Core Online Games Business Shows Steady Growth, Mobile Internet Business Promising
HONG KONG, March 25, 2011 /PRNewswire-Asia/ -- NetDragon Websoft Inc. ("NetDragon", Stock Code: 777), a leading online game developer and operator in China, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2010. Additionally, a management conference call and live webcast is scheduled at 8:00 PM Hong Kong time, March 25, 2011 to review financial results and recent business developments.
Fourth Quarter 2010 Financial and Operational Highlights
Fiscal Year 2010 Financial Highlights
Chairman's Statement
Mr. Liu Dejian, Chairman and Executive Director of NetDragon, stated, "In 2010, the release of diversified versions of our flagship online games successfully attracted new gamers and drew old gamers back, which lead to our Fourth Quarter ACU mark reaching the highest level in 2010. We also continued to build strategic partnerships with globally renowned enterprises, and develop new online game products based on our strengthening R&D capabilities. Management is deeply pleased with NetDragon's recent rebound and the solid foundation we have laid for growth in our core online gaming business.
Mr. Liu concluded, "As for our mobile internet business, we continued to leverage our early-mover advantage and R&D prowess into tens of millions of aggregate installations of our mobile internet software. We also made headway in monetizing our mobile internet platform through advertising as well as our turnkey solution that integrates R&D, operations and our marketplace. We believe that our efforts in mobile internet will enable us to maintain our leading position in the coming years.
Fourth Quarter 2010 Business Highlights
Recent Developments
Business Outlook
Online Games business. NetDragon expects to release several new online games in 2011, including the following:
Mobile Internet business. NetDragon has built up a number of leading products, perfected channels, and acquired a broad user base in the sector. We will continue to develop mobile internet applications and other mobile products. Additionally, NetDragon will push forward with its strategy of platform development, to provide even more domestic and overseas small-to-medium sized developers with industry-leading platform resources, in order to realize win-win results.
| Financial Highlights: |
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| RMB('000) | 4Q2010 | 3Q2010 | QoQ(%) | FY2010 | FY2009 | YoY(%) | |
| Revenue | 143,957 | 128,219 | 12.3% | 531,772 | 621,836 | (14.5%) | |
| Gross Profit | 129,339 | 111,851 | 15.6% | 465,439 | 537,511 | (13.4%) | |
| GPM | 89.8% | 87.2% | 2.6% | 87.5% | 86.4% | 1.1% | |
| Profit for the period | 9,373 | 2,847 | 229.2% | 34,893 | 86,624 | (59.7%) | |
| NPM | 6.5% | 2.2% | 4.3% | 6.6% | 13.9% | (7.3%) | |
| EPS-Basic (RMB cents) | 1.76 | 0.55 | 220% | 6.64 | 16.57 | (59.9%) | |
| EPS-Diluted (RMB cents) | 1.76 | 0.55 | 220% | 6.64 | 16.56 | (59.9%) | |
| Metrics |
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| 4Q2010 | 3Q2010 | 2Q2010 | 1Q2010 | 4Q2009 | ||
| PCU | 542,000 | 589,000 | 449,000 | 451,000 | 492,000 | |
| ACU | 232,000 | 226,000 | 217,000 | 230,000 | 253,000 | |
| Note 1: Online games include Conquer Online, Eudemons Online, Zero Online, Tou Ming Zhuang Online, Heroes of Might and Magic Online, Way of the Five, Disney Fantasy Online, Tian Yuan and others |
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Management Conference Call
NetDragon will host a management conference call and webcast to review its results and recent developments, at 8:00PM Hong Kong Time, which corresponds to 8:00AM Eastern Standard Time, 25 March, 2011.
Details of the conference call are as follows:
| Dial in numbers: |
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| International Toll | 1-617-847-8705 | |
| US Toll Free | 1-800-599-9816 | |
| Hong Kong Toll Free | 800-963-844 | |
| South China Toll Free | 10-800-130-0399 | |
| North China Toll Free | 10-800-152-1490 | |
| Passcode | 469-329-38 | |
Replay service is available from 11:00PM 25 March to 12:00PM, 1 April, 2011. Below are the replay numbers for different regions. International Toll: 1-617-801-6888; US Toll Free: 1-888-286-8010; Replay passcode: 91-593-620. A live and archived webcast of the conference call will be available on the Investor Relations section of NetDragon's website at http://ir.netdragon.com/investor/ir_events.shtml Participants in the live webcast should visit the aforementioned website 10 minutes prior to the call, then click on the icon for "4Q and Fiscal Year 2010 Results Conference Call" and follow the registration instructions.
About NetDragon
NetDragon Websoft Inc. is a leading innovator and creative force in China's online gaming and mobile internet industries. Established in 1999, we are a vertically integrated developer & operator of MMORPGs and a cutting-edge R&D powerhouse. We launched our first self-made online game Monster & Me in 2002, followed by multiple titles including Eudemons Online, Conquer Online, Heroes of Might & Magic Online and Disney Fantasy Online. We are also China's pioneer in overseas expansion, directly operating titles in overseas markets since 2004 in English, Spanish, Arabic and other languages. Our online games currently in development include World of Dungeon Keeper, TRANSFORMERS Online, icombo (previously named as Cross Gate), and a new version of Ultima Online. In the mobile internet industry, we provide one of China's leading marketplaces for smartphone users, offering applications and content for the most popular mobile operating systems globally.
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||||||
| FOR THE THREE MONTHS AND THE YEAR ENDED 31 DECEMBER 2010 | ||||||||
| FortheThreeMonthsEnded | FortheYearEnded | |||||||
| 31/12/2010 (Unaudited) RMB'000 |
30/9/2010 (Unaudited) RMB'000 |
31/12/2010 (Audited) RMB'000 |
31/12/2009 (Audited) RMB'000 |
|||||
| Revenue | 143,957 | 128,219 | 531,772 | 621,836 | ||||
| Cost of revenue | (14,618) | (16,368) | (66,333) | (84,325) | ||||
| Gross profit | 129,339 | 111,851 | 465,439 | 537,511 | ||||
| Other income and gains | 37,353 | 8,565 | 60,864 | 57,807 | ||||
| Selling and marketing expenses | (24,280) | (28,886) | (101,993) | (133,460) | ||||
| Administrative expenses | (49,783) | (48,059) | (182,022) | (163,926) | ||||
| Development costs | (49,891) | (36,966) | (162,234) | (201,461) | ||||
| Other expenses | (5,552) | (1,380) | (10,392) | (1,959) | ||||
| Net loss on derivative financial instruments | - | - | - | (15,214) | ||||
| Net gain on financial assets designated as fair value through profit or loss |
- | - | - | 18,431 | ||||
| Share of losses of jointly controlled entities | - | - | - | (724) | ||||
| Profit before taxation | 37,186 | 5,125 | 69,662 | 97,005 | ||||
| Taxation | (27,813) | (2,278) | (34,769) | (10,381) | ||||
| Profit for the period | 9,373 | 2,847 | 34,893 | 86,624 | ||||
| Other comprehensive income (expenses): | ||||||||
| Exchange differences arising on translation of foreign operations |
(151) | (49) | (172) | (784) | ||||
| Gain on revaluation of property | 673 | - | 673 | - | ||||
| 522 | (49) | 501 | (784) | |||||
| Total comprehensive income for the period | 9,895 | 2,798 | 35,394 | 85,840 | ||||
| Profit for the period attributable to: | ||||||||
| - Owners of the company | 9,292 | 2,894 | 34,949 | 87,108 | ||||
| - Non-controlling interests | 81 | (47) | (56) | (484) | ||||
| 9,373 | 2,847 | 34,893 | 86,624 | |||||
| Total comprehensive income attributable to: | ||||||||
| - Owners of the company | 9,814 | 2,845 | 35,450 | 86,324 | ||||
| - Non-controlling interests | 81 | (47) | (56) | (484) | ||||
| 9,895 | 2,798 | 35,394 | 85,840 | |||||
| Earnings per share | RMB cents | RMB cents | RMB cents | RMB cents | ||||
| -Basic | 1.76 | 0.55 | 6.64 | 16.57 | ||||
| -Diluted | 1.76 | 0.55 | 6.64 | 16.56 | ||||
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||
| AS AT 31 DECEMBER 2010 | ||||
| 31December2010 | 31December2009 | |||
| (Audited) | (Audited)/(Restated) | |||
| RMB'000 | RMB'000 | |||
| Non-current assets | ||||
| Property, plant and equipment | 128,534 | 138,011 | ||
| Prepaid lease payments | 87,753 | 12,917 | ||
| Investment property | 14,551 | - | ||
| Deposit paid for acquisition of property, plant and equipment | 19,050 | 8,895 | ||
| Intangible assets | 13,136 | 12,980 | ||
| Interests in jointly controlled entities | - | - | ||
| Available-for-sale investments | 4,000 | 4,000 | ||
| Loan receivables | 5,819 | 7,313 | ||
| Deferred tax assets | 54 | 54 | ||
| 272,897 | 184,170 | |||
| Current assets | ||||
| Prepaid lease payments | 1,784 | 228 | ||
| Loan receivables | 893 | 893 | ||
| Trade receivables | 24,393 | 14,128 | ||
| Other receivables, prepayments and deposits | 40,072 | 66,272 | ||
| Held for trading investments | 1,079 | 377 | ||
| Advance to a jointly controlled entity | - | 29,000 | ||
| Amount due from a related company | 171 | - | ||
| Tax recoverable | - | 20 | ||
| Bank deposits | 340,828 | 551,970 | ||
| Bank balances and cash | 877,823 | 705,053 | ||
| 1,287,043 | 1,367,941 | |||
| Current liabilities | ||||
| Trade payables | 519 | 285 | ||
| Other payables and accruals | 58,218 | 67,881 | ||
| Deferred income | 23,119 | 18,189 | ||
| Amount due to a related company | 5,328 | - | ||
| Income tax payable | 21,599 | 9,935 | ||
| 108,783 | 96,290 | |||
| Net current assets | 1,178,260 | 1,271,651 | ||
| 1,451,157 | 1,455,821 | |||
| Capital and reserves | ||||
| Share capital | 39,264 | 39,264 | ||
| Share premium and reserves | 1,412,433 | 1,417,041 | ||
| Equity attributable to owners of the Company | 1,451,697 | 1,456,305 | ||
| Non-controlling interests | (540) | (484) | ||
| 1,451,157 | 1,455,821 | |||
