HONG KONG, Nov. 23, 2012 /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 unaudited financial results for the third quarter ended September 30, 2012. A conference call and webcast is scheduled for November 23, 2012 at 7:00 pm Hong Kong time (6:00 am ET, November 23) to review the company's financial results and recent business developments.
Third Quarter 2012 Financial and Operational Highlights
| * The company has revisited the accounting policies of its mobile Internet business, and determined to present 91 mobile platform revenues derived from third party apps and content with cooperation partners on a net basis instead of gross basis. Management believes this will result in more relevant information about the core financial and operational performance of the mobile internet segment. Restated revenue figures net of cooperation fee for prior reporting periods are provided below |
Mr. Liu Dejian, Chairman and Executive Director of NetDragon, commented "In the third quarter of 2012, NetDragon maintained stability in online games and robust growth in mobile internet business. Total revenues hit a new high, growing 11.7% quarter-over-quarter to RMB290.1 million; net profit grew 111.8% quarter-over-quarter.
"Our revenue from online games increased approximately 1.5% quarter-over-quarter,aided by release of an expansion pack for Eudemons Online in September. As the traditional online games market matures, we will continue to support our flagship titles but shift our emphasis towards mobile and web games production. We believe that the increasingly enriched product portfolio will help our company maintain solid growth in online games going forward.
"Our mobile internet business maintained its industry-leading position, increasing its revenue by 46.2% quarter-over-quarter. After focusing primarily on user acquisition since our mobile platform's inception in 2008, we now see our business entering a period of fast-growing monetization. Moreover, we are excited about our leadership role in the mobile internet world, and wholeheartedly accept the challenges and opportunities that lie ahead in fashioning a healthy and dynamic win-win mobile internet ecosystem in China and beyond."
Third Quarter 2012 Business Highlights
Mobile Internet
Online Games
Recent Developments and Business Outlook
Mobile Internet
Online Games
Others
Financial Highlights:
| RMB('000) |
3Q 2012 |
2Q 2012 |
3Q 2011 |
QoQ(%) |
YoY(%) |
| Revenue (Restated) |
290,144 |
259,849 |
201,812 |
11.7% |
43.8% |
| -Online Games |
204,067 |
200,992 |
183,533 |
1.5% |
11.2% |
| -Mobile Internet (Restated) |
86,077 |
58,857 |
18,279 |
46.2% |
370.9% |
| Gross Profit |
252,786 |
233,675 |
184,696 |
8.2% |
36.9% |
| GPM |
87.1% |
89.9% |
91.5% |
-2.8% |
-4.4% |
| Operating Profit |
126,958 |
88,289 |
59,077 |
43.8% |
114.9% |
| Net Profit |
95,285 |
44,986 |
49,854 |
111.8% |
91.1% |
| Pro Forma Net Profit |
117,580 |
68,683 |
50,380 |
71.2% |
133.4% |
| NPM |
32.8% |
17.3% |
24.7% |
15.5% |
8.1% |
| EPS-Basic (RMB cents) |
18.95 |
8.75 |
9.48 |
116.6% |
99.9% |
| EPS-Diluted (RMB cents) |
18.87 |
8.73 |
9.48 |
116.2% |
99.1% |
* Restated Revenue Figures
| RMB ('000) |
2Q 2012 |
1Q 2012 |
4Q 2011 |
3Q 2011 |
2Q 2011 |
1Q 2011 |
| Total Revenues (Unrestated) |
276,133 |
236,975 |
217,176 |
202,739 |
184,304 |
156,755 |
| Total Revenues (Restated) |
259,849 |
227,310 |
212,171 |
201,812 |
184,642 |
156,904 |
| Mobile Internet Revenue (Unrestated) |
75,141 |
45,394 |
24,663 |
19,206 |
9,441 |
6,099 |
| Mobile Internet Revenue (Restated) |
58,857 |
35,729 |
19,658 |
18,279 |
9,779 |
6,248 |
Metrics
Online Games
| 3Q 2012 |
2Q 2012 |
1Q 2012 |
4Q 2011 |
3Q 2011 |
2Q 2011 |
|
| PCU |
525,000 |
582,000 |
600,000 |
612,000 |
569,000 |
643,000 |
| ACU |
281,000 |
307,000 |
297,000 |
310,000 |
300,000 |
311,000 |
Pro Forma Financial Measures
To supplement the consolidated results prepared in accordance with Hong Kong Financial Reporting Standards, certain pro forma financial measures, namely Pro Forma Net Profit, have been presented in this press release. These unaudited pro forma financial measures should be considered in addition to, not as a substitute for, measures of the Group's financial performance prepared in accordance with HKFRS. In addition, these pro forma financial measures may be defined differently from similar terms used by other companies.
