Ctrip Reports Unaudited Second Quarter 2014 Financial Results - WDAM - TV 7 - News, Weather and Sports

Ctrip Reports Unaudited Second Quarter 2014 Financial Results

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SOURCE Ctrip.com International, Ltd.

SHANGHAI, July 30, 2014 /PRNewswire/ -- Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China ("Ctrip" or the "Company"), today announced its unaudited financial results for the quarter ended June 30, 2014.

Highlights for the Second Quarter of 2014

  • Net revenues were RMB1.7 billion (US$278 million) for the second quarter of 2014, up 38% year-on-year, exceeding our net revenue guidance for the second quarter 2014 of 30-35% increase year-on-year.
  • Accommodation reservation revenues increased 47% year-on-year, reaching RMB753 million (US$121 million) for the second quarter of 2014, and accommodation reservation volume increased 64% year-on-year, exceeding our guidance of 50-60% volume increase year-on year.
  • Transportation ticketing revenues increased 39% year-on-year, reaching RMB726 million (US$117 million) for the second quarter of 2014, and transportation ticketing volume increased 83% year-on-year, exceeding our guidance of 50-60% volume increase year-on year.
  • Gross margin was 72% for the second quarter of 2014, compared to 75% in the same period in 2013, and remained consistent with that in the previous quarter.
  • Income from operations was RMB91 million (US$15 million) for the second quarter of 2014, down 54% year-on-year. Excluding share-based compensation charges (non-GAAP), income from operations was RMB202 million (US$33 million), down 34% year-on-year.
  • Operating margin was 5% for the second quarter of 2014, compared to 16% in the same period in 2013 and 4% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 12%, compared to 25% in the same period in 2013, and remained consistent with that in the previous quarter.
  • Net income attributable to Ctrip's shareholders was RMB135 million (US$22 million) for the second quarter of 2014, down 36% year-on-year. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB246 million (US$40 million), down 23% year-on-year. 
  • Diluted earnings per ADS were RMB0.88 (US$0.14) for the second quarter of 2014. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB1.58 (US$0.26) for the second quarter of 2014.
  • Share-based compensation charges were RMB111 million (US$18 million), accounting for 6% of the net revenues, or RMB0.7 (US$0.12) per ADS for the second quarter of 2014.

"We have continued to maintain an accelerated growth rate in the second quarter of 2014," said James Liang, Chairman and Chief Executive Officer of Ctrip. "Both accommodation reservation and transportation ticketing services achieved strong volume growth at 64% and 83% year-over-year respectively. During the second quarter of 2014, approximately 80% of Ctrip's total transactions were booked online or through mobile channels. Ctrip has successfully built an industry-leading mobile travel platform by offering travelers the most comprehensive products with the most competitive prices and the best user experience. The number of Ctrip Mobile App downloads has reached 200 million, growing at a rate of 60% quarter-over-quarter. Total mobile transaction value for the second quarter of 2014 more than tripled from a year ago and the peak daily transaction value exceeded RMB 220 million recently."

Second Quarter 2014 Financial Results

For the second quarter of 2014, Ctrip reported total revenues of RMB1.8 billion (US$293 million), representing a 38% increase from the same period in 2013. Total revenues for the second quarter of 2014 increased by 9% from the previous quarter.

Accommodation reservation revenues amounted to RMB753 million (US$121 million) for the second quarter of 2014, representing a 47% increase year-on-year, primarily driven by an increase of 64% in accommodation reservation volume and partially offset by the decrease of commission per room night. Accommodation reservation revenues increased by 15% quarter-on-quarter.

Transportation ticketing revenues for the second quarter of 2014 were RMB726 million (US$117 million), representing a 39% increase year-on-year, driven by an increase of 83% in ticketing volume. Transportation ticketing revenues increased by 11% quarter-on-quarter.

Packaged-tour revenues for the second quarter of 2014 were RMB205 million (US$33 million), representing a 10% increase year-on-year, driven by an increase of 42% in volume of organized tours and self-guided tours. Packaged-tour revenues decreased by 21% quarter-on-quarter, primarily due to seasonality.

