HONG KONG, May 28, 2014 /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, 2014. A conference call and webcast is scheduled for May 28, 2014 at 8:00 pm Hong Kong time (8:00 am U.S. Eastern Time) to review the Company's financial results and recent business developments.
First Quarter 2014 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: "For the first quarter of 2014, total revenue reached RMB217.1million, up 2.4% year on year. For the online game business, the performance of the flagship games remained stable. We introduced several new expansion packs for existing titles to consolidate our domestic market. Also, we strengthened our development in overseas markets in order to cope with the increasingly fierce competition by launching the new expansion pack for English and Arabic versions of 'Conquer Online' to meet the new demand of players for game experiences on the target markets. As a result, revenue from overseas game business grew 23.2% quarter on quarter in the first quarter. Meanwhile, we continued to develop our pipelines of quality online games. 'Caliber of Spirit', NetDragon's first magic-style sports MOBA webgame containing science fiction and fantasy elements, achieved more than 150,000 peak concurrent players with 560,000 daily active players and more than 3,000,000 monthly active players during the testing in May, evidencing the game's popularity."
"We will maintain the stable operation of our existing games, while release more high-quality games and expand our product portfolio to ensure the sustainable growth of our game business."
"Regarding the mobile games business, we strengthened our R&D standards after considering the explosive growth of China's mobile games market since 2014. We put more effort on the mobile games in testing including "Blade & Sword", "Fatal Fight" and "Waku & Maou" in order to stand out from others in such a competitive market after the formal release. In addition, the mobile version of "Eudemons Online", our trial version for migrating players from PC to the mobile platform, is continuously improved and is expected to become a new hit for us in the mobile games market based on the sizable players' base and popularities in the MMORPG segment. Leveraging the wealth of experience we have accumulated over years in operating the overseas markets, we strengthened our effort in development of the overseas mobile game markets. "The Pirate" has gained popularity among the Arabic players in the Middle East and North Africa following the release of an update in Arabic during the first quarter. In addition to the online game business, NetDragon will continue its expansion into both domestic and overseas mobile game markets. We will take the advantages of our competencies and resource to increase the revenue from mobile games and cater the demands of players worldwide in the mobile era."
"For the online education business, we made a steady progress in the first quarter. We will drive on the full implementation of related key strategies with the recent focus on K-12 education. Our agreement with Foxteq and Vision Knight Capital (China) Fund I has given us the advantages in technology, fund and resource for the development of the flagship tablet project designed for students. With the contributions on the R&D, manufacturing and operation by NetDragon and its partners as well as the state-of-the-art design, strict production standard and built-in education resource, we believed that the tablet will provide the users with new interactive learning experience following the formal launch. Meanwhile, the development of a national remote vocational public service system is also under way. We signed the letters of intent with several well established vocational education providers, allowing us to have the first mover advantage in the market. Looking forward, we plan to establish a national lifelong education system based on the mobile Internet platform and complemented by our product series in K-12, vocational, non-academic credential and lifelong education, based on the idea of "gaming, mobile and big data" and the independently developed core technology such as 3D engine. Our management is highly confident the success of NetDragon's online education business."
First Quarter 2014 Business Highlights
Games
- MMO Series
-Mobile Games
Education business
Recent Developments and Business Outlook
Game Business
- MMO Series
-Mobile Games
Education Business
Others
Financial Highlights:
RMB('000) | 1Q 2014 | 4Q 2013 | 1Q 2013 | QoQ (%) | YoY (%) |
Revenue from continuing operations | 217,091 | 229,001 | 211,994 | (5.2%) | 2.4% |
Gross profit from continuing operations | 196,007 | 205,931 | 192,328 | (4.8%) | 1.9% |
Gross profit margin from continuing operations | 90.3% | 89.9% | 90.7% | 0.4% | (0.4%) |
Operating profit (loss) from continuing | 114,415 | (1,707) | 61,276 | N/A | 86.7% |
Non-GAAP operating profit from continuing and discontinued operations | 121,146 | 11,336 | 175,456 | 968.7% | (31.0%) |
Profit (loss) from continuing operations | 77,753 | (2,732) | 53,856 | N/A | 44.4% |
Non-GAAP profit (loss) from continuing and discontinued operations | 83,104 | (5,421) | 140,840 | N/A | (41.0%) |
Profit from continuing and discontinued operations attributable to owners of the Company | 79,662 | 5,807,145 | 111,787 | (98.6%) | (28.7%) |
Non-GAAP profit (loss) from continuing and discontinued operations attributable to owners of the Company | 85,013 | (7,507) | 136,245 | N/A | (37.6%) |
Basic earnings (loss) per share from continuing operations (RMB cents) | 15.70 | (0.95) | 10.71 | N/A | 46.6% |
Diluted earnings (loss) per share from continuing operations(RMB cents) | 15.61 | (0.95) | 10.63 | N/A | 46.8% |
Metrics
Online Games
1Q 2014 | 4Q 2013 | 3Q 2013 | 2Q 2013 | 1Q 2013 | 4Q 2012 | 3Q 2012 | |
PCU | 472,000 | 477,000 | 510,000 | 468,000 | 445,000 | 521,000 | 525,000 |
ACU | 239,000 | 266,000 | 270,000 | 255,000 | 237,000 | 287,000 | 281,000 |
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 payments expense, interest income on pledged bank deposit, exchange gain (loss) on pledged bank deposit, secured bank borrowing and redeemable convertible preferred shares, net gain (loss) on derivative financial instruments, finance costs and profit on disposal of subsidiaries (net of related income tax).
