Ctrip Reports Third Quarter 2011 Financial Results

SHANGHAI, Nov. 13, 2011 /PRNewswire-Asia/ -- 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 September 30, 2011.

Highlights for the Third Quarter of 2011

  • Net revenues were RMB975 million (US$153 million) for the third quarter of 2011, up 20% year-on-year.
  • Gross margin was 77% for the third quarter of 2011, compared to 78% in the same period in 2010.
  • Income from operations was RMB304 million (US$48 million) for the third quarter of 2011, down 1% year-on-year. Excluding share-based compensation charges (non-GAAP), income from operations was RMB395 million (US$62 million), up 7% year-on-year.
  • Operating margin was 31% for the third quarter of 2011, compared to 38% in the same period in 2010. Excluding share-based compensation charges (non-GAAP), operating margin was 41%, compared to 45% in the same period in 2010.
  • Net income attributable to Ctrip's shareholders was RMB325 million (US$51 million) in the third quarter of 2011, up 2% year-on-year. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB416 million (US$65 million), up 9% year-on-year.  
  • Diluted earnings per ADS were RMB2.13 (US$0.33) for the third quarter of 2011. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB2.73 (US$0.43) for the third quarter of 2011.
  • Share-based compensation charges were RMB91 million (US$14 million), accounting for 9% of the net revenues, or RMB0.59 (US$0.09) per ADS for the third quarter of 2011.

"Despite a challenging comparison base, Ctrip has continued to outperform the industry with solid growth in the third quarter of 2011," said Min Fan, President and Chief Executive Officer of Ctrip. "The Ctrip team effectively implemented the Company's strategies to extend market leadership in all areas. We are encouraged by the progress in sales and marketing, product development and system enhancement. Building on these concerted efforts, we believe the team will continue to succeed in this promising and challenging market."

Third Quarter 2011 Financial Results

For the third quarter of 2011, Ctrip reported total revenues of RMB1 billion (US$163 million), representing a 20% increase from the same period in 2010. Total revenues for the third quarter of 2011 increased by 17% from the previous quarter.

Hotel reservation revenues amounted to RMB410 million (US$64 million) for the third quarter of 2011, representing a 17% increase year-on-year and 12% increase quarter-on-quarter, primarily driven by an increase in hotel reservation volume.

Air ticket booking revenues for the third quarter of 2011 were RMB385 million (US$60 million), representing a 22% increase year-on-year, primarily driven by a 16% increase in air ticketing sales volume and a 6% increase in commission per ticket year-on-year. Air ticket booking revenues increased 11% quarter-on-quarter.

Packaged-tour revenues for the third quarter of 2011 were RMB171 million (US$27 million), representing a 22% increase year-on-year due to the increase of leisure travel volume. Packaged-tour revenues increased 58% quarter-on-quarter, primarily due to seasonality.

Corporate travel revenues for the third quarter of 2011 were RMB43 million (US$7 million), representing a 28% increase year-on-year and a 10% increase quarter-on-quarter, primarily driven by the increased corporate travel demand from business activities.

For the third quarter of 2011, net revenues were RMB975 million (US$153 million), representing a 20% increase from the same period in 2010. Net revenues for the third quarter of 2011 increased by 17% from the previous quarter.

Gross margin was 77% in the third quarter of 2011, compared to 78% in the same period in 2010 and remained consistent with that in the previous quarter.

Product development expenses for the third quarter of 2011 increased by 31% to RMB162 million (US$25 million) from the same period in 2010, and increased by 18% from the previous quarter, primarily due to an increase in product development personnel and share-based compensation charges. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 14% of the net revenues, increased from 13% in the same period in 2010 and remained consistent with that in the previous quarter.

Sales and marketing expenses for the third quarter of 2011 increased by 39% to RMB174 million (US$27 million) from the same period in 2010, primarily due to an increase in sales and marketing related activities and an increase in sales and marketing personnel. Sales and marketing expenses for the third quarter of 2011 increased by 23% 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 17% of the net revenues, increased from 14% in the same period in 2010 and increased from 16% in the previous quarter.

General and administrative expenses for the third quarter of 2011 increased by 37% to RMB109 million (US$17 million) from the same period in 2010, primarily due to an increase in administrative personnel and share-based compensation charges. General and administrative expenses for the third quarter of 2011 increased by 13% from the previous quarter, primarily due to the increase in administrative personnel. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 6% of the net revenues, increased from 5% in the same period in 2010 and in the previous quarter.

Income from operations for the third quarter of 2011 was RMB304 million (US$48 million), representing a decrease of 1% from the same period in 2010 and an increase of 13% from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB395 million (US$62 million), representing an increase of 7% from the same period in 2010 and an increase of 11% from the previous quarter.

Operating margin was 31% in the third quarter of 2011, compared to 38% in the same period in 2010, and 32% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 41%, decreased from 45% in the same period in 2010 and 43% in the previous quarter.  

The effective tax rate for the third quarter of 2011 was 21%, increased from 17% in the same periods of 2010, primarily due to the normalization of the tax rate in the third quarter of 2011. The effective tax rate for the third quarter of 2011 increased from 16% in the previous quarter, primarily due to certain tax benefit granted by the local tax bureau in the second quarter of 2011.

