Record Quarterly Revenue of RMB 237 million; Net Profit Increased 621.2% Quarter-over-quarter
Mobile Internet Revenue Increased 84.1% Quarter-over-quarter
HONG KONG, May 25, 2012 /PRNewswire-Asia/ -- 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 of 2012 ended 31 March 2012. Additionally, a conference call and live webcast is scheduled at 7:00 PM, May 25, 2012 Hong Kong time (7:00 AM Eastern Daylight Time, May 25) to review the company's performance and recent business developments.
First Quarter 2012 Financial and Operational Highlights
Mr. Liu Dejian, NetDragon's Chairman and Executive Director commented: "During the first quarter, we are delighted with the overall growth of the company, driven by the well-established and smoothly operating online games business as well as the fast-growing mobile internet business. Quarterly revenue hit a historic high of RMB 237.0 million; net profit also increased 621.2% QoQ, laying a solid foundation for the company to achieve 2012 strategic goals.
"Regarding our online games business, after the success of two expansion packs in 2011, Eudemons Online's new Chinese version expansion pack 'Legacy of Asgard' entered its beta testing this March and set a record high in monthly revenue, demonstrating that this classic game is still maintaining its powerful vitality and market appeal. Going forward, we plan to explore further opportunities in the branding and serializing of Eudemons Online. In addition, we've launched the expansion pack 'Invasion of Pirates' for Conquer Online in several foreign languages this quarter, in a move to maintain the appeal of this game in overseas markets."
"In terms of our mobile internet business, we are steadily advancing our strategy of providing a superior yet simple end-user experience as well as offering differentiated content and services, all with the aim of maintaining our leadership position in the mobile marketplace space. So far, we have achieved good results. First quarter revenue increased 84.1% QoQ to RMB45.4 million, and now represented 19.2% of total revenue compared with 11.4% in the previous quarter. By leveraging over a dozen years of R&D experience in various IT fields, we will continue to rapidly roll out mobile games and develop more e-commerce and content-focused verticals. Not only will this support direct monetization of our user base, but it will also spur the growth of mobile advertising and platform distribution revenues. In addition, we recently announced our '91 Win Matrix' cooperative plan, in a move to provide technical, operational, financial and brand cooperation to small and medium-sized developers in a joint effort to build a healthy mobile internet value chain. Going forward, we have full confidence in achieving NetDragon's 2012 overall strategic goals."
First Quarter 2012 Business Highlights
Online Games
Mobile Internet
Recent Developments and Business Outlook
Online Games
Mobile Internet
Financial Highlights:
| RMB('000) | 1Q 2012 | 4Q 2011 | 1Q 2011 | QoQ(%) | YoY(%) |
| Revenue | 236,975 | 217,176 | 156,755 | 9.1% | 51.2% |
| -Online Games | 191,581 | 192,513 | 150,656 | (0.5%) | 27.2% |
| -Mobile Internet Business | 45,394 | 24,663 | 6,099 | 84.1% | 644.3% |
| Gross Profit | 208,700 | 188,839 | 142,212 | 10.5% | 46.8% |
| GPM | 88.1% | 87.0% | 90.7% | 1.1% | (2.6%) |
| Profit for the period | 55,873 | 7,747 | 34,672 | 621.2% | 61.1% |
| NPM | 23.6% | 3.6% | 22.1% | 20.0% | 1.5% |
| EPS-Basic (RMB cents) | 10.88 | 1.53 | 6.57 | 611.1% | 65.6% |
| EPS-Diluted (RMB cents) | 10.87 | 1.53 | 6.57 | 610.5% | 65.4% |
Metrics
Online Games
| 1Q 2012 | 4Q 2011 | 3Q 2011 | 2Q 2011 | 1Q 2011 | 4Q 2010 | |
| PCU | 600,000 | 612,000 | 569,000 | 643,000 | 546,000 | 542,000 |
| ACU | 297,000 | 310,000 | 300,000 | 311,000 | 246,000 | 232,000 |
Management Conference Call
NetDragon will host a management conference call and webcast to review its financial results for the first quarter ended March 31, 2012 on Friday, May 25, 2012 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, May 25, 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) | 800-819-0121 |
| China Toll Free (for mobile users) | 400-620-8038 |
| Passcode | NetDragon |