Corporate travel revenues for the second quarter of 2014 were RMB90 million (US$15 million), representing a 37% increase year-on-year, primarily driven by the increased corporate travel demand from business activities. Corporate travel revenue increased by 27% quarter-on-quarter, primarily due to seasonality.

For the second quarter of 2014, net revenues were RMB1.7 billion (US$278 million), representing a 38% increase from the same period in 2013. Net revenues for the second quarter of 2014 increased by 9% from the previous quarter.

Gross margin was 72% for the second quarter of 2014, compared to 75% in the same period in 2013 and remained consistent with that in the previous quarter.

Product development expenses for the second quarter of 2014 increased by 55% to RMB479 million (US$77 million) from the same period in 2013 and 9% from the previous quarter, primarily due to an increase in product development personnel related expenses. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 25% of the net revenues, increased from 22% in the same period in 2013 and remained consistent with that in the previous quarter.

Sales and marketing expenses for the second quarter of 2014 increased by 77% to RMB479 million (US$77 million) from the same period in 2013 and increased by 12% from the previous quarter, primarily due to an increase in sales and marketing related activities. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 27% of the net revenues, increased from 21% in the same period in 2013 and 26% in the previous quarter.

General and administrative expenses for the second quarter of 2014 increased by 22% to RMB194 million (US$31 million) from the same period in 2013 and 2% from the previous quarter primarily due to an increase in administrative personnel related expenses. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 8% of the net revenues, remained consistent with that in the same period in 2013 and the previous quarter.

Income from operations for the second quarter of 2014 was RMB91million (US$15 million), representing a decrease of 54% from the same period in 2013 and an increase of 28% from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB202 million (US$33 million), representing a decrease of 34% from the same period in 2013 and an increase of 5% from the previous quarter.

Operating margin was 5% for the second quarter of 2014, compared to 16% in the same period in 2013, and 4% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 12%, compared to 25% in the same period in 2013, and remained consistent with that in the previous quarter. 

The effective tax rate for the second quarter of 2014 was 32%, increased from 27% in the same period of 2013, primarily due to the increase in the amount of non-tax-deductible share-based compensation as a percentage to our income as a whole. The effective tax rate for the second quarter of 2014 decreased from 40% in the previous quarter, primarily due to certain tax benefits granted by the local tax bureau in the second quarter of 2014.

Net income attributable to Ctrip's shareholders for the second quarter of 2014 was RMB135 million (US$22 million), representing a decrease of 36% from the same period in 2013 and an increase of 17% from the previous quarter. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB246 million (US$40 million), representing a decrease of 23% from the same period in 2013 and an increase of 4% from the previous quarter.

Diluted earnings per ADS were RMB0.88 (US$0.14) for the second quarter of 2014. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB1.58 (US$0.26) for the second quarter of 2014.

As of June 30, 2014, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB10.8 billion (US$1.7 billion).

Business Outlook

For the third quarter of 2014, the Company expects to continue the net revenue growth year-on-year at a rate of approximately 30-35%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.

Recent Development

As of July 30, 2014, Ctrip had purchased approximately 19 million ADSs in aggregate with a total consideration of US$370 million.

Conference Call

Ctrip's management team will host a conference call at 8:00PM U.S. Eastern Time on July 30, 2014 (or 8:00AM on July 31, 2014 in the Shanghai/Hong Kong Time) following the announcement.

The conference call will be available on Webcast live and replay at: http://ir.ctrip.com. The call will be archived for one month at this website.

