HONG KONG, Aug. 25 /PRNewswire-Asia/ -- NetDragon Websoft Inc. ("NetDragon", with its subsidiaries collectively the "Group"; Stock Code: 777), a leading online game developer and operator in China, today announced its Interim 2009 unaudited financial results for the six-month period ended 30 June 2009. NetDragon will host a management conference call and webcast to review its results and recent developments, at 9:00am Hong Kong Time 26 August 2009, which corresponds to 9:00pm of 25 August Eastern Daylight Time.
1H 2009 Business Highlights
-- Launched "Way of the Five" in March 2009
-- Launched "The Warlords", the English version of "Tou Ming Zhuang
Online", in April 2009
-- Released Expansion Packs (EPs) for "Eudemons Online" and "Zero
Online", in various languages including English
-- "Zero Online" launched in Thailand and Vietnam markets by local
licensees in early 2009.
-- Licensed the right to develop and operate a new version of "Ultima
Online" in collaboration with Electronic Arts' Mythic Entertainment
-- Conducted closed-beta tests for "Tian Yuan" and "Disney Fantasy
Online"
-- Continued to witness healthy demand for in-house developed mobile
software applications, such as "Panda Reader" and "91 Assistant", with
which NetDragon is targeting China's emerging smart-phone users
-- Continued to develop and offer the Chinese audience a diverse array of
internet products and services via our integrated internet portal
"91.com"
-- Continued to recruit skilled managers and developers to raise the
overall production capacity and product quality of our Group's online
game offerings, software applications, and other multimedia
initiatives
Recent Developments
-- Launched "Gold Edition: Heroes of Might and Magic Online" in July 2009
-- Recognized as the "Most Valuable Enterprise in China's Online Game
Industry over the Past Ten Years" at the Ten-Year China Online Game
Industry Award Ceremony in July 2009
-- Released Expansion Pack (EP) for "Conquer Online" in English in July
and Spanish in August
Chairman's Statement
Mr. Liu Dejian, Chairman and Executive Director of NetDragon, commented: "As we approach the 10th Anniversary of NetDragon's establishment, I am delighted with the progress and achievements attained by our Group. Since establishment, we have embarked on an R&D-focused mission to innovate and offer game aficionados and internet users entertaining, informative and practical products to enhance their lives. By focusing on creating our own IP, we were early-movers at home and able to make pioneering advances directly into overseas markets since 2004. These collective experiences have endowed NetDragon with the awareness and wherewithal to continue to successfully leverage our proprietary products at home and in various markets worldwide."
Mr. Liu concluded: "10 years into our mission, the 'future' as we imagined it in 1999 is now upon us all, and an even brighter and
opportunity-laden future in online games and multimedia lies ahead. We have been investing in people and infrastructure over the past few years, thereby raising our R&D capacity and improving quality, as marked by numerous game launches, EPs and other product releases. As more and diversified content and products reach maturity, the direct monetization and cross-promotional potential is immense. We look forward to growing our product offerings and customer base in the years to come."
Business Outlook
-- We commenced closed beta testing for "Tian Yuan" and "Disney Fantasy
Online" and expect both titles to launch in 2009. Games in the
pipeline also include "CJ7 Online" "Dungeon Keeper Online", and a new
version of "Ultima Online", among others.
-- We will continue to pursue myriad opportunities to create online games
and online experiences based upon popular third-party intellectual
property.
-- We will continue to take a two-pronged approach to expanding overseas
by directly operating localized games as well as licensing abroad.
NetDragon expects to remain at the fore amongst China's online gaming
companies in expanding beyond the home market.
-- We will continue to enhance our production capabilities by
streamlining our integrated model of operation, strengthen marketing
efforts and channels management, and expand our product mix, in order
to extend the life span of existing games and successfully debut new
games.
-- We will continue to closely monitor our cost structure and implement
cost control procedures as deemed necessary, in order to raise
organizational productivity, while remaining ever cognizant of our
need to invest in future growth opportunities.
Management Conference Call
Dial-in details for the live conference call are as follows:
International Dial-In +1 617 786 2961
US Toll free +1 800 901 5231
HK Toll free +800 96 3844
South China Toll free 10 800 130 0399
North China Toll free 10 800 152 1490
Participant Code 77179327
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.us/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 "2009 Interim Results Investor Conference Call" and follow the registration instructions. The archived webcast will be available for one year from the date of the original conference call.
Non-HKFRSs Financial Measures
To supplement the financial measures prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs"), this press release includes
non-HKFRSs financial measures of normalized profit and normalized profit per share, which excludes the impact of government grants and tax refunds. The Group believes these non-HKFRSs financial measures are important to help investors to understand the Group's current financial performance and future prospects, compare business trends among different reporting periods on a consistent basis and access the Company's core operating results. These non-HKFRSs financial measures should be considered in addition to financial measures prepared in accordance with HKFRSs, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with HKFRSs.
