E-House Reports First Quarter 2015 Results

19 May, 2015, 06:27 ET from E-House (China) Holdings Limited

SHANGHAI, May 19, 2015 /PRNewswire/ -- E-House (China) Holdings Limited ("E-House" or the "Company") (NYSE: EJ), a leading real estate services company in China, today announced its unaudited financial results for the fiscal quarter ended March 31, 2015.

First Quarter 2015 Financial Highlights

  • Total revenues increased by 4% year-on-year to $169.1 million
    • Revenues from real estate online services increased by 19% year-on-year to $93.4 million, including $67.1 million in revenues from e-commerce services, which grew by 35% year-on-year
  • Non-GAAP[1] net loss attributable to E-House shareholders was $18.2 million, or $0.13 loss per diluted American depositary share ("ADS")

[1] E-House uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to E-House shareholders, (4) net income (loss) attributable to E-House shareholders per basic ADS, and (5) net income (loss) attributable to E-House shareholders per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. See "About Non-GAAP Financial Measures" and "Unaudited Reconciliation of GAAP and Non-GAAP Results" below for more information about the non-GAAP financial measures included in this press release.

Xin Zhou, E-House's co-chairman and CEO, said, "Seasonality and a later than usual Chinese New Year holiday contributed to a slow real estate market in the first quarter with a low volume of transactional activities, which negatively impacted our results. However, the overall market began to improve toward the end of March, driven in part by the government's loosened credit policies and improved sentiment toward the industry, which in turn resulted in increased transaction volumes and improved performances in our traditional businesses."

Mr. Zhou continued, "We are pleased to see our new business lines continue their rapid development and new business models begin to take shape. Our community value-added services app Shi Hui is now firmly established as a mobile platform that provides mobile marketing solutions to accurately-targeted users. Shi Hui has also started penetrating further into local communities through partnerships with various property management companies. We launched Shi Hui in an additional 30 cities this week, and as a result Shi Hui now covers 40 cities with a user base exceeding 4.5 million people and over 400,000 daily active users.

"We have also seen a number of positive developments in our financial services platform. As part of this platform, E-House currently holds a 33% stake in Jupai Holdings, Ltd. ("Jupai"), a leading third-party wealth management services provider in China. As we announced last month, E-House has entered into a definitive agreement to transfer E-House Capital, our asset management business, into Jupai in exchange for additional equity ownership. Another part of our financial services platform, our P2P real estate financial services website www.fangjs.com, has attracted over 21,000 individual investors with a total capital flow of approximately RMB390 million (approximately $64 million)."

Bin Laurence, E-House's CFO, said, "As expected, the first quarter was a seasonally weak quarter with moderate overall revenue growth for the Company. In addition, due to our previously announced investments in and expansion of new business lines, our profit margin has been negatively impacted in recent quarters. We believe that such investments will add new drivers to the Company's longer term growth, particularly as we start to develop clear business models for these new businesses."

First Quarter 2015 Results

Total revenues were $169.1 million, an increase of 4% from $163.3 million for the same quarter of 2014, primarily driven by the growth of revenues from real estate online services.

Revenues from real estate online services were $93.4 million, an increase of 19% from $78.5 million for the same quarter of 2014, mainly contributed by growth of revenues in e-commerce services. Revenues from e-commerce services were $67.1 million, an increase of 35% from $49.7 million for the same quarter of 2014, primarily due to the expansion of the Company's e-commerce business through partnerships with property developers. Revenues from online advertising services were $22.5 million, a decrease of 8% from $24.6 million for the same quarter of 2014, primarily due to the slowdown in primary home sales. Revenues from listing services were $3.8 million, a decrease of 9% from $4.2 million for the same quarter of 2014, primarily due to discounts offered by the Company to secondary agencies.

Revenues from real estate brokerage services were $58.7 million, a decrease of 4% from $61.1 million for the same quarter of 2014. Real estate brokerage services include primary real estate agency services and secondary real estate brokerage services. Revenues from primary real estate agency services were $56.7 million, a decrease of 4% from $59.3 million for the same quarter of 2014. The decrease was caused by the decrease in the total gross floor area ("GFA") of new properties sold and the total transaction value of new properties sold compared to the same quarter of 2014 (see "Selected Operating Data" below for more details on the total GFA and transaction value of new properties sold), which was partially offset by the increase of average commission rate. Revenues from secondary real estate brokerage services were $2.0 million, a slight increase from $1.8 million for the same quarter of 2014.

