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Ctrip Reports First Quarter 2013 Financial Results

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SHANGHAI, May 8, 2013 /PRNewswire/ -- Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider of hotel accommodations, airline tickets, packaged tours and corporate travel management in China, today announced its unaudited financial results for the quarter ended March 31, 2013.

Highlights for the First Quarter of 2013

  • Net revenues were RMB1.2 billion (US$187 million) for the first quarter of 2013, up 27% year-on-year, versus our first quarter net revenue guidance of 15-20% increase year-on-year.
  • Gross margin was 74% for the first quarter of 2013, compared to 75% in the same period in 2012.
  • Income from operations was RMB160 million (US$26 million) for the first quarter of 2013, down 9% year-on-year. Excluding share-based compensation charges (non-GAAP), income from operations was RMB272 million (US$44 million), down 2% year-on-year.
  • Operating margin was 14% for the first quarter of 2013, compared to 19% in the same period in 2012. Excluding share-based compensation charges (non-GAAP), operating margin was 23%, compared to 30% in the same period in 2012.
  • Net income attributable to Ctrip's shareholders was RMB153 million (US$25 million) for the first quarter of 2013, down 26% year-on-year. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB265 million (US$43 million), down 14% year-on-year. 
  • Diluted earnings per ADS were RMB1.10 (US$0.18) for the first quarter of 2013. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB1.87 (US$0.30) for the first quarter of 2013.
  • Share-based compensation charges were RMB112 million (US$18 million), accounting for 10% of the net revenues, or RMB0.77 (US$0.12) per ADS for the first quarter of 2013.

"We are glad to report strong results in the first quarter of 2013," said James Liang, Chairman of the Board and Chief Executive Officer of Ctrip. "We have made solid progress and gained market shares across major business lines. We will continue to focus on our mobile strategy, improve price competitiveness, strengthen partner relationships, and enhance marketing effectiveness. Our goal is to become the one-stop travel platform with best products, best services, and best prices for our customers. We are excited to capture the opportunities in the travel industry in China and will work hard to elevate our leadership to the next level."

First Quarter 2013 Financial Results

For the first quarter of 2013, Ctrip reported total revenues of RMB1.2 billion (US$198 million), representing a 27% increase from the same period in 2012. Total revenues for the first quarter of 2013 increased by 5% from the previous quarter.

Hotel reservation revenues amounted to RMB451 million (US$73 million) for the first quarter of 2013, representing a 23% increase year-on-year, primarily driven by an increase of 41% in hotel reservation volume and partially offset by a decrease of 13% in commission per room night. The decrease of commission per room night was primarily due to promotional activities. Hotel reservation revenues decreased by 4% quarter-on-quarter.

Air ticket booking revenues for the first quarter of 2013 were RMB457 million (US$74 million), representing a 27% increase year-on-year, primarily driven by an increase in air tickets sales volume. Air ticket booking revenues increased by 2% quarter-on-quarter.

Packaged-tour revenues for the first quarter of 2013 were RMB235 million (US$38 million), representing a 41% increase year-on-year due to the increase of leisure travel volume. Packaged-tour revenues increased by 42% quarter-on-quarter, primarily due to seasonality.

Corporate travel revenues for the first quarter of 2013 were RMB51 million (US$8 million), representing a 31% increase year-on-year, primarily driven by the increased corporate travel demand from business activities. Corporate travel revenue decreased by 11% quarter-on-quarter, primarily due to seasonality.

For the first quarter of 2013, net revenues were RMB1.2 billion (US$187 million), representing a 27% increase from the same period in 2012. Net revenues for the first quarter of 2013 increased by 5% from the previous quarter.

Gross margin was 74% for the first quarter of 2013, compared to 75% in the same period in 2012 and remained consistent with that in the previous quarter.

Product development expenses for the first quarter of 2013 increased by 36% to RMB268 million (US$43 million) from the same period in 2012, primarily due to an increase in product development personnel related expense and share-based compensation charges. Product development expenses for the first quarter of 2013 increased by 1% from the previous quarter. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 20% of the net revenues, increased from 18% in the same period in 2012 and decreased from 21% in the previous quarter.