Net income attributable to Ctrip's shareholders for the third quarter of 2011 was RMB325 million (US$51 million), representing an increase of 2% from the same period in 2010 and an increase of 23% from the previous quarter. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB416 million (US$65 million), representing an increase of 9% from the same period in 2010 and an increase of 18% from the previous quarter.

Diluted earnings per ADS were RMB2.13 (US$0.33) for the third quarter of 2011. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB2.73 (US$0.43) for the third quarter of 2011.

As of September 30, 2011, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB4.2 billion (US$664 million).

Business Outlook

For the fourth quarter of 2011, 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 November 13, 2011 (or 9:00AM on November 14, 2011 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 +1.888.679.8034, International dial-in number + 1.617.213.4847, Passcode 71329203. For pre-registration, please click https://www.theconferencingservice.com/prereg/key.process?key=PQF9VA9F3.

A telephone replay of the call will be available after the conclusion of the conference call through November 21, 2011. 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 31797822.

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 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, "Stock Compensation" for 2011 and 2010. 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 books 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 12258
Email: iremail@ctrip.com

Ctrip.com International, Ltd.









Consolidated Balance Sheets Information




















December 31, 2010



September 30, 2011



September 30, 2011



RMB



RMB



USD












(unaudited)



(unaudited)



(unaudited)

ASSETS









Current assets:









Cash and cash equivalents


2,153,935,111



2,900,100,504



454,703,748

Restricted cash


224,179,126



209,747,411



32,886,079

Short-term investment


1,178,278,063



1,124,602,452



176,325,251

Accounts receivable, net


621,548,849



859,767,242



134,802,013

Prepayments and other current assets


355,831,117



744,337,793



116,703,950

Deferred tax assets, current


37,136,184



39,437,172



6,183,313










Total current assets


4,570,908,450



5,877,992,574



921,604,354










Long-term deposits


155,856,622



157,983,472



24,770,065

Land use rights


106,333,805



104,392,645



16,367,614

Property, equipment and software


653,678,980



650,687,294



102,020,585

Investment


1,574,230,623



1,271,948,031



199,427,412

Goodwill


758,231,441



798,601,767



125,211,942

Intangible assets


296,964,092



308,307,541



48,339,219










Total assets


8,116,204,013



9,169,913,324



1,437,741,191










LIABILITIES









Current liabilities:









Accounts payable


595,283,281



736,318,369



115,446,593

Salary and welfare payable


159,258,508



135,915,909



21,310,114

Taxes payable


161,772,241



209,328,113



32,820,338

Advances from customers


595,737,152



738,008,367



115,711,566

Accrued liability for customer reward program


121,319,301



148,659,930



23,308,236

Other payables and accruals


247,528,032



195,798,678



30,699,069










Total current liabilities


1,880,898,515



2,164,029,366



339,295,916










Deferred tax liabilities, non-current


45,382,710



48,524,633



7,608,127










Total liabilities


1,926,281,225



2,212,553,999



346,904,043










SHAREHOLDERS' EQUITY









Share capital


2,926,132



2,938,508



460,726

Additional paid-in capital


3,073,551,037



3,365,782,583



527,717,558

Statutory reserves


93,384,908



93,384,908



14,641,723

Accumulated other comprehensive (loss) / income


198,972,084



(164,319,915)



(25,763,549)

Retained Earnings


2,734,858,610



3,558,749,613



557,972,658










Total Ctrip's shareholders' equity


6,103,692,771



6,856,535,697



1,075,029,116










Noncontrolling interests


86,230,017



100,823,628



15,808,032










Total shareholders' equity


6,189,922,788



6,957,359,325



1,090,837,148










Total liabilities and shareholders' equity


8,116,204,013



9,169,913,324



1,437,741,191



Ctrip.com International, Ltd.












Consolidated Statements of Operations Information














Quarter Ended



Quarter Ended



Quarter Ended



 Quarter Ended 



September 30, 2010



June 30, 2011



September 30, 2011



September 30, 2011



RMB



RMB



RMB



 USD 



























(unaudited)



(unaudited)



(unaudited)



(unaudited)













Revenues:












Hotel reservation


349,655,584



366,453,694



410,428,429



64,350,647

Air-ticketing


315,236,102



347,339,141



385,068,223



60,374,447

Packaged tour


140,858,679



108,282,983



171,367,702



26,868,564

Corporate travel


33,938,560



39,560,736



43,367,133



6,799,488

Others


23,035,896



24,751,318



28,982,115



4,544,076













Total revenues


862,724,821



886,387,872



1,039,213,602



162,937,222













Less: business tax and related surcharges


(50,520,118)



(53,360,164)



(64,512,791)



(10,114,894)













Net revenues


812,204,703



833,027,708



974,700,811



152,822,328













Cost of revenues


(176,199,743)



(189,763,780)



(226,126,062)



(35,454,071)













Gross profit


636,004,960



643,263,928



748,574,749



117,368,257













Operating expenses:












Product development *


(123,199,772)



(136,823,269)



(161,579,311)



(25,333,852)

Sales and marketing *


(125,160,008)



(141,444,111)



(173,855,350)



(27,258,600)

General and administrative *


(79,623,531)



(96,617,795)



(108,847,827)



(17,066,138)













Total operating expenses


(327,983,311)



(374,885,175)



(444,282,488)



(69,658,590)













Income from operations


308,021,649



268,378,753



304,292,261



47,709,667













Interest income


9,767,903



23,045,312



31,233,511



4,897,070

Other income


44,345,553



17,520,128



54,347,195



8,521,040













Income before income tax expense and equity in income


362,135,105



308,944,193



389,872,967



61,127,777













Income tax expense


(62,186,716)



(47,954,023)



(82,055,004)



(12,865,319)

Equity in income of affiliates


23,192,105



4,681,110



20,372,237



3,194,142













Net income


323,140,494



265,671,280



328,190,200



51,456,600













Less: Net income attributable to noncontrolling interests


(3,001,333)



(1,968,908)



(2,909,902)



(456,241)













Net income attributable to Ctrip's shareholders


320,139,161



263,702,372



325,280,298



51,000,359













Earnings per ordinary share












- Basic


8.94



7.33



9.02



1.41

- Diluted


8.42



6.90



8.54



1.34













Earnings per ADS












- Basic


2.23



1.83



2.26



0.35

- Diluted


2.11



1.72



2.13



0.33













Weighted average ordinary shares outstanding












- Basic


35,815,709



35,962,623



36,049,244



36,049,244

- Diluted


38,005,087



38,237,702



38,102,980



38,102,980













* Share-based compensation charges included are as follows:












 Product development


16,583,720



24,155,875



26,713,733



4,188,418

 Sales and marketing


8,168,446



11,940,120



12,693,885



1,990,261

 General and administrative


35,491,501



51,104,033



51,099,151



8,011,783



Ctrip.com International, Ltd.









Reconciliation of  GAAP and Non-GAAP Results









(In RMB, except % and per share information)




























Quarter Ended September 30, 2011


GAAP Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue










Product development 

(161,579,311)

17%


26,713,733

3%


(134,865,578)

14%

Sales and marketing 

(173,855,350)

18%


12,693,885

1%


(161,161,465)

17%

General and administrative 

(108,847,827)

11%


51,099,151

5%


(57,748,676)

6%

Total operating expenses

(444,282,488)

46%


90,506,769

9%


(353,775,719)

36%










Income from operations

304,292,261

31%


90,506,769

9%


394,799,030

41%










Net income attributable to Ctrip's shareholders

325,280,298

33%


90,506,769

9%


415,787,067

43%










Diluted earnings per ordinary share (RMB)

8.54



2.38



10.91











Diluted earnings per ADS (RMB)

2.13



0.59



2.73











Diluted earnings per ADS (USD)

0.33



0.09



0.43





















Quarter Ended June 30, 2011


GAAP Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue










Product development 

(136,823,269)

16%


24,155,875

3%


(112,667,394)

14%

Sales and marketing 

(141,444,111)

17%


11,940,120

1%


(129,503,991)

16%

General and administrative 

(96,617,795)

12%


51,104,033

6%


(45,513,762)

5%

Total operating expenses

(374,885,175)

45%


87,200,028

10%


(287,685,147)

35%










Income from operations

268,378,753

32%


87,200,028

10%


355,578,781

43%










Net income attributable to Ctrip's shareholders

263,702,372

32%


87,200,028

10%


350,902,400

42%










Diluted earnings per ordinary share (RMB)

6.90



2.28



9.18











Diluted earnings per ADS (RMB)

1.72



0.57



2.29











Diluted earnings per ADS (USD)

0.27



0.09



0.35





















Quarter Ended September 30, 2010


GAAP Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue










Product development 

(123,199,772)

15%


16,583,720

2%


(106,616,052)

13%

Sales and marketing 

(125,160,008)

15%


8,168,446

1%


(116,991,562)

14%

General and administrative 

(79,623,531)

10%


35,491,501

4%


(44,132,030)

5%

Total operating expenses

(327,983,311)

40%


60,243,667

7%


(267,739,644)

33%










Income from operations

308,021,649

38%


60,243,667

7%


368,265,316

45%










Net income attributable to Ctrip's shareholders

320,139,161

39%


60,243,667

7%


380,382,828

47%










Diluted earnings per ordinary share (RMB)

8.42



1.59



10.01











Diluted earnings per ADS (RMB)

2.11



0.40



2.50











Diluted earnings per ADS (USD)

0.31



0.06



0.37




















Notes for all the 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=RMB6.378 on September 30, 2011 published by the Federal Reserve Board.










Note 2: Effective on January 21, 2010, Company changed ratio of the American Depositary Shares (“ADSs”) to ordinary shares from two (2) ADSs representing one (1) ordinary share to four (4) ADSs representing one (1) ordinary share.   The change is reflected retroactively in the numbers for all the periods presented above.



SOURCE Ctrip.com International, Ltd.



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