Management believes that the pro forma financial measures provide investors with useful supplementary information to assess the performance of the Group's core operations by excluding certain non-cash items, namely valuation loss on derivative financial instruments and finance costs, on a non-tax adjusted basis, both items associated with convertible preferred shares and promissory notes issued by a subsidiary.
Management Conference Call
NetDragon will host a management conference call and webcast to review its financial results for the third quarter ended September 30, 2012 on Friday, November 23, 2012 Hong Kong time.
Details of the live conference call are as follows:
Time: 7:00 PM Beijing / Hong Kong Time / 6:00 AM Eastern Standard Time, November 23, 2012
| 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) |
800-8190-121 |
| China Toll Free (for mobile users) |
400-6208-038 |
| Passcode |
NetDragon |
Replay service is available from 10:00 PM November 23 to 08:59 PM December 1, 2012 HKT. Below are the replay numbers for different regions. International Toll: 61-2-8199-0299; US Toll Free: 1-855-4525-696; Replay passcode: 68454378. 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 "3Q 2012 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, including sj.91.com, www.hiapk.com, 91 Assistant, HiMarket, 91 Panda Reader and 91 Panda Home.
For investor inquiries, please contact:
NetDragon Websoft Inc.
Ms. Maggie Zhou
Investor Relations Director
Tel.: +86 591 8754 3120
+86 591 8390 2825
Email: ndir@nd.com.cn
Website: www.nd.com.cn/ir
| CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
|||||
| FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2012 |
|||||
| Three Months Ended |
|||||
| 30/9/2012 |
30/6/2012 |
30/9/2011 |
|||
| (Unaudited) |
(Unaudited |
(Unaudited |
|||
| /Restated) |
/Unrestated) |
||||
| RMB '000 |
RMB '000 |
RMB '000 |
|||
| Revenue |
290,144 |
259,849 |
202,739 |
||
| Cost of revenue |
(37,358) |
(26,174) |
(18,043) |
||
| Gross profit |
252,786 |
233,675 |
184,696 |
||
| Other income and gains |
17,322 |
11,397 |
5,303 |
||
| Selling and marketing expenses |
(37,388) |
(37,078) |
(34,310) |
||
| Administrative expenses |
(51,564) |
(54,270) |
(56,373) |
||
| Development costs |
(46,231) |
(50,164) |
(36,280) |
||
| Other expenses |
(7,604) |
(14,986) |
(3,894) |
||
| Share of losses of associates |
(363) |
(285) |
(65) |
||
| Operating Profit |
126,958 |
88,289 |
59,077 |
||
| Interest income on pledged bank deposit |
2,600 |
- |
- |
||
| Exchange gain (loss) on pledged bank deposit, secured bank loan and redeemable convertible preference shares |
6,234 |
(1,642) |
427 |
||
| Net loss on derivative financial instruments |
(15,474) |
(19,378) |
(210) |
||
| Finance costs |
(6,821) |
(4,319) |
(316) |
||
| Profit before taxation |
113,497 |
62,950 |
58,978 |
||
| Taxation |
(18,212) |
(17,964) |
(9,124) |
||
| Profit for the period |
95,285 |
44,986 |
49,854 |