Sales and marketing expenses for the first quarter of 2013 increased by 46% to RMB267 million (US$43 million) from the same period in 2012, primarily due to an increase in sales and marketing related activities. Sales and marketing expenses for the first quarter of 2013 decreased by 5% from the previous quarter, primarily due to a decrease in sales and marketing related activities. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 22% of the net revenues, increased from 19% in the same period in 2012 and decreased from 24% in the previous quarter.

General and administrative expenses for the first quarter of 2013 increased by 25% to RMB161 million (US$26 million) from the same period in 2012, primarily due to an increase in personnel related expenses and share-based compensation charges. General and administrative expenses for the first quarter of 2013 increased by 6% from the previous quarter, primarily due to an increase in 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 2012 and in the previous quarter.

Income from operations for the first quarter of 2013 was RMB160 million (US$26 million), representing a decrease of 9% from the same period in 2012 and an increase of 33% from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB272 million (US$44 million), representing a decrease of 2% from the same period in 2012 and an increase of 16% from the previous quarter.

Operating margin was 14% for the first quarter of 2013, compared to 19% in the same period in 2012, and 11% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 23%, compared to 30% in the same period in 2012, and 21% in the previous quarter. 

The effective tax rate for the first quarter of 2013 was 32%, increased from 28% in the same period of 2012 and 25% in the previous quarter, primarily due to certain non tax-deductible items in PRC subsidiaries.

Net income attributable to Ctrip's shareholders for the first quarter of 2013 was RMB153 million (US$25 million), representing a decrease of 26% from the same period in 2012 and a decrease of 20% from the previous quarter. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB265 million (US$43 million), representing a decrease of 14% from the same period in 2012 and a decrease of 13% from the previous quarter.

Diluted earnings per ADS were RMB1.10 (US$0.18) for the first quarter of 2013. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB1.87 (US$0.30) for the first quarter of 2013.

As of March 31, 2013, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB6.2 billion (US$993 million).

Business Outlook

For the second quarter of 2013, the Company expects to continue the net revenue growth year-on-year at a rate of approximately 15-20%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.

Conference Call

Ctrip's management team will host a conference call at 8:00PM U.S. Eastern Time on May 8, 2013 (or 8:00AM on May 9, 2013 in the Shanghai/HK time zone) 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 +1.800.219.3192, International dial-in number + 1.617.597.5412, Passcode 893 736 31#. For pre-registration, please click:

https://www.theconferencingservice.com/prereg/key.process?key=P4DMDMUTH

A telephone replay of the call will be available after the conclusion of the conference call through May 16, 2013. 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 46370952.

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, the slow-down of economic growth in China and the global economic downturn, 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, inflation in China and in other countries, 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 2013 and 2012. 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 hotel accommodations, airline tickets, packaged tours, and corporate travel management in China. Ctrip aggregates hotel and flight information to enable business and leisure travelers 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 X12928
Email: iremail@ctrip.com

Ctrip.com International, Ltd.

Unaudited Condensed Consolidated Balance Sheets




December 31, 2012


March 31, 2013


March 31, 2013

RMB

RMB

USD



(unaudited)


(unaudited)


(unaudited)

ASSETS







Current assets:







Cash and cash equivalents


3,421,532,962


3,939,763,848


634,340,801

Restricted cash


768,228,577


737,745,826


118,784,348

Short-term investment 


1,408,664,335


1,487,624,662


239,522,229

Accounts receivable, net


983,804,403


1,254,443,621


201,977,784

Prepayments and other current assets


999,148,710


745,785,290


120,078,781

Deferred tax assets, current


61,840,526


72,365,245


11,651,518








Total current assets


7,643,219,513


8,237,728,492


1,326,355,461








Long-term deposits and prepayments     


210,618,310


191,532,838


30,838,674

Land use rights


110,659,284


109,716,237


17,665,395

Property, equipment and software


1,123,937,191


1,302,525,959


209,719,514

Investment


1,437,247,949


1,413,670,522


227,614,884

Goodwill


822,585,341


828,989,339


133,475,452

Intangible assets


321,483,420


319,630,175


51,463,608








Total assets


11,669,751,008


12,403,793,562


1,997,132,988








LIABILITIES







Current liabilities:







