Total Revenues up 50.5% YoY; Net Profit up 108.3% YoY
Mobile Business Experienced Rapid Growth
HONG KONG, June 3, 2013 /PRNewswire/ -- NetDragon Websoft Inc. ("NetDragon", Stock code: 777), a leading developer and operator of online games and mobile internet platforms in China, today announced its financial results for the first quarter ended March 31, 2013 and is scheduled to hold a conference call and live webcast on June 3, 2013 at 7:00pm Hong Kong Time / 7:00am Eastern Daylight Time to review the company's performance and recent business developments.
First Quarter 2013 Financial and Operational Highlights
1 See "Non-GAAP Financial Measures" section for more details on the reasons for presenting these measures |
Mr. Liu Dejian, Chairman and Executive Director of NetDragon, commented: "The first quarter of 2013 witnessed NetDragon's continued growth in total revenues and net profit. Total revenues grew 7.8% quarter over quarter to RMB 356.7 million, and net profit up 108.3% year over year. We are pleased to see our duel-engine strategy on online games and mobile Internet businesses has been paid off as evidenced by our strong results. The stable structure as a result of the two businesses mutually supporting each other is expected to strongly enhance our company's long-term development."
"As for our online games business, our company further optimized the resource allocation for projects, and focused more on depth development of core titles while maintaining a steady flow of new products in the development pipeline, with the aim of consolidating the existing gamer base through the company's core games, and laying the groundwork for new player acquisition. In addition, NetDragon has launched EPs in different languages to strengthen our key titles' revenue in overseas markets. In this quarter, overseas sales from game markets saw a 9.4% rise quarter-over-quarter."
"2013 is essential to the establishment of mobile internet footprint. Although Internet companies have accelerated the pace of their engagement in mobile segment, our mobile business maintained the leading position across the industry through our pioneering efforts and ongoing innovation. Mobile delivered revenue up to RMB 144.7 million in this quarter, an increase of 42.0% quarter-over-quarter. Notably, 91 Wireless' platforms exceeded over 10 billion accumulated app downloads, evidencing its user stickiness and superiority over competitive offerings. The company continues to focus on strengthening the advantages of 91 Assistant and HiMarket platforms while steadily driving proprietary research and development of mobile games and software products and providing more vertical apps to stay in tune with users' increasingly diversified needs. For all this, we are continuing to broaden cooperation with the industry's leading vendors. The management believes that with the continuous increasing user base and user loyalty, our mobile business is anticipated to delivering more revenue and further pleasant surprises."
First Quarter 2013 Business Highlights
Mobile Internet
Online Games
Recent Developments and Business Outlook
Mobile Internet
Online Games
* Working titles
Financial Highlights:
RMB('000) | 1Q 2013 | 4Q 2012 | 1Q 2012 | QoQ(%) | YoY(%) |
Revenue | 356,725 | 331,046 | 236,975 | 7.8% | 50.5% |
-Online Games | 211,994 | 229,104 | 191,581 | (7.5%) | 10.7% |
-Mobile Internet | 144,731 | 101,942 | 45,394 | 42.0% | 218.8% |
Gross Profit | 310,066 | 296,829 | 208,700 | 4.5% | 48.6% |
GPM | 86.9% | 89.7% | 88.1% | (2.8%) | (1.2%) |
Operating Profit | 128,091 | 120,542 | 72,192 | 6.3% | 77.4% |
Non-GAAP Operating Profit | 175,456 | 138,555 | 81,953 | 26.6% | 114.1% |
Profit (Loss) attributable to the owner of the Company |
111,787 | (157,025) | 55,771 | N/A | 100.4% |
Non-GAAP profit attributable to the owners of the Company |
136,245 | 107,800 | 74,003 | 26.4% | 84.1% |
Profit (Loss) | 116,382 | (157,182) | 55,873 | N/A | 108.3% |
Non-GAAP Profit | 140,840 | 107,643 | 74,105 | 30.8% | 90.1% |
NPM | 32.6% | N/A | 23.6% | N/A | 9.0% |
EPS-Basic (RMB cents) | 22.19 | (31.19) | 10.88 | N/A | 104.0% |
EPS-Diluted (RMB cents) | 16.91 | (30.99) | 10.87 | N/A | 55.6% |
Metrics
Online Games
1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | 4Q 2011 | |
PCU | 445,000 | 521,000 | 525,000 | 582,000 | 600,000 | 612,000 |
ACU | 237,000 | 287,000 | 281,000 | 307,000 | 297,000 | 310,000 |
Non-GAAP Financial Measures
To supplement the consolidated results of the Group prepared in accordance with HKFRSs, the use of certain non-GAAP measures is provided solely to enhance the overall understanding of the Group's current financial performance. These non-GAAP measures are not expressly permitted measures under HKFRSs and may not be comparable to similarly titled measures for other companies. The non-GAAP financial measures of the Group exclude share-based payment expense, interest income on pledged bank deposit, exchange gain on pledged bank deposit, secured bank loan and redeemable convertible preferred shares, net loss on derivative financial instruments and finance costs.