Management Conference Call
NetDragon will host a management conference call and webcast to review its first quarter 2014 financial results ended March 31, 2014 on Wednesday, May 28, 2014, at 8pm Hong Kong time.
Details of the live conference call are as follows:
Time: 8:00 PM Beijing / Hong Kong Time / 8:00 AM Eastern Standard Time, May 28, 2014
International Toll | 65-6723-9381 |
US Toll Free | 1-866-519-4004 |
Hong Kong Toll Free | 800-930-346 |
Mainland China Toll Free (for fixed line users) | 800-8190-121 |
Mainland China Toll Free (for mobile users) | 400-6208-038 |
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 2014 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 "Zero Online". Meanwhile, leveraging our years of experience in R&D and operation of games, we have successively launched a variety of mobile games, including "Warring States", "War of Gods" and "Crazy Horde". We are also China's pioneer in overseas expansion, directly operating titles in overseas markets since 2003 in English, Spanish, Arabic and other languages. NetDragon has proven track record in incubating online gaming and mobile Internet projects over the years, including the No. 1 Chinese online game portal - 17173.com, and the China's biggest and most influential smartphone service platform - 91 Wireless.
For investor enquiries, please contact:
NetDragon Websoft Inc.
Ms. Maggie Zhou
Senior Director of Investor Relations
Tel.: +86 591 8754 3120
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 2014 | |||||
Three Months Ended | |||||
31/03/2014 | 31/12/2013 | 31/03/2013 | |||
(Unaudited) |
(Unaudited) | (Unaudited and restated) | |||
RMB '000 | RMB '000 | RMB '000 | |||
Continuing operations | |||||
Revenue | 217,091 | 229,001 | 211,994 | ||
Cost of revenue | (21,084) | (23,070) | (19,666) | ||
Gross profit | 196,007 | 205,931 | 192,328 | ||
Other income and gains | 47,348 | 14,687 | 13,536 | ||
Selling and marketing expenses | (29,130) | (31,692) | (23,467) | ||
Administrative expenses | (56,875) | (140,882) | (83,709) | ||
Development costs | (40,954) | (44,469) | (35,489) | ||
Other expenses | (1,893) | (5,290) | (1,920) | ||
Share of (losses) profit of associates | (88) | 8 | (3) | ||
Operating profit (loss) | 114,415 | (1,707) | 61,276 | ||
Interest income on pledged bank deposit | 841 | 840 | 1,925 | ||
Exchange (loss) gain on pledged bank deposit and secured bank borrowing | (4,163) | 4,465 | (5,786) | ||
Net gain (loss) on derivative financial instrument | 4,726 | (3,122) | 5,656 | ||
Gain on disposal of available-for-sale investment | - | 5,761 | - | ||
Net gain on held for trading investment | 1,093 | 8,756 | - | ||
Finance costs | (1,117) | (968) | (1,850) | ||
Profit before taxation | 115,795 | 14,025 | 61,221 | ||
Taxation | (38,042) | (16,757) | (7,365) | ||
Profit (loss) for the period from continuing operations | 77,753 | (2,732) | 53,856 | ||
Discontinued operations | |||||
Profit for the period from discontinued operations | - | 5,811,963 | 62,526 | ||
Profit for the period | 77,753 | 5,809,231 | 116,382 | ||
Other comprehensive income (expense) for the period, net of income tax to profit or loss: | |||||
Exchange differences arising on translation of foreign operations that may be reclassified subsequently to profit or loss |
553 |
(338) |
(112) | ||
