Ctrip Reports Third Quarter 2013 Financial Results

SHANGHAI, Nov. 5, 2013 /PRNewswire/ -- Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider of hotel accommodations, ticketing services, packaged tours and corporate travel management in China, today announced its unaudited financial results for the third quarter ended September 30, 2013.

Highlights for the Third Quarter of 2013

  • Net revenues were RMB1.5 billion (US$252 million) for the third quarter of 2013, up 31% year-on-year.
  • Gross margin was 75% for the third quarter of 2013, compared to 76% in the same period of 2012.
  • Income from operations was RMB300 million (US$49 million) for the third quarter of 2013, up 58% year-on-year. Excluding share-based compensation charges (non-GAAP), income from operations was RMB408 million (US$67 million), up 37% year-on-year.
  • Operating margin was 19% for the third quarter of 2013, compared to 16% in the same period of 2012. Excluding share-based compensation charges (non-GAAP), operating margin was 27%, compared to 25% in the same period of 2012.
  • Net income attributable to Ctrip's shareholders was RMB373 million (US$61 million) in the third quarter of 2013, up 92% year-on-year. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB482 million (US$79 million), up 59% year-on-year. 
  • Diluted earnings per ADS were RMB2.44 (US$0.40) for the third quarter of 2013. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB3.14 (US$0.51) for the third quarter of 2013.
  • Share-based compensation charges were RMB109 million (US$18 million), accounting for 7% of the net revenues, or RMB0.70 (US$0.11) per ADS for the third quarter of 2013.

"We are excited to report great results in the third quarter of 2013," said James Liang, Chairman of the Board and Chief Executive Officer of Ctrip. "We achieved strong growth in our major businesses and just recently saw the daily transaction value from Ctrip's mobile channels reach a record of RMB100 million. We expect mobile to become Ctrip's most important booking platform in the near future, and we will continue to extend our leadership in the online and mobile travel markets in China."

Third Quarter 2013 Financial Results and Business Updates

For the third quarter of 2013, Ctrip reported total revenues of RMB1.6 billion (US$268 million), representing a 32% increase from the same period of 2012. Total revenues for the third quarter of 2013 increased by 24% from the previous quarter.

Hotel reservation revenues amounted to RMB611 million (US$100 million) for the third quarter of 2013, representing a 34% increase year-on-year, primarily driven by an increase of 40% in hotel reservation volume and partially offset by the decrease of commission per room night. Hotel reservation revenues increased by 20% quarter-on-quarter, primarily driven by hotel reservation volume growth.

Ticketing services revenues for the third quarter of 2013 were RMB604 million (US$99 million), representing a 26% increase year-on-year, primarily driven by an increase of 31% in air ticketing sales volume and partially offset by the decrease of commission per ticket. Ticketing services revenues increased 16% quarter-on-quarter, primarily driven by air ticketing sales volume growth.

Packaged-tour revenues for the third quarter of 2013 were RMB320 million (US$52 million), representing a 43% increase year-on-year due to the increase of leisure travel volume. Packaged-tour revenues increased 71% quarter-on-quarter, primarily due to seasonality.

Corporate travel revenues for the third quarter of 2013 were RMB72 million (US$12 million), representing a 33% increase year-on-year, primarily driven by the increased corporate travel demand from business activities. Corporate travel revenues increased 9% quarter-on-quarter, primarily due to seasonality.

For the third quarter of 2013, net revenues were RMB1.5 billion (US$252 million), representing a 31% increase from the same period of 2012. Net revenues for the third quarter of 2013 increased by 24% from the previous quarter.

Gross margin was 75% in the third quarter of 2013, compared to 76% in the same period of 2012 and remained consistent with that in the previous quarter.

Product development expenses for the third quarter of 2013 increased by 38% to RMB335 million (US$55 million) from the same period of 2012 and by 8% from the previous quarter, primarily due to an increase in product development personnel related expense. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 20% of the net revenues, increased from 18% in the same period of 2012 and decreased from 22% in the previous quarter.