The dial-in details for the live conference call: U.S. Toll Free Number +1.877.299.4502, International dial-in number +1.617.597.5442, Passcode 85282121#. For pre-registration, please click

https://www.theconferencingservice.com/prereg/key.process?key=PPMBUNHGQ

A telephone replay of the call will be available after the conclusion of the conference call until August 6, 2014. The dial-in details for the replay: U.S. Toll Free Number +1.888.286.8010, International dial-in number +1.617.801.6888, Passcode 41610502.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Ctrip's strategic and operational plans, contain forward-looking statements. Ctrip may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Ctrip's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, severe or prolonged downturn in the global or Chinese economy, general declines or disruptions in the travel industry, volatility in the trading price of Ctrip's ADSs, Ctrip's reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to further increase Ctrip's brand recognition to obtain new business partners and consumers, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in mainland China, Hong Kong, Macau or Taiwan, failure to successfully develop Ctrip's corporate travel business, damage to or failure of Ctrip's infrastructure and technology, loss of services of Ctrip's key executives, adverse changes in economic and political policies of the PRC government, inflation in China, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Ctrip's affiliated Chinese entities and the contractual arrangements among Ctrip, its affiliated Chinese entities and their shareholders, and other risks outlined in Ctrip's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F and other filings. All information provided in this press release and in the attachments is as of the date of the issuance, and Ctrip does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Ctrip's unaudited condensed consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Ctrip uses non-GAAP financial information related to product development expenses, sales and marketing expenses, general and administrative expenses, income from operations, operating margin, net income, and diluted earnings per ordinary share and per ADS, each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, "Compensation-Stock Compensation" for 2014 and 2013. Ctrip's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.

Non-GAAP information is not prepared in accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in Ctrip's business for the foreseeable future.

Reconciliations of Ctrip's non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

About Ctrip.com International, Ltd.

Ctrip.com International, Ltd. is a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours, and corporate travel management in China. Ctrip aggregates hotel and flight information to enable business and leisure travellers to make informed and cost-effective bookings. Ctrip also helps customers book vacation packages and guided tours. In addition, Ctrip corporate travel management services help corporate clients effectively manage their travel requirements. Since its inception in 1999, Ctrip has experienced substantial growth and become one of the best-known travel brands in China.

For further information, please contact:

Investor Relations
Ctrip.com International, Ltd.
Tel: (+86) 21 3406 4880 X 12928
Email: iremail@ctrip.com

Ctrip.com International, Ltd. 

Unaudited Condensed Consolidated Balance Sheets












December 31, 2013



June 30, 2014



June 30, 2014



RMB



RMB



USD



(unaudited)



(unaudited)



(unaudited)

ASSETS









Current assets:









Cash and cash equivalents


7,138,344,814



6,548,622,152



1,055,616,441

Restricted cash


739,543,614



1,209,087,347



194,900,920

Short-term investment 


3,635,090,955



3,012,465,793



485,599,618

Accounts receivable, net


1,518,230,029



1,998,512,645



322,153,692

Prepayments and other current assets


1,237,530,956



1,811,252,378



291,967,951

Deferred tax assets, current


96,979,500



112,223,898



18,090,125










Total current assets


14,365,719,868



14,692,164,213



2,368,328,747










Long-term deposits and prepayments     


559,185,652



2,053,754,455



331,058,491

Land use rights


107,476,794



105,909,243



17,072,223

Property, equipment and software


1,412,943,693



2,095,403,912



337,772,247

Investment


2,857,213,480



3,030,398,888



488,490,375

Goodwill


972,531,184



1,180,513,074



190,294,841

Intangible assets


356,653,022



426,170,269



68,697,251

Other long-term receviables


186,750,769



189,131,150



30,487,322










Total assets


20,818,474,462



23,773,445,204



3,832,201,497










LIABILITIES









Current liabilities:









Short-term borrowings


774,599,341



1,540,973,395



248,399,864

Accounts payable


1,637,545,824



2,171,110,809



349,975,951

Salary and welfare payable


257,641,763



301,002,241



48,520,575

Taxes payable


315,299,656



363,284,813



58,560,322

Advances from customers


2,451,931,450



3,071,903,156



495,180,727

Accrued liability for customer reward program


284,668,935



373,838,765



60,261,584

Other payables and accruals


646,321,729



1,067,255,633



172,038,112










Total current liabilities


6,368,008,698



8,889,368,812



1,432,937,135










Deferred tax liabilities, non-current


63,197,155



72,004,775



11,606,934

Long-term Debt


5,657,182,650



5,797,264,200



934,500,000










Total liabilities


12,088,388,503



14,758,637,787



2,379,044,069










SHAREHOLDERS' EQUITY









Share capital


3,033,490



3,069,141



494,735

Additional paid-in capital


4,088,484,766



4,512,752,886



727,440,984

Statutory reserves


118,449,230



118,449,230



19,093,628

Accumulated other comprehensive income


372,634,580



202,734,123



32,680,077

Retained Earnings


5,498,934,733



5,749,174,666



926,748,125

Treasury stock 


(1,551,141,268)