Short-term borrowings


453,478,628


452,201,931


72,808,967

Accounts payable


1,023,672,151


1,472,683,797


237,116,603

Salary and welfare payable


229,969,924


206,125,620


33,188,256

Taxes payable


216,456,010


216,034,596


34,783,699

Advances from customers


1,414,865,769


1,330,890,648


214,286,509

Accrued liability for customer reward program 


217,548,153


228,917,574


36,857,985

Other payables and accruals


354,153,607


375,254,743


60,419,711








Total current liabilities


3,910,144,242


4,282,108,909


689,461,730








Deferred tax liabilities, non-current


53,309,153


53,147,954


8,557,344

Long-term Debt


1,121,418,000


1,117,944,000


180,000,000








Total liabilities


5,084,871,395


5,453,200,863


878,019,074








SHAREHOLDERS' EQUITY







Share capital


2,979,144


2,993,488


481,981

Additional paid-in capital


3,818,256,227


3,945,645,513


635,287,807

Statutory reserves


103,222,512


103,222,514


16,619,842

Accumulated other comprehensive loss


(58,778,675)


(82,154,164)


(13,227,630)

Retained Earnings


4,515,841,767


4,669,313,240


751,805,442

Treasury stock 


(1,891,888,900)


(1,891,888,900)


(304,612,755)








Total Ctrip's shareholders' equity


6,489,632,075


6,747,131,691


1,086,354,687








Noncontrolling interests


95,247,538


203,461,008


32,759,227








Total shareholders' equity


6,584,879,613


6,950,592,699


1,119,113,914








Total liabilities and shareholders' equity


11,669,751,008


12,403,793,562


1,997,132,988

 

Ctrip.com International, Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income




Quarter Ended


Quarter Ended


Quarter Ended


Quarter Ended

March 31, 2012

December 31, 2012

March 31, 2013

March 31, 2013

RMB

RMB

RMB

 USD 



(unaudited)


(unaudited)


(unaudited)


 (unaudited) 

Revenues:









Hotel reservation


366,784,363


468,304,604


450,524,886


72,538,946

Air-ticketing


360,463,420


447,186,315


456,502,524


73,501,405

Packaged tour


166,379,981


165,724,297


235,208,743


37,870,925

Corporate travel


38,801,113


57,532,553


50,973,701


8,207,268

Others


31,170,118


28,546,319


35,198,400


5,667,289










Total revenues


963,598,995


1,167,294,088


1,228,408,254


197,785,833










Less: business tax and related surcharges


(52,790,604)


(65,938,822)


(67,900,120)


(10,932,588)










Net revenues


910,808,391


1,101,355,266


1,160,508,134


186,853,245










Cost of revenues


(225,956,740)


(284,704,746)


(304,171,687)


(48,974,639)










Gross profit


684,851,651


816,650,520


856,336,447


137,878,606










Operating expenses:









Product development *


(196,216,150)


(264,099,634)


(267,532,617)


(43,075,388)

Sales and marketing *


(183,405,064)


(280,764,753)


(267,494,323)


(43,069,222)

General and administrative *


(128,674,249)


(151,879,211)


(161,292,761)


(25,969,724)










Total operating expenses


(508,295,463)


(696,743,598)


(696,319,701)


(112,114,334)










Income from operations


176,556,188


119,906,922


160,016,746


25,764,272










Interest income


45,773,353


34,061,163


22,559,420


3,632,289

Other income


9,437,752


58,378,812


7,689,137


1,238,027










Income before income tax expense and equity in income 


231,767,293


212,346,897


190,265,303


30,634,588










Income tax expense


(64,797,513)


(53,776,285)


(61,378,155)


(9,882,488)

Equity in income of affiliates


43,475,409


4,265,040


87,806


14,138










Net income


210,445,189


162,835,652


128,974,954


20,766,238










Less: Net (income)/loss attributable to noncontrolling interests


(2,077,847)