Sales and marketing expenses for the third quarter of 2013 increased by 17% to RMB355 million (US$58 million) from the same period in 2012 and by 31% 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 22% of the net revenues, decreased from 25% in the same period of 2012 and increased from 21% in the previous quarter.

General and administrative expenses for the third quarter of 2013 increased by 14% to RMB172 million (US$28 million) from the same period in 2012 and 9% from the previous quarter, primarily due to an increase in administrative related expenses. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 7% of the net revenues, decreased from 8% in the same period of 2012 and in the previous quarter.

Income from operations for the third quarter of 2013 was RMB300 million (US$49 million), representing an increase of 58% from the same period in 2012 and an increase of 53% from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB408 million (US$67 million), representing an increase of 37% from the same period in 2012 and an increase of 33% from the previous quarter.

Operating margin was 19% in the third quarter of 2013, compared to 16% in the same period of 2012 and in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 27%, increased from 25% in the same period of 2012 and in the previous quarter. 

The effective tax rate for the third quarter of 2013 was 22%, decreased from 24% in the same period of 2012 and 27% in the previous quarter, primarily due to the decrease in the amount of non tax-deductible share-based compensation as a percentage to our income as a whole.

Net income attributable to Ctrip's shareholders for the third quarter of 2013 was RMB373 million (US$61 million), representing an increase of 92% from the same period in 2012 and an increase of 77% from the previous quarter. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB482 million (US$79 million), representing an increase of 59% from the same period in 2012 and 50% from the previous quarter.

Diluted earnings per ADS were RMB2.44 (US$0.40) for the third quarter of 2013. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB3.14 (US$0.51) for the third quarter of 2013.

As of September 30, 2013, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB6.7 billion (US$1.1 billion).

Business Outlook

For the fourth quarter of 2013, the Company expects to continue the net revenue growth year-on-year at a rate of approximately 20-25%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.

Subsequent Events

In October 2013, Ctrip completed the offering of US$800 million principal amount of convertible senior notes due 2018 (the "notes"). The notes bear an annual interest of 1.25%. The notes will be convertible into Ctrip's ADSs at the option of the holders, based on an initial conversion rate of 12.7568 of the Company's ADSs per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately US$78.39 per ADS), which represents an approximately 42.5% conversion premium over the closing trading price of the Company's ADSs on October 10, 2013, the date when the offering was priced.

Management Promotions

Ctrip today announced the promotion of Ms. Jenny Wenjie Wu, the current Chief Financial Officer of the Company, to be Chief Strategy Officer in charge of new business development, investor relations and certain other related functions, and the promotion of Ms. Cindy Xiaofan Wang, the current Finance Vice President, to be Chief Financial Officer of the Company in charge of finance, overseas business operation and certain other related functions.

Conference Call

Ctrip's management team will host a conference call at 7:00PM U.S. Eastern Time on November 5, 2013 (or 8:00AM on November 6, 2013 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 +1.800.219.3192, International dial-in number +1.617.597.5412, Passcode 179 652 61#. For pre-registration, please click
https://www.theconferencingservice.com/prereg/key.process?key=PU7DLU9CY.

A telephone replay of the call will be available after the conclusion of the conference call until November 13, 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 86974702#.

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 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, ticketing services, 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 X 12928
Email: iremail@ctrip.com

 

Ctrip.com International, Ltd. 