Revenues from real estate information and consulting services were $13.1 million, a decrease of 26% compared to $17.8 million for the same quarter of 2014, mostly due to decreased revenue in consulting services as a result of a low volume of real estate activities in the first quarter of 2015.

Revenues from other services were $3.9 million, a decrease of $2.0 million from $5.9 million for the same quarter of 2014. Other services include offline real estate advertising services, promotional events services, real estate fund management services and real estate financial services. The revenue decrease from other services in the first quarter was primarily due to the decrease in revenues from offline promotional events services.

No material revenue was generated from community value-added services in the first quarter.

Cost of revenues was $66.2 million, an increase of 12% from $59.0 million for the same quarter of 2014, mostly due to increased staff costs from primary real estate agency services and real estate online services, partially offset by decreased staff commissions, in line with the decreased revenues.

Selling, general and administrative ("SG&A") expenses were $139.9 million, an increase of 33% from $104.9 million in the same quarter of 2014, primarily due to higher marketing and promotion expenses for real estate online services, as well as $8.5 million in expenses related to community value-added services and real estate financial services, both of which commenced in the third quarter of 2014.

Loss from operations was $36.6 million, compared to $0.04 million income from operations for the same quarter of 2014. Non-GAAP loss from operations was $26.9 million, compared to $10.1 million non-GAAP income from operations for the same quarter of 2014.

Net loss was $30.4 million, compared to $1.2 million net income for the same quarter of 2014. Non-GAAP net loss was $21.6 million, compared to $10.3 million non-GAAP net income for the same quarter of 2014.

Net loss attributable to E-House shareholders was $25.1 million, or $0.18 loss per diluted ADS, compared to $2.9 million net income attributable to E-House shareholders, or $0.02 per diluted ADS, for the same quarter of 2014. Non-GAAP net loss attributable to E-House shareholders was $18.2 million, or $0.13 loss per diluted ADS, compared to $11.9 million non-GAAP net income attributable to E-House shareholders, or $0.08 per diluted ADS, for the same quarter of 2014.

Cash Flow

As of March 31, 2015, the Company's cash and cash equivalents balance was $458.9 million.

First quarter 2015 net cash used in operating activities was $120.1 million, mainly attributable to non-GAAP net loss of $21.6 million, an increase in properties held for sale and advance payment for properties to be held for sale of $38.7 million, an increase in customer deposits of $23.4 million, a decrease in payroll and welfare payables of $24.6 million and a decrease in income tax payable of $13.6 million. Net cash used in investing activities was $62.4 million, mainly comprised of a $34.1 million payment for restricted cash as collateral of bank loans, a $24.4 million payment for the purchase of property and equipment and a $4.6 million prepayment for business acquisition. Net cash proceeds provided by financing activities were $11.8 million, mainly comprised of $29.7 million cash received from a long-term loan, partially offset by $12.9 million in dividends paid to shareholders and a $6.1 million payment for the acquisition of the remaining non-controlling interests in the Company's online business made in 2014.

Business Outlook

The Company maintains its fiscal year 2015 total revenues guidance of approximately $1.05 billion to $1.10 billion, which would represent an increase of approximately 16% to 22% from $904.5 million in 2014. This forecast reflects the Company's current and preliminary view, which is subject to change.

Conference Call Information

E-House's management will host an earnings conference call on May 19, 2015 at 8:15 a.m. U.S. Eastern Time (8:15 p.m. Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

U.S./International: +1-845-675-0437 Hong Kong:          +852-3018-6771 Mainland China:   800-819-0121

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "E-House earnings call."

A replay of the conference call may be accessed by phone at the following number until May 27, 2015:

US/International:  +1-646-254-3697 Hong Kong:         +852-3051-2780 Mainland China:   800-870-0205 Passcode:           43387052

Additionally, a live and archived webcast will be available at http://ir.ehousechina.com.

About E-House

E-House (China) Holdings Limited ("E-House") (NYSE: EJ) is China's leading real estate services company with a nationwide network covering more than 260 cities. E-House offers a wide range of services to the real estate industry, including real estate online services through our 70%-owned subsidiary, Leju Holdings Limited (NYSE: LEJU), primary sales agency, secondary brokerage, information and consulting, offline advertising and promotion, real estate investment management and financial services, and community value-added services. E-House has received numerous awards for its innovative and high-quality services, including "China's Best Company" from the National Association of Real Estate Brokerage and Appraisal Companies and "China Enterprises with the Best Potential" from Forbes. For more information about E-House, please visit http://www.ehousechina.com.

Safe Harbor: Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "may," "intend," "confident," "is currently reviewing," "it is possible," "subject to" and similar statements. Among other things, the Business Outlook section and quotations from management in this press release, as well as E-House's strategic and operational plans, contain forward-looking statements. E-House may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, including Forms 20-F and 6-K, 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 E-House's beliefs and expectations, are forward-looking statements and are subject to change. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this press release. Potential risks and uncertainties include, but are not limited to, a severe or prolonged downturn in the global economy, E-House's susceptibility to fluctuations in the real estate market of China, government measures aimed at China's real estate industry, failure of the real estate services industry in China to develop or mature as quickly as expected, diminution of the value of E-House's brand or image, E-House's inability to successfully execute its strategy of expanding into new geographical markets in China, E-House's failure to manage its growth effectively and efficiently, E-House's failure to successfully execute the business plans for its strategic alliances and other new business initiatives, E-House's loss of its competitive advantage if it fails to maintain and improve its proprietary CRIC system or to prevent disruptions or failure in the system's performance, E-House's failure to compete successfully, fluctuations in E-House's results of operations and cash flows, E-House's reliance on a concentrated number of real estate developers, natural disasters or outbreaks of health epidemics and other risks outlined in E-House's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of this press release, and E-House does not undertake any obligation to update any such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement E-House's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), E-House uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to E-House shareholders, (4) net income (loss) attributable to E-House shareholders per basic ADS, and (5) net income (loss) attributable to E-House shareholders per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

E-House believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expense and amortization of intangible assets resulting from business acquisitions, which may not be indicative of E-House's operating performance. These non-GAAP financial measures also facilitate management's internal comparisons to E-House's historical performance and assist its financial and operational decision making. A limitation of using these non-GAAP financial measures is that share-based compensation expense and amortization of intangible assets resulting from business acquisitions that may continue to exist in E-House's business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliation between non-GAAP financial measures and their most comparable GAAP financial measures.

For investor and media inquiries please contact:

In China:

Ms. Michelle Yuan
Director of Investor Relations
E-House (China) Holdings Limited
Phone: +86 (21) 6133-0754
E-mail: michelleyuan@ehousechina.com

Mr. Derek Mitchell
Ogilvy Financial
In the U.S.: +1 (646) 867-1888
In China: +86 (10) 8520-6139
E-mail: ej@ogilvy.com

 


E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEET
(In thousands of U.S. dollars)










December 31,


 March 31,




2014


2015

ASSETS










Current assets










Cash and cash equivalents




630,617




458,867


Restricted cash




40,402




39,913


Customer deposits, net




92,797




116,162


Accounts receivable, net




415,150




409,002


Advance payment for properties, current




51,983




90,902


Properties held for sale




34,842




29,581


Deferred tax assets, net




64,805




64,555


Prepaid expenses and other current assets




39,339




41,302


Amounts due from related parties




6,094




2,850


Total current assets




1,376,029




1,253,134


Property and equipment, net




49,109




48,809


Intangible assets, net




120,381




126,813


Investment in affiliates




51,681




52,006


Goodwill




51,540




51,477


Customer deposits, non-current, net




797




615


Investment in preferred shares of a private entity




39,485




41,181


Restricted cash, non-current




-




34,027


Other non-current assets




87,902




114,323


Total assets




1,776,924




1,722,385












LIABILITIES AND EQUITY










Current liabilities










Short-term borrowings




35,954




35,818


Accounts payable




8,261




6,415


Accrued payroll and welfare expenses




116,577




92,200


Income tax payable




117,594




104,177


Other tax payable




49,390




44,406


Amounts due to related parties




7,356




8,169


Advance from property buyers




2,261




4,322


Advance from customers and deferred revenue




19,013




19,849


Dividend payables.




12,902




21,362


Liabilities for exclusive right, current




-




12,211


Other current liabilities




85,837




76,059


Total current liabilities




455,145




424,988


Deferred tax liabilities




28,203




28,105


Convertible senior notes




132,752




133,030


Other non-current liabilities




658




30,189


Total liabilities




616,758




616,312


Equity










Ordinary shares ($0.001 par value): 1,000,000,000 and 1,000,000,000 shares authorized, 142,123,368 and 142,326,313 shares issued and outstanding, as of December 31, 2014 and March 31, 2015, respectively




142




142


Additional paid-in capital




991,646




975,335


Subscription receivables




(196)




(13)


Accumulated deficit




(67,703)




(92,841)


Accumulated other comprehensive income




83,901




83,043


Total E-House equity




1,007,790




965,666


Non-controlling interests




152,376




140,407


Total equity




1,160,166




1,106,073


TOTAL LIABILITIES AND EQUITY




1,776,924




1,722,385


 

E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data and per share data)








Three months ended




March 31,




2014


2015





















Revenues




163,311




169,145


Cost of revenues




(59,023)




(66,200)


Selling, general and administrative expenses




(104,921)




(139,853)


Other operating income




671




300


Income (loss) from operations




38




(36,608)












Interest expenses




(1,346)




(2,306)


Interest income




735




1,266


Other income, net




125




716


Loss before taxes and equity in affiliates




(448)




(36,932)


Income tax benefit




93




6,843


Loss before equity in affiliates




(355)




(30,089)


Income (loss) from equity in affiliates




1,575




(336)


Net income (loss)




1,220




(30,425)












Less: net loss attributable to non-controlling interests




(1,682)




(5,288)


Net income (loss) attributable to E-House shareholders




2,902




(25,137)












Earnings (loss) per share:










 Basic




0.02




(0.18)


 Diluted




0.02




(0.18)


Shares used in computation:










 Basic




137,879,853




142,219,580


 Diluted




147,465,064




142,219,580












Note 1: The conversion of Renminbi ("RMB") amounts into USD amounts is based on the rate of USD1 = RMB6.1422 on March 31, 2015 and USD1 = RMB6.1364 for the three months ended March 31, 2015

 

E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)








Three months ended




March 31,




2014


2015











Net income (loss)




1,220




(30,425)


Other comprehensive loss, net of tax of nil










Foreign currency translation adjustment




(5,697)




(2,791)


Unrealized holding gains for investment in preferred shares of a private entity




-




1,696












Comprehensive loss




(4,477)




(31,520)












Less: Comprehensive loss attributable to non-controlling interest




(2,002)




(5,524)


Comprehensive loss attributable to E-House shareholders




(2,475)




(25,996)


 

E-HOUSE (CHINA) HOLDINGS LIMITED
Unaudited Reconciliation of GAAP and Non-GAAP Results
(In thousands of U.S. dollars, except share data and per ADS data)







Three months ended




March 31,




2014


2015




(unaudited)


(unaudited)












GAAP income (loss) from operations



38




(36,608)



Share-based compensation expense



5,115




6,332



Amortization of intangible assets resulting from business acquisitions



4,923




3,350



Non-GAAP income (loss) from operations



10,076




(26,926)













GAAP net income (loss)



1,220




(30,425)



Share-based compensation expense (net of tax)



5,115




6,332



Amortization of intangible assets resulting from business acquisitions (net of tax)



3,919




2,512



Non-GAAP net income (loss)



10,254




(21,581)













GAAP net income (loss) attributable to E-House Shareholders

 



2,902




(25,137)



Share-based compensation expense (net of tax and non-controlling interests)



5,115




5,133



Amortization of intangible assets resulting from business acquisitions (net of tax and non-controlling interests)



3,847




1,779



Non-GAAP net income (loss) attributable to E-House shareholders



11,864




(18,225)













GAAP net income (loss) per ADS -- basic



0.02




(0.18)













GAAP net income (loss) per ADS -- diluted



0.02




(0.18)













Non-GAAP net income (loss) per ADS -- basic



0.09




(0.13)













Non-GAAP net income (loss) per ADS -- diluted



0.08




(0.13)













Shares used in calculating basic GAAP / non-GAAP net income (loss) attributable to shareholders per ADS



137,879,853




142,219,580













Shares used in calculating diluted GAAP/ non-GAAP net income (loss) attributable to shareholders per ADS



147,465,064




142,219,580
























 

E-HOUSE (CHINA) HOLDINGS LIMITED
SELECTED OPERATING DATA






Three months ended



March 31,



2014


2015

Primary real estate agency services









Total Gross Floor Area ("GFA") of new properties sold (thousands of square meters)



4,472




4,419


Total value of new properties sold (millions of RMB)



41,874




37,848


Total value of new properties sold (millions of $)



6,843




6,168











E-commerce services

 









Number of discount coupons issued to prospective purchasers (number of transactions)



48,440




40,765


Number of discount coupons redeemed (number of transactions)



33,872




32,111


 

 

 

SOURCE E-House (China) Holdings Limited



RELATED LINKS

http://www.ehousechina.com