29,716,374


24,496,519


3,944,181










Net income attributable to Ctrip's shareholders


208,367,342


192,552,026


153,471,473


24,710,419










Comprehensive income


127,215,669


197,932,727


130,095,984


20,946,735










Earnings per ordinary share









- Basic


5.80


5.96


4.73


0.76

- Diluted


5.48


5.51


4.39


0.71










Earnings per ADS









- Basic


1.45


1.49


1.18


0.19

- Diluted


1.37


1.38


1.10


0.18










Weighted average ordinary shares outstanding









- Basic


35,911,996


32,282,299


32,439,013


32,439,013

- Diluted


38,053,311


35,719,079


36,015,108


36,015,108










* Share-based compensation charges included are as follows:









  Product development 


29,767,590


35,881,144


34,854,918


5,611,985

  Sales and marketing 


13,547,719


14,379,832


13,292,481


2,140,220

  General and administrative 


57,363,156


63,478,526


63,440,672


10,214,573

 

Ctrip.com International, Ltd.

Reconciliation of  GAAP and Non-GAAP Results

(In RMB, except % and per share information)



Quarter Ended March 31, 2013


GAAP  Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue










Product development 

(267,532,617)

23%


34,854,918

3%


(232,677,699)

20%

Sales and marketing 

(267,494,323)

23%


13,292,481

1%


(254,201,842)

22%

General and administrative 

(161,292,761)

14%


63,440,672

5%


(97,852,089)

8%

Total operating expenses

(696,319,701)

60%


111,588,071

10%


(584,731,630)

50%










Income from operations

160,016,746

14%


111,588,071

10%


271,604,817

23%










Net income attributable to Ctrip's shareholders

153,471,473

13%


111,588,071

10%


265,059,544

23%










Diluted earnings per ordinary share (RMB)       

4.39



3.10



7.49











Diluted earnings per ADS (RMB)

1.10



0.77



1.87











Diluted earnings per ADS (USD)

0.18



0.12



0.30





















Quarter Ended December 31, 2012


GAAP  Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue










Product development 

(264,099,634)

24%


35,881,144

3%


(228,218,490)

21%

Sales and marketing 

(280,764,753)

25%


14,379,832

1%


(266,384,921)

24%

General and administrative 

(151,879,211)

14%


63,478,526

6%


(88,400,685)

8%

Total operating expenses

(696,743,598)

63%


113,739,502

10%


(583,004,096)

53%










Income from operations

119,906,922

11%


113,739,502

10%


233,646,424

21%










Net income attributable to Ctrip's shareholders

192,552,026

17%


113,739,502

10%


306,291,528

28%










Diluted earnings per ordinary share (RMB)

5.51



3.18



8.70











Diluted earnings per ADS (RMB)

1.38



0.80



2.17











Diluted earnings per ADS (USD)

0.22



0.13



0.35





















Quarter Ended March 31, 2012


GAAP  Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue










Product development 

(196,216,150)

22%


29,767,590

3%


(166,448,560)

18%

Sales and marketing 

(183,405,064)

20%


13,547,719

1%


(169,857,345)

19%

General and administrative 

(128,674,249)

14%


57,363,156

6%


(71,311,093)

8%

Total operating expenses

(508,295,463)

56%


100,678,465

11%


(407,616,998)

45%










Income from operations

176,556,188

19%


100,678,465

11%


277,234,653

30%










Net income attributable to Ctrip's shareholders

208,367,342

23%


100,678,465

11%


309,045,807

34%










Diluted earnings per ordinary share (RMB)

5.48



2.65



8.12











Diluted earnings per ADS (RMB)

1.37



0.66



2.03











Diluted earnings per ADS (USD)

0.22



0.11



0.32



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=RMB6.2108 on March 29, 2013 published by the Federal Reserve Board.

SOURCE Ctrip.com International, Ltd.



RELATED LINKS
http://ir.ctrip.com
https://www.theconferencingservice.com/prereg/key.process?key=P4DMDMUTH

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