0.91
Earnings per ADS
- Basic 1.18 1.38 1.64 0.24
- Diluted 1.14 1.30 1.55 0.23
Weighted average
ordinary shares
outstanding
- Basic 33,574,513 34,467,334 35,756,826 35,756,826
- Diluted 34,973,103 36,561,172 37,917,285 37,917,285
* Share-based
compensation
charges included
are as follows:
Product
development 7,279,340 15,993,081 14,981,755 2,209,210
Sales and
marketing 4,040,372 8,843,140 8,033,136 1,184,566
General and
administrative 15,661,986 39,386,817 35,211,001 5,192,214
** Certain prior year amounts have been reclassified with no effect on
net income or retained earnings to conform to the 2010 financial
information presentation. Revenues are presented in accordance with the
definitions below:
Air-ticketing revenues primarily include commissions from air ticket
booking and related services, including sales of aviation casualty
insurance, and revenue generated from air-ticket delivery services.
Corporate travel management revenues primarily include commissions
from hotel reservation, air ticket booking and packaged-tour services
rendered to corporate clients.
Ctrip.com International, Ltd.
Reconciliation of GAAP and Non-GAAP Results
(In RMB, except % and per share information)
Quarter Ended June 30, 2010
GAAP Result % of Share % of Non-GAAP % of
Net -based Net Result Net
Revenue Compensation Revenue Revenue
Product
development (109,293,974) 16% 14,981,755 2% (94,312,219) 14%
Sales and
marketing (106,724,067) 15% 8,033,136 1% (98,690,931) 14%
General and
administrative(70,629,317) 10% 35,211,001 5% (35,418,316) 5%
Total operating
expenses (286,647,358) 41% 58,225,892 8% (228,421,466) 33%
Income from
operations 257,378,183 37% 58,225,892 8% 315,604,075 45%
Net income
attributable
to Ctrip's
shareholders 235,211,413 34% 58,225,892 8% 293,437,305 42%
Diluted
earnings per
ordinary share
(RMB) 6.20 1.54 7.74
Diluted
earnings per
ADS (RMB) 1.55 0.38 1.93
Diluted
earnings per
ADS (USD) 0.23 0.06 0.29
Quarter Ended March 31, 2010
GAAP Result % of Share % of Non-GAAP % of
Net -based Net Result Net
Revenue Compensation Revenue Revenue
Product
development (100,721,820) 17% 15,993,081 3% (84,728,739) 14%
Sales and
marketing (94,439,324) 16% 8,843,140 2% (85,596,184) 15%
General and
administrative(66,741,488) 11% 39,386,817 7% (27,354,671) 5%
Total operating
expenses (261,902,632) 45% 64,223,038 11% (197,679,594) 34%
Income from
operations 196,441,733 33% 64,223,038 11% 260,664,771 44%
Net income
attributable
to Ctrip's
shareholders 190,445,431 32% 64,223,038 11% 254,668,469 43%
Diluted
earnings per
ordinary share
(RMB) 5.21 1.76 6.97
Diluted
earnings per
ADS (RMB) 1.30 0.44 1.74
Diluted
earnings per
ADS (USD) 0.19 0.06 0.26
Quarter Ended June 30, 2009
GAAP Result % of Share % of Non-GAAP % of
Net -based Net Result Net
Revenue Compensation Revenue Revenue
Product
development (76,285,782) 16% 7,279,340 2% (69,006,442) 14%
Sales and
marketing (82,817,192) 17% 4,040,372 1% (78,776,820) 17%
General and
administrative(45,444,456) 10% 15,661,986 3% (29,782,470) 6%
Total operating
expenses (204,547,430) 43% 26,981,698 6% (177,565,732) 37%
Income from
operations 163,678,034 34% 26,981,698 6% 190,659,732 40%
Net income
attributable
to Ctrip's
shareholders 158,858,808 33% 26,981,698 6% 185,840,506 39%
Diluted
earnings per
ordinary share
(RMB) 4.54 0.77 5.31
Diluted
earnings per
ADS (RMB) 1.14 0.19 1.33
Diluted
earnings per
ADS (USD) 0.17 0.03 0.19
Notes for all the financial schedules presented:
Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based
on the certified exchange rate of USD1.00=RMB6.7815 on June 30,
2010 published by the Federal Reserve Board.
Note 2: Effective on January 21, 2010, Company changed ratio of the
American Depositary Shares ("ADSs") to ordinary shares from two
(2) ADSs representing one (1) ordinary shares to four (4) ADSs
representing one (1) ordinary share. The change is reflected
retroactively in the numbers for all the periods presented above.