Management Conference Call
NetDragon will host a management conference call and webcast to review its financial results for the first quarter ended March 31, 2013 on Monday, June 3, 2013 Hong Kong time.
Details of the live conference call are as follows:
Time: 7:00 PM Beijing / Hong Kong Time / 7:00 AM Eastern Daylight Time, June 3, 2013
International Toll | 65-6723-9381 |
US Toll Free | 1-866-519-4004 |
Hong Kong Toll Free | 800-930-346 |
China Toll Free (for fixed line users) | 800-819-0121 |
China Toll Free (for mobile users) | 400-620-8038 |
Passcode | NetDragon |
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 "1Q 2013 Results Conference Call" and follow the registration instructions.
About NetDragon
NetDragon Websoft Inc. (HKSE: 0777) 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 and Heroes of Might & Magic Online. We are also China's pioneer in overseas expansion, directly operating titles in overseas markets since 2003 in English, Spanish, Arabic and other languages. In the mobile Internet industry, we provide China's leading marketplace for smartphone users, offering applications and content for the most popular mobile operating systems. NetDragon offers many well-known mobile Internet products and services, including91 Assistant, HiMarket, 91 Launcher, 91 Panda Reader, sj.91.com and www.hiapk.com.
For investor inquiries, please contact:
NetDragon Websoft Inc.
Ms. Maggie Zhou | |
Investor Relations Director | |
Tel.: | +86 591 8754 3120 +86 591 8390 2825 |
Email: | maggie@nd.com.cn; |
ndir@nd.com.cn | |
Website: | www.nd.com.cn/ir |
* * *
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME | ||||||||
FOR THE THREE MONTHS ENDED 31 MARCH 2013 | ||||||||
Three Months Ended | ||||||||
31/3/2013 | 31/12/2012 | 31/3/2012 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||
RMB '000 | RMB '000 | RMB '000 | ||||||
Revenue | 356,725 | 331,046 | 236,975 | |||||
Cost of revenue | (46,659) | (34,217) | (28,275) | |||||
Gross profit | 310,066 | 296,829 | 208,700 | |||||
Other income and gains | 15,217 | 17,536 | 3,770 | |||||
Selling and marketing expenses | (35,510) | (44,220) | (33,487) | |||||
Administrative expenses | (102,822) | (82,883) | (58,911) | |||||
Development costs | (54,660) | (61,992) | (45,786) | |||||
Other expenses | (4,820) | (2,902) | (1,721) | |||||
Share of losses of associates | (393) | (435) | (373) | |||||
Share of profit of a jointly controlled entity | 1,013 | (1,391) | - | |||||
Operating Profit | 128,091 | 120,542 | 72,192 | |||||
Interest income on pledged bank deposit | 1,925 | 2,249 | - | |||||
Exchange (loss) gain on pledged bank deposit, secured bank loan and redeemable convertible preferred shares |
(4,653) | 7,098 | 219 | |||||
Net gain (loss) on derivative financial instruments | 38,360 | (243,611) | (3,961) | |||||
Finance Costs | (12,725) | (12,548) | (4,729) | |||||
Profit (loss) before taxation | 150,998 | (126,270) | 63,721 | |||||
Taxation | (34,616) | (30,912) | (7,848) | |||||
Profit (loss) for the period | 116,382 | (157,182) | 55,873 | |||||
Other comprehensive expenses: | ||||||||
Items that may be reclassified subsequently to profit or loss: |
||||||||