Unaudited Condensed Consolidated Balance Sheets












December 31, 2012


September 30, 2013


September 30, 2013


RMB

RMB

USD








(unaudited)


(unaudited)


(unaudited)



ASSETS








Current assets:








Cash and cash equivalents


3,421,532,962


3,074,316,806


502,339,347


Restricted cash


768,228,577


739,168,630


120,779,188


Short-term investment 


1,408,664,335


2,910,609,793


475,589,835


Accounts receivable, net


983,804,403


1,552,182,097


253,624,526


Prepayments and other current assets


999,148,710


1,820,705,017


297,500,822


Deferred tax assets, current


61,840,526


98,208,774


16,047,185










Total current assets


7,643,219,513


10,195,191,117


1,665,880,903










Long-term deposits and prepayments     


210,618,310


226,604,505


37,026,880


Land use rights


110,659,284


108,224,205


17,683,694


Property, equipment and software


1,123,937,191


1,367,988,034


223,527,457


Investment


1,437,247,949


1,528,385,821


249,736,245


Goodwill


822,585,341


944,779,314


154,375,705


Intangible assets


321,483,420


358,219,821


58,532,650










Total assets


11,669,751,008


14,729,392,817


2,406,763,534










LIABILITIES








Current liabilities:








Short-term borrowings


453,478,628


536,996,185


87,744,475


Accounts payable


1,023,672,151


1,595,409,419


260,687,814


Salary and welfare payable


229,969,924


291,426,203


47,618,661


Taxes payable


216,456,010


317,400,093


51,862,760


Advances from customers


1,414,865,769


1,932,614,867


315,786,743


Accrued liability for customer reward program


217,548,153


263,195,944


43,005,873


Other payables and accruals


354,153,607


662,629,058


108,272,722










Total current liabilities


3,910,144,242


5,599,671,769


914,979,048










Deferred tax liabilities, non-current


53,309,153


63,206,572


10,327,871


Long-term Debt


1,121,418,000


1,101,600,000


180,000,000










Total liabilities


5,084,871,395


6,764,478,341


1,105,306,919










SHAREHOLDERS' EQUITY








Share capital


2,979,144


3,023,467


494,031


Additional paid-in capital


3,818,256,227


4,307,320,186


703,810,488


Statutory reserves


103,222,512


103,222,512


16,866,424


Accumulated other comprehensive loss


(58,778,675)


(14,238,203)


(2,326,504)


Retained Earnings


4,515,841,767


5,252,682,050


858,281,381


Treasury stock 


(1,891,888,900)


(1,891,888,900)


(309,132,173)










Total Ctrip's shareholders' equity


6,489,632,075


7,760,121,112


1,267,993,647










Noncontrolling interests


95,247,538


204,793,364


33,462,968










Total shareholders' equity


6,584,879,613


7,964,914,476


1,301,456,615










Total liabilities and shareholders' equity


11,669,751,008


14,729,392,817


2,406,763,534

 

Ctrip.com International, Ltd. 

Unaudited Condensed Consolidated Statements of Comprehensive Income














Quarter Ended


Quarter Ended


Quarter Ended


Quarter Ended


September 30, 2012

June 30, 2013

September 30, 2013

September 30, 2013


RMB

RMB

RMB

USD









(unaudited)


(unaudited)


(unaudited)


(unaudited)



Revenues:










Hotel reservation


457,041,173


510,977,850


610,653,418


99,779,970


Ticketing services **


478,367,942


522,013,771


604,272,344


98,737,311


Packaged tour


223,779,798


187,024,425


319,566,156


52,216,692


Corporate travel


54,073,606


65,944,003


71,852,907


11,740,671


Others


34,085,035


34,190,294


34,141,394


5,578,659












Total revenues


1,247,347,554


1,320,150,343


1,640,486,219


268,053,303












Less: business tax and related surcharges


(74,345,010)


(75,294,640)


(99,510,607)


(16,259,903)












Net revenues


1,173,002,544


1,244,855,703


1,540,975,612


251,793,400












Cost of revenues


(285,960,720)


(309,111,062)


(379,121,709)


(61,947,992)












Gross profit


887,041,824


935,744,641


1,161,853,903


189,845,408












Operating expenses:










Product development *


(243,244,924)


(309,851,724)


(335,461,829)


(54,814,024)


Sales and marketing *


(302,596,451)


(271,244,149)


(354,501,850)


(57,925,139)


General and administrative *


(151,107,619)


(158,708,095)


(172,348,825)


(28,161,573)












Total operating expenses


(696,948,994)


(739,803,968)


(862,312,504)


(140,900,736)












Income from operations


190,092,830


195,940,673


299,541,399


48,944,672












Interest income


54,099,884


43,062,336


52,612,266


8,596,775


Other income


6,104,967


24,056,241


67,808,945


11,079,893












Income before income tax expense and equity in income


250,297,681


263,059,250


419,962,610


68,621,340












Income tax expense


(59,394,448)


(70,419,098)


(92,166,420)


(15,059,873)


Equity in (loss)/income of affiliates


4,792,055


(4,525,873)


24,740,697


4,042,598












Net income


195,695,288


188,114,279


352,536,887


57,604,065












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


(1,878,491)


22,266,815


20,450,829


3,341,639












Net income attributable to Ctrip's shareholders


193,816,797


210,381,094


372,987,716


60,945,704












Comprehensive income


365,152,591


208,157,307


443,127,464


72,406,448












Earnings per ordinary share










- Basic


5.82


6.44


11.34


1.85


- Diluted


5.65


5.88


9.74


1.59












Earnings per ADS










- Basic


1.46


1.61


2.84


0.46


- Diluted


1.41


1.47


2.44


0.40












Weighted average ordinary shares outstanding










- Basic


33,287,150


32,677,730


32,887,276


32,887,276


- Diluted


34,283,839


36,573,910


38,745,348


38,745,348












* Share-based compensation charges included are as follows:










  Product development 


33,671,462


35,003,222


34,621,728


5,657,145


  Sales and marketing 


14,028,219


12,325,365


11,917,951


1,947,378


  General and administrative 


60,789,858


63,838,858


62,359,499


10,189,461












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

 


Ctrip.com International, Ltd. 

Reconciliation of  GAAP and Non-GAAP Results

(In RMB, except % and per share information)























Quarter Ended September 30, 2013



GAAP  Result

% of Net Revenues


Share-based Compensation

% of Net Revenues


Non-GAAP Result

% of Net Revenues












Product development 

(335,461,829)

22%


34,621,728

2%


(300,840,101)

20%


Sales and marketing 

(354,501,850)

23%


11,917,951

1%


(342,583,899)

22%


General and administrative 

(172,348,825)

11%


62,359,499

4%


(109,989,326)

7%


Total operating expenses

(862,312,504)

56%


108,899,178

7%


(753,413,326)

49%












Income from operations

299,541,399

19%


108,899,178

7%


408,440,577

27%












Net income attributable to Ctrip's shareholders

372,987,716

24%


108,899,178

7%


481,886,894

31%












Diluted earnings per ordinary share (RMB)

9.74



2.81



12.55













Diluted earnings per ADS (RMB)

2.44



0.70



3.14













Diluted earnings per ADS (USD)

0.40



0.11



0.51
























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
























Quarter Ended September 30, 2012



GAAP  Result

% of Net Revenues


Share-based Compensation

% of Net Revenues


Non-GAAP Result

% of Net Revenues












Product development 

(243,244,924)

21%


33,671,462

3%


(209,573,462)

18%


Sales and marketing 

(302,596,451)

26%


14,028,219

1%


(288,568,232)

25%


General and administrative 

(151,107,619)

13%


60,789,858

5%


(90,317,761)

8%


Total operating expenses

(696,948,994)

59%


108,489,539

9%


(588,459,455)

50%












Income from operations

190,092,830

16%


108,489,539

9%


298,582,369

25%












Net income attributable to Ctrip's shareholders

193,816,797

17%


108,489,539

9%


302,306,336

26%












Diluted earnings per ordinary share (RMB)

5.65



3.16



8.82













Diluted earnings per ADS (RMB)

1.41



0.79



2.20













Diluted earnings per ADS (USD)

0.22



0.13



0.35























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=RMB6.1200 on September 30, 2013 published by the Federal Reserve Board.












SOURCE Ctrip.com International, Ltd.



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