Replay service is available from 10:00 PM May 25 to 11:59 PM, June 1, 2012 HKT. Below are the replay numbers for different regions. International Toll: 61-2-8235-5000; US Toll Free: 1-866-214-5335; Replay passcode: 80265474. 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 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 91 Panda Reader, 91 PC Suite, 91 Panda Space, sj.91.com and 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 COMPREHENSIVE INCOME | |||||
| FOR THE THREE MONTHS ENDED 31 MARCH 2012 |
|||||
| Three Months Ended |
|||||
| 31/3/2012 | 31/12/2011 | 31/3/2011 | |||
| (Unaudited) | (Unaudited) | (Unaudited)/ (Restated) |
|||
| RMB '000 | RMB '000 | RMB '000 | |||
| Revenue | 236,975 | 217,176 | 156,755 | ||
| Cost of revenue | (28,275) | (28,337) | (14,543) | ||
| Gross profit | 208,700 | 188,839 | 142,212 | ||
| Other income and gains | 3,989 | 17,369 | 9,912 | ||
| Selling and marketing expenses | (33,487) | (46,277) | (25,318) | ||
| Administrative expenses | (58,911) | (59,529) | (46,591) | ||
| Development costs | (45,786) | (47,387) | (40,577) | ||
| Other expenses | (1,721) | (5,047) | (1,885) | ||
| Net loss on derivative financial instruments | (3,961) | (17,582) | - | ||
| Finance costs | (4,729) | (3,490) | - | ||
| Share of losses of associates | (373) | (439) | - | ||
| Profit before taxation | 63,721 | 26,457 | 37,753 | ||
| Taxation | (7,848) | (18,710) | (3,081) | ||
| Profit for the period | 55,873 | 7,747 | 34,672 | ||
| Other comprehensive expense: | |||||
| Exchange differences arising on translation of foreign operations |
(17) | (171) | (172) | ||
| Total comprehensive income for the period | 55,856 | 7,576 | 34,500 | ||
| Profit for the period attributable to: | |||||
| -Owners of the Company | 55,771 | 7,861 | 34,612 | ||
| -Non-controlling interests | 102 | (114) | 60 | ||
| 55,873 | 7,747 | 34,672 | |||
| Total comprehensive income attributable to: | |||||
| - Owners of the Company | 55,754 | 7,690 | 34,440 | ||
| - Non-controlling interests | 102 | (114) | 60 | ||
| 55,856 | 7,576 | 34,500 | |||
| Earnings per share | RMB cents | RMB cents | RMB cents | ||
| - Basic | 10.88 | 1.53 | 6.57 | ||
| - Diluted | 10.87 | 1.53 | 6.57 | ||
| CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (AS AT 31 MARCH 2012) |
|||
| 31 March 2012 | 31 December 2011 | ||
| (Unaudited) | (Audited) | ||
| RMB '000 | RMB '000 | ||
| Non-current assets | |||
| Property, plant and equipment | 195,851 | 192,119 | |
| Prepaid lease payments | 140,682 | 86,298 | |
| Investment property | 15,807 | 15,809 | |
| Deposit paid for acquisition of property, plant and equipment | 36 | 19,050 | |
| Intangible assets | 6,398 | 4,520 | |
| Interests in associates | 12,296 | 12,669 | |
| Available-for-sale investments | 4,000 | 4,000 | |
| Loan receivables | 6,125 | 6,314 | |
| Deferred tax assets | 54 | 54 | |
| 381,249 | 340,833 | ||
| Current assets | |||
| Prepaid lease payments | 2,902 | 1,784 | |
| Loan receivables | 966 | 1,091 | |
| Trade receivables | 33,259 | 41,555 | |
| Other receivables, prepayments and deposits | 49,064 | 41,429 | |
| Amounts due from related companies | 1,598 | 1,200 | |
| Bank deposits | 110,000 | 40,000 | |
| Bank balances and cash | 1,387,418 | 1,428,928 | |
| 1,585,207 | 1,555,987 | ||
| Current liabilities | |||
| Trade payables | 7,040 | 5,001 | |
| Other payables and accruals | 122,025 | 121,353 | |
| Deferred income | 27,286 | 25,528 | |
| Amounts due to related companies | 243 | 965 | |
| Promissory notes | - | 30,623 | |
| Income tax payable | 38,521 | 42,849 | |
| 195,115 | 226,319 | ||
| Net current assets | 1,390,092 | 1,329,668 | |
| Total assets less current liabilities | 1,771,341 | 1,670,501 | |
| Non-current liabilities | |||
| Redeemable convertible preferred shares | 164,916 | 131,675 | |
| Conversion option derivative liability | 46,080 | 39,932 | |
| 210,996 | 171,607 | ||
| Net assets | 1,560,345 | 1,498,894 | |
| Capital and reserves | |||
| Share capital | 38,226 | 38,226 | |
| Share premium and reserves | 1,522,474 | 1,461,126 | |
| Equity attributable to owners of the Company | 1,560,700 | 1,499,352 | |
| Non-controlling interests | (355) | (458) | |
| 1,560,345 | 1,498,894 | ||