About NetDragon
NetDragon Websoft Inc. is one of the leading online game developers and operators in the PRC. The Group's game portfolio comprises a range of MMORPGs (Massively Multiplayer Online Role-Playing Games) that cater to various types of players and gaming preferences. The Group has successfully developed and marketed many popular online titles of various styles. Its current offerings include the games Way of the Five, Eudemons Online, Conquer Online, Zero Online, and Heroes of Might and Magic Online, among others. Some games are available in foreign languages, including English, French and Spanish. The Group also has several games currently in development, including Tian Yuan, Disney Fantasy Online, CJ7 Online, Dungeon Keeper Online and Ultima Online.
Financial Highlights (unaudited)
(RMB Millions) 2Q 2009 1Q 2009 QoQ 1H 2009 1H 2008 YoY
Revenue 162.9 173.9 -6.3% 336.8 322.9 4.3%
Gross Profit 140.9 155.0 -9.1% 296.0 290.5 1.9%
GPM 86.5% 89.1% 87.9% 90.0%
Profit for the
period 17.6 48.8 -63.9% 66.4 115.2 -42.4%
NPM 10.8% 28.1% 19.7% 35.7%
Basic EPS
(RMB cents) 3.32 9.31 -64.3% 12.63 21.21 -40.5%
Normalized
Profit(1) (RMB) 16.1 48.9 -67.1% 65.1 114.0 -42.9%
Normalized Profit
per share(1)
(RMB cents) 3.07 9.31 -67.0% 12.38 20.99 -41.0%
Interim Dividend
per share
(HKD) -- -- -- 0.082 0.100 -18%
(1) Non-HKFRSs presentation excluding government grants and income tax
refund.
Metrics
2Q2009 1Q2009 4Q2008 3Q2008 2Q2008 1Q2008
PCU 632,000 695,000 591,000 544,000 697,000 669,000
ACU 310,000 333,000 317,000 311,000 355,000 313,000
Note: Online games include Conquer Online, Eudemons Online, Zero Online,
Tou Ming Zhuang Online, Heroes of Might and Magic Online, Way of
the Five and other games.
Consolidated Income Statement for the six months ended 30 June 2009
Six months ended 30 June
2009 2008
(Unaudited) (Unaudited)
RMB'000 RMB'000
Revenue 336,769 322,897
Cost of revenue -40,806 -32,401
Gross profit 295,963 290,496
Other revenue and gains 29,818 15,781
Selling and marketing expenses -67,195 -44,240
Administrative expenses -80,518 -62,313
Development costs -87,769 -35,630
Other operating expenses -15,591 -19,295
Share of losses of associates -724 -
Profit before income tax 73,984 144,799
Income tax expense -7,592 -29,606
Profit for the period 66,392 115,193
Profit/(loss) for the period
attributable to:
Owners of the Company 66,392 115,305
Non-controlling interests -- -112
66,392 115,193
RMB cents RMB cents
Earnings per share
- Basic 12.63 21.21
- Diluted 12.62 N/A
Consolidated Statement of Financial Position as at 30 June 2009
At 30 June At 31 December
2009 2008
(Unaudited) (Audited)
RMB'000 RMB'000
ASSETS AND LIABILITIES
Non-current assets
Property, plant and equipment 108,981 96,160
Land use rights 13,178 7,362
Deposit paid for acquisition of property,
plant and equipment -- 7,357
Intangible assets 11,087 10,754
Interests in associates -- 224
Available-for-sale financial asset 4,000 4,000
Loan receivables 6,480 6,835
Deferred tax assets 54 54
143,780 132,746
Current assets
Loan receivables 551 440
Trade and other receivables,
prepayments and deposits 77,530 81,990
Financial assets at fair value through
profit or loss -- 311,806
Derivative financial instruments -- 31,857
Loan to associates 26,000 --
Tax recoverable 77 108
Term deposits with initial term of over
three months 525,087 629,454
Cash and cash equivalents 786,272 332,009
1,415,517 1,387,664
Current liabilities
Trade and other payables, accruals and
deferred income 73,799 53,677
Income tax payable 14,097 12,922
87,896 66,599
Net current assets 1,327,621 1,321,065
Total assets less current liabilities 1,471,401 1,453,811
Non-current liability
Deferred tax liability 799 --
Net assets 1,470,602 1,453,811
EQUITY
Share capital 39,264 39,264
Reserves 1,431,338 1,414,547
Equity attributable to owners of the
Company/Total equity 1,470,602 1,453,811