Total comprehensive income for the period | 78,306 | 5,808,893 | 116,270 | ||
Profit(loss) for the period attributable to: | |||||
-Owners of the Company | 79,662 | 5,807,145 | 111,787 | ||
-Non-controlling interests | (1,909) | 2,086 | 4,595 | ||
77,753 | 5,809,231 | 116,382 | |||
Profit (loss) for the period attributable to owners of the Company: | |||||
-from continuing operations | 79,662 | (4,818) | 53,938 | ||
-from discontinued operations | - | 5,811,963 | 57,849 | ||
Profit for the period attributable to owners of the Company: |
79,662 |
5,807,145 |
111,787 | ||
Loss(profit) for the period attributable to non-controlling interests: | |||||
-from continuing operations | (1,909) | 2,086 | (82) | ||
-from discontinued operations | - | - | 4,677 | ||
Loss(profit) for the period attributable to non-controlling interests |
(1,909) |
2,086 |
4,595 | ||
Total comprehensive income (expense) attributable to: | |||||
-Owners of the Company | 80,215 | 5,806,807 | 111,675 | ||
-Non-controlling interests | (1,909) | 2,086 | 4,595 | ||
78,306 | 5,808,893 | 116,270 | |||
RMB cents | RMB cents | RMB cents | |||
Earnings per share | |||||
From continuing and discontinued operations | |||||
-Basic | 15.70 | 1,145.41 | 22.19 | ||
-Diluted | 15.61 | 1,138.30 | 16.91 | ||
From continuing operations | |||||
-Basic | 15.70 | (0.95) | 10.71 | ||
-Diluted | 15.61 | (0.95) | 10.63 |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2014 | |||
31 March 2014 (Unaudited) RMB '000 | 31 December 2013 (Audited) RMB '000 | ||
Non-current assets | |||
Property, plant and equipment | 653,241 | 532,684 | |
Prepaid lease payments | 185,376 | 185,819 | |
Investment property | 15,861 | 15,725 | |
Interests in associates | 2,219 | 1,299 | |
Available-for-sale investments | 5,000 | 5,000 | |
Loan receivables | 14,111 | 16,041 | |
Deposits made for acquisition of property, plant and equipment | 54,766 | 16,769 | |
Other receivable | 61,521 | 60,969 | |
Goodwill | 12,534 | 12,534 | |
Deferred tax assets | 54 | 54 | |
1,004,683 | 846,894 | ||
Current assets | |||
Prepaid lease payments | 2,583 | 2,583 | |
Loan receivables | 461 | 713 | |
Trade receivables | 44,013 | 41,718 | |
Other receivables, prepayments and deposits | 72,835 | 69,770 | |
Held for trading investment | 21,828 | 20,735 | |
Amounts due from related companies | 3,076 | 4,564 | |
Amounts due from associates | 9 | - | |
Other financial asset | 1,604 | - | |
Pledged bank deposit | 108,340 | 107,368 | |
Bank deposits | 2,983,317 | 3,051,289 | |
Bank balances and cash | 1,339,205 | 1,304,355 | |
4,577,271 | 4,603,095 | ||
Current liabilities | |||
Trade and other payables | 274,196 | 152,837 | |
Deferred income | 24,019 | 26,553 | |
Amount due to an associate | 135 | - | |
Secured bank borrowing | 109,807 | 104,672 | |
Other financial liability | - | 3,122 | |
Income tax payable | 471,361 | 539,927 | |
879,518 | 827,111 | ||
Net current assets | 3,697,753 | 3,775,984 | |
Total assets less current liabilities | 4,702,436 | 4,622,878 | |
Non-current liability | |||
Other payables | 2,248 | - | |
Net assets | 4,700,188 | 4,622,878 | |
Capital and reserves | |||
Share capital | 37,665 | 37,664 | |
Share premium and reserves | 4,660,686 | 4,577,478 | |
Equity attributable to owners of the Company | 4,698,351 | 4,615,142 | |
Non-controlling interests | 1,837 | 7,736 | |
4,700,188 | 4,622,878 |