Exchange differences arising on translation of foreign operations |
(112) |
(195) |
(17) |
|||||
Total comprehensive income for the period | 116,270 | (157,377) | 55,856 | |||||
Profit (loss) for the period attributable to: | ||||||||
-Owners of the Company | 111,787 | (157,025) | 55,771 | |||||
-Non-controlling interests | 4,595 | (157) | 102 | |||||
116,382 | (157,182) | 55,873 | ||||||
Total comprehensive income attributable to: | ||||||||
- Owners of the Company | 111,675 | (157,220) | 55,754 | |||||
- Non-controlling interests | 4,595 | (157) | 102 | |||||
116,270 | (157,377) | 55,856 | ||||||
Earnings per share | RMB cents | RMB cents | RMB cents | |||||
- Basic | 22.19 | (31.19) | 10.88 | |||||
- Diluted | 16.91 | (30.99) | 10.87 | |||||
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||||||
(AS AT 31 MARCH 2013) | ||||||||
31 March 2013 | 31 December 2012 | |||||||
(Unaudited) | (Audited) | |||||||
RMB '000 | RMB '000 | |||||||
Non-current assets | ||||||||
Property, plant and equipment | 380,602 | 345,415 | ||||||
Prepaid lease payments | 198,114 | 139,678 | ||||||
Investment property | 16,151 | 16,217 | ||||||
Intangible assets | 2,205 | 2,626 | ||||||
Interests in associates | 5,800 | 11,793 | ||||||
Interests in a jointly controlled entity | 19,028 | 18,015 | ||||||
Available-for-sale investments | 5,000 | 5,000 | ||||||
Loan receivables | 9,812 | 9,969 | ||||||
Goodwill | 12,534 | 12,534 | ||||||
Deferred tax assets | 3,986 | 1,586 | ||||||
653,232 | 562,833 | |||||||
Current assets | ||||||||
Prepaid lease payments | 2,902 | 2,902 | ||||||
Loan receivables | 2,720 | 3,143 | ||||||
Trade receivables | 77,568 | 61,427 | ||||||
Other receivables, prepayments and deposits | 73,007 | 72,101 | ||||||
Held for trading investments | - | 4,939 | ||||||
Amount due from related companies | 3,452 | 3,637 | ||||||
Amount due from a jointly controlled entity | 4,700 | 3,060 | ||||||
Pledged bank deposit | 187,877 | 194,405 | ||||||
Bank deposits | 428,233 | 394,081 | ||||||
Bank balances and cash | 1,292,782 | 1,142,825 | ||||||
2,073,241 | 1,882,520 | |||||||
Current liabilities |
||||||||
Trade and other payables | 252,914 | 222,137 | ||||||
Deferred income | 25,612 | 24,778 | ||||||
Amounts due to related companies | 291 | 121 | ||||||
Amount due to an associate | - | 5,600 | ||||||
Secured bank loan | 182,853 | 183,595 | ||||||
Other financial liability | 5,022 | 10,679 | ||||||
Income tax payable | 71,613 | 66,355 | ||||||
538,305 | 513,265 | |||||||
Net current assets | 1,534,936 | 1,369,255 | ||||||
Total assets less current liabilities | 2,188,168 | 1,932,088 | ||||||
Non-current liabilities |
||||||||
Redeemable convertible preferred shares | - | 195,115 | ||||||
Conversion option derivative liability | - | 314,829 | ||||||
Deferred tax liability | 11,001 | 6,141 | ||||||
11,001 | 516,085 | |||||||
Net assets | 2,177,167 | 1,416,003 | ||||||
Capital and reserves | ||||||||
Share capital | 37,542 | 37,532 | ||||||
Share premium and reserves | 1,678,235 | 1,356,317 | ||||||
Equity attributable to owners of the Company | 1,715,777 | 1,393,849 | ||||||
Non-controlling interests | 461,390 | 22,154 | ||||||
2,177,167 | 1,416,003 | |||||||