omniture

NetDragon Websoft Inc. Announces 2012 Third Quarter Results

2012-11-23 17:00 2192

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

  • Total Revenues* were RMB290.1 million, an increase of 11.7% over the second quarter of 2012 ("QoQ") and an increase of 43.8% over the third quarter of 2011 ("YoY");
  • Revenue from Online Games was RMB204.0 million, an increase of 1.5% QoQ and an increase of 11.2% YoY;
  • Revenue from Mobile Internet* was RMB86.1 million, an increase of 46.2% QoQ and an increase of 370.9% YoY;
  • Gross profit was RMB252.8 million, an increase of 8.2% QoQ and an increase of 36.9% YoY;
  • Operating profit was RMB127.0 million, an increase of 43.8% QoQ and an increase of 114.9% YoY;
  • Profit attributable to Owners of the Company was RMB95.4 million, an increase of 111.8% QoQ and an increase of 91.7% YoY;
  • Pro Forma Net Profit was RMB117.6 million, an increase of 71.2% QoQ and an increase of 133.4% YoY;
  • Basic earnings per share ("EPS") were RMB18.95 cents, while diluted earnings per share were RMB18.87 cents;
  • Peak concurrent users ("PCU") for online games were 525,000, a decrease of 9.8% QoQ and a decrease of 7.7% YoY;
  • Average concurrent users ("ACU") for online games were 281,000, a decrease of 8.5% QoQ and a decrease of 6.3% YoY;
  • Total users of 91 Assistant were 127 million, an increase of 27.2% QoQ and an increase of 253.4% YoY;
  • Total users of HiMarket exceeded 48 million, an increase of 57.5% QoQ and an increase of 599.7% YoY.

* 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

  • "91 Assistant", NetDragon's applications distribution platform for all mainstream operating systems, reached 127 million total users. Total users for "HiMarket", NetDragon's Android applications distribution platform, exceeded 48 million.
  • Total apps and content exceeded 700,000 and aggregate downloads surpassed 9.5 billion, which ranks NetDragon as China's largest mobile applications distribution platform.
  • 91 Open Mobile Platform launched more than 300 mobile games, with total registered users exceeding 9 million.
  • 91 DeNA, the joint venture between 91 Mobile and Japan's largest mobile social gaming platform operator DeNA Co., Ltd., launched its first self-developed game "Legend of Cavalry" and localized titles including "Fantasica", "Emblem of the Gods" and "Rites of Delta".

Online Games

  • Eudemons Online's new Chinese EP was officially launched.
  • Disney Fantasy Online's new EPs were launched in August and September 2012, respectively.
  • The Arabic version of "DDTank" for which NetDragon serves as an agent, officially launched its open beta testing on September 20.

Recent Developments and Business Outlook

Mobile Internet

  • 91 Limited and China's leading TMT social media DoNews jointly held "Symposium on Trend of Mobile applications on Android Platform & 2012 First China Android Business Summit", aiming to build an Android ecosystem in China.
  • NetDragon launched its quarterly report titled "Trend of Mobile Applications on 91 Mobile Internet" in a move to provide macro data that assists mobile developers and advertisers.

Online Games

  • New expansion packs for "Heroes of Might and Magic Online" and "Tou Ming Zhuang Online" are scheduled for the fourth quarter of 2012.
  • NetDragon's 2.5D MMORPG "Crazy Tribes" set in an ancient era underwent its closed beta testing in September 2012 and is scheduled for its first open beta testing in November 2012.

Others

  • As of September 30, 2012, "91 Application Center for Children" exceeded 35 million totaled aggregate downloads, on which over 4000 applications are available for kids created by developers both in and outside of China. Android version of the Center will be introduced this year.

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
translation of foreign operations

 

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

 



Source: NetDragon Websoft Inc.
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