||
| Other comprehensive income (expense): |
|||||
| Exchange differences arising on |
59 |
89 |
(734) |
||
| Total comprehensive income for the period |
95,344 |
45,075 |
49,120 |
||
| Profit for the period attributable to: |
|||||
| -Owners of the Company |
95,399 |
45,032 |
49,771 |
||
| -Non-controlling interests |
(114) |
(46) |
83 |
||
| 95,285 |
44,986 |
49,854 |
|||
| Total comprehensive income attributable to: |
|||||
| - Owners of the Company |
95,458 |
45,121 |
49,037 |
||
| - Non-controlling interests |
(114) |
(46) |
83 |
||
| 95,344 |
45,075 |
49,120 |
|||
| RMB cents |
RMB cents |
RMB cents |
|||
| Earnings per share |
|||||
| - Basic |
18.95 |
8.75 |
9.48 |
||
| - Diluted |
18.87 |
8.73 |
9.48 |
||
| CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (AS AT 30 SEPTEMBER 2012) |
|||
| 30 September 2012 |
31 December 2011 |
||
| (Unaudited) |
(Audited) |
||
| RMB '000 |
RMB '000 |
||
| Non-current assets |
|||
| Property, plant and equipment |
261,116 |
192,119 |
|
| Prepaid lease payments |
140,042 |
86,298 |
|
| Investment property |
16,111 |
15,809 |
|
| Deposit paid for acquisition of property, plant and equipment |
- |
19,050 |
|
| Intangible assets |
4,000 |
4,520 |
|
| Interests in associates |
12,148 |
12,669 |
|
| Long-term deposit |
3,600 |
- |
|
| Available-for-sale investments |
5,000 |
4,000 |
|
| Loan receivables |
8,893 |
6,314 |
|
| Deferred tax assets |
54 |
54 |
|
| 450,964 |
340,833 |
||
| Current assets |
|||
| Prepaid lease payments |
2,902 |
1,784 |
|
| Loan receivables |
3,894 |
1,091 |
|
| Trade receivables |
81,469 |
41,555 |
|
| Other receivables, prepayments and deposits |
46,484 |
41,429 |
|
| Held for trading investment |
5,000 |
- |
|
| Amount due from related companies |
2,499 |
1,200 |
|
| Pledged bank deposit |
191,387 |
- |
|
| Bank deposits |
173,358 |
40,000 |
|
| Bank balances and cash |
1,271,289 |
1,428,928 |
|
| 1,778,282 |
1,555,987 |
||
| Current liabilities |
|||
| Trade payables |
31,154 |
5,001 |
|
| Other payables and accruals |
108,955 |
121,353 |
|
| Deferred income |
32,881 |
25,528 |
|
| Amount due to a related company |
- |
965 |
|
| Secured bank loan |
185,174 |
- |
|
| Other financial liability |
6,183 |
- |
|
| Promissory notes |
- |
30,623 |
|
| Income tax payable |
42,724 |
42,849 |
|
| 407,071 |
226,319 |
||
| Net current assets |
1,371,211 |
1,329,668 |
|
| Total assets less current liabilities |
1,822,175 |
1,670,501 |
|
| Non-current liabilities |
|||
| Redeemable convertible preferred shares |
174,979 |
131,675 |
|
| Conversion option derivative liability |
75,135 |
39,932 |
|
| 250,114 |
171,607 |
||
| Net assets |
1,572,061 |
1,498,894 |
|
| Capital and reserves |
|||
| Share capital |
37,511 |
38,226 |
|
| Share premium and reserves |
1,508,763 |
1,461,126 |
|
| Equity attributable to owners of the Company |
1,546,274 |
1,499,352 |
|
| Non-controlling interests |
25,787 |
(458) |
|
| 1,572,061 |
1,498,894 |
||