(1,997,296,415)



(321,957,640)










Total Ctrip's shareholders' equity


8,530,395,531



8,588,883,631



1,384,499,909










Noncontrolling interests


199,690,428



425,923,786



68,657,519










Total shareholders' equity


8,730,085,959



9,014,807,417



1,453,157,428










Total liabilities and shareholders' equity


20,818,474,462



23,773,445,204



3,832,201,497


 

Ctrip.com International, Ltd. 

Unaudited Condensed Consolidated Statements of Comprehensive Income






























Quarter Ended



Quarter Ended



Quarter Ended



Quarter Ended


June 30, 2013

March 31, 2014

June 30, 2014

June 30, 2014


RMB

RMB

RMB

USD














(unaudited)



(unaudited)



(unaudited)



(unaudited)



Revenues:













Accommodation reservation **


510,977,850



656,662,297



752,565,453



121,311,086


Transportation ticketing ***


522,013,771



651,065,201



725,513,462



116,950,394


Packaged tour


187,024,425



259,220,548



205,141,896



33,068,202


Corporate travel


65,944,003



70,956,329



90,442,575



14,579,047


Others


34,190,294



35,268,438



45,842,408



7,389,646















Total revenues


1,320,150,343



1,673,172,813



1,819,505,794



293,298,375















Less: business tax and related surcharges


(75,294,640)



(91,384,691)



(97,244,864)



(15,675,554)















Net revenues


1,244,855,703



1,581,788,122



1,722,260,930



277,622,821















Cost of revenues


(309,111,062)



(449,411,887)



(478,601,393)



(77,148,977)















Gross profit


935,744,641



1,132,376,235



1,243,659,537



200,473,844















Operating expenses:













Product development *


(309,851,724)



(440,653,457)



(479,262,194)



(77,255,496)


Sales and marketing *


(271,244,149)



(429,548,555)



(479,274,011)



(77,257,401)


General and administrative *


(158,708,095)



(191,227,092)



(194,203,673)



(31,304,996)















Total operating expenses


(739,803,968)



(1,061,429,104)



(1,152,739,878)



(185,817,893)















Income from operations


195,940,673



70,947,131



90,919,659



14,655,951















Interest income ****


46,994,570



92,166,471



83,277,622



13,424,080


Interest expense ****


(3,932,234)



(32,998,931)



(33,693,033)



(5,431,207)


Other income/(expense)


24,056,241



(14,298,252)



5,265,556



848,790















Income before income tax expense and equity in income


263,059,250



115,816,419



145,769,804



23,497,614















Income tax expense


(70,419,098)



(46,686,845)



(47,090,068)



(7,590,765)


Equity in (loss)/income of affiliates


(4,525,873)



19,231,991



13,215,687



2,130,325















Net income


188,114,279



88,361,565



111,895,423



18,037,174















Less: Net loss attributable to noncontrolling interests


22,266,815



26,990,188



22,992,757



3,706,357















Net income attributable to Ctrip's shareholders


210,381,094



115,351,753



134,888,180



21,743,531















Comprehensive income/(loss) attributable to Ctrip's
shareholders                                                                                   


208,157,307



(180,401,468)



260,740,944



42,030,586















Earnings per ordinary share













- Basic


6.44



3.39



3.97



0.64


- Diluted


5.88



3.00



3.51



0.57















Earnings per ADS













- Basic


1.61



0.85



0.99



0.16


- Diluted


1.47



0.75



0.88



0.14















Weighted average ordinary shares outstanding













- Basic


32,677,730



33,994,500



33,952,472



33,952,472


- Diluted


36,573,910



39,496,370



39,339,689



39,339,689















* Share-based compensation charges included are as follows:













  Product development 


35,003,222



44,381,634



41,555,508



6,698,612


  Sales and marketing 


12,325,365



12,995,817



11,715,564



1,888,511


  General and administrative 


63,838,858



64,266,792



58,066,756



9,360,171















** Accommodation reservation revenues mainly represent revenues from reservations of hotels, hostels, vacation rentals and other accommodation related services.















*** Transportation ticketing revenues mainly represent revenues from reservations of air tickets, railway tickets and other transportation related services.


















**** Interest expenses have been reclassified from interest income with no effect on net income or retained earnings. 




















Ctrip.com International, Ltd. 








Reconciliation of  GAAP and Non-GAAP Results








(In RMB, except % and per share information)





















Quarter Ended June 30, 2014




GAAP  Result

% of Net Revenues


Share-based Compensation

% of Net Revenues


Non-GAAP Result

% of Net Revenues














Product development 

(479,262,194)

28%


41,555,508

2%


(437,706,686)

25%



Sales and marketing 

(479,274,011)

28%


11,715,564

1%


(467,558,447)

27%



General and administrative 

(194,203,673)

11%


58,066,756

3%


(136,136,917)

8%



Total operating expenses

(1,152,739,878)

67%


111,337,828

6%


(1,041,402,050)

60%














Income from operations

90,919,659

5%


111,337,828

6%


202,257,487

12%














Net income attributable to Ctrip's shareholders

134,888,180

8%


111,337,828

6%


246,226,008

14%














Diluted earnings per ordinary share (RMB)

3.51



2.83



6.34















Diluted earnings per ADS (RMB)

0.88



0.70



1.58















Diluted earnings per ADS (USD)

0.14



0.12



0.26



























Quarter Ended March 31, 2014




GAAP  Result

% of Net Revenues


Share-based Compensation

% of Net Revenues


Non-GAAP Result

% of Net Revenues














Product development 

(440,653,457)

28%


44,381,634

3%


(396,271,823)

25%



Sales and marketing 

(429,548,555)

27%


12,995,817

1%


(416,552,738)

26%



General and administrative 

(191,227,092)

12%


64,266,792

4%


(126,960,300)

8%



Total operating expenses

(1,061,429,104)

67%


121,644,243

8%


(939,784,861)

59%














Income from operations

70,947,131

4%


121,644,243

8%


192,591,374

12%














Net income attributable to Ctrip's shareholders

115,351,753

7%


121,644,243

8%


236,995,996

15%














Diluted earnings per ordinary share (RMB)

3.00



3.08



6.08















Diluted earnings per ADS (RMB)

0.75



0.77



1.52















Diluted earnings per ADS (USD)

0.12



0.12



0.24



























Quarter Ended June 30, 2013




GAAP  Result

% of Net Revenues


Share-based Compensation

% of Net Revenues


Non-GAAP Result

% of Net Revenues














Product development 

(309,851,724)

25%


35,003,222

3%


(274,848,502)

22%



Sales and marketing 

(271,244,149)

22%


12,325,365

1%


(258,918,784)

21%



General and administrative 

(158,708,095)

13%


63,838,858

5%


(94,869,237)

8%



Total operating expenses

(739,803,968)

59%


111,167,445

9%


(628,636,523)

50%














Income from operations

195,940,673

16%


111,167,445

9%


307,108,118

25%














Net income attributable to Ctrip's shareholders

210,381,094

17%


111,167,445

9%


321,548,539

26%














Diluted earnings per ordinary share (RMB)

5.88



3.04



8.92















Diluted earnings per ADS (RMB)

1.47



0.76



2.23















Diluted earnings per ADS (USD)

0.24



0.12



0.36


























Notes for all the condensed consolidated financial schedules presented:













Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.2036 on June 30, 2014 published by the Federal Reserve Board.


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