NetDragon Websoft Inc. Announces 2013 Second Quarter and Interim Results 2Q Revenues Increased 19.5% Over 1Q 2013; Net Profit Increased 32.6% Over 1Q 2013

Online Games and Mobile Internet Businesses Maintained Steady Growth

HONG KONG, Aug. 23, 2013 /PRNewswire/ -- NetDragon Websoft Inc. ("NetDragon"; Stock Code: 777), a leading developer and operator of online games and mobile Internet platforms in China, today announced its interim financial results for the period ended June 30, 2013. A conference call and webcast is scheduled for August 23, 2013 at 7:00pm Hong Kong time (7:00am Eastern Standard Time, August 23) to review the company's performance and recent business developments.

Second Quarter 2013 Financial and Operational Highlights

  • Total revenues were RMB 426.1 million, up 19.5% over the first quarter of 2013("QoQ") and up 54.3% over the second quarter of 2012("YoY");
  • Revenue from Online Games was RMB 224.2 million, up 5.7% QoQ and up 11.5% YoY;
  • Revenue from Mobile Internet was RMB 201.9 million, up 39.5% QoQ and up 168.8% YoY;
  • Gross profit was RMB 385.5 million, up 24.3% QoQ and up 65.0% YoY;
  • Operating profit was RMB 204.3 million, up 59.5% QoQ and up 131.4% YoY;
  • Non-GAAP operating profit1 was RMB 236.5 million, up 34.8% QoQ and up 143.6% YoY;
  • Profit attributable to the owners of the Company was RMB 124.6 million, up 11.5% QoQ and up 176.7% YoY;
  • Non-GAAP profit attributable to the owners of the Company was RMB 156.7 million, up 15.0% QoQ and up 98.0% YoY;
  • Profit for the period was RMB 154.3 million, up 32.6% QoQ and up 243.0% YoY;
  • Non-GAAP profit for the period was RMB 186.4 million, up 32.4% QoQ and up 135.6% YoY;
  • Basic earnings per share ("EPS") for the second quarter of 2013 were RMB 24.65, while diluted EPS were RMB 24.48;
  • Peak concurrent users ("PCU") for online games were 468,000, up 5.2% QoQ and down 19.6% YoY;
  • Average concurrent users ("ACU") for online games were 255,000, up 7.6% QoQ and down 16.9% YoY;
  • The Board has resolved to declare an interim dividend of HK$ 0.20 per share on 19 September 2013 for the six months ended June 30, 2013, which will be paid to shareholders whose names appeared in the company registry on 9 September 2013. In addition, based on the Announcement on August 16, the Directors of NetDragon intend to use 50% of the net proceeds from the merger between 91 Wireless and Baidu as a special dividend to the Shareholders.

1 See "Non-GAAP Financial Measures" section for more details on the reasons for presenting these measures

Mr. Liu Dejian, Chairman and Executive Director of NetDragon, commented, "During the first half of 2013, our revenue and net profit maintained steady growth, with total revenue increasing 52.6% over the first half of 2012 to RMB 783 million and net profit up 168.4% year over year to RMB 271 million. We are pleased with the financial and operational performance for the period and we are confident about the prospects for our company."

"Online games revenue continues to grow at a solid pace during the first half of this year, demonstrating the healthy development of our traditional online games business. New expansion packs ("EP") for our classic titles Eudemons Online and Zero Online were released during the second quarter. These new EPs undoubtedly enhanced the appeal of our titles to our new and existing users and contribute to the company's cash income."

"In the first half of this year, mobile game market in general continued to demonstrate blockbuster growth in China. We are now developing mobile games with full force to benefit from the rapid growth of the market by pursuing available opportunities. The upcoming mobile versions for our mature PC games, such as Eudemons Online, will enrich our core PC game portfolio and we have confident that it will be quickly favored by our users. Thanks to the large existing player base and our good reputation among our users. In addition, we are also accelerating the timetable on development and launching of our new mobile games. The focus on both PC-based and mobile games demonstrates our strong capabilities in innovation and development."

"We are excited about the performance of our mobile Internet business. As of June 30, revenue from our mobile Internet business increased by 187.6% year over year to RMB 347 million in the first half of this year. The users number of our major marketplaces has been continuously expanding as well, further solidify the leadership position for our two application distribution platforms in 91 Wireless."

"On August 14, NetDragon announced that its subsidiary 91 Wireless Websoft had entered into an Agreement and Plan of Merger with Baidu (Hong Kong) Limited ("Baidu", a wholly-owned subsidiary of Baidu, Inc.). We see there is tremendous potential from the long-term synergy between Baidu and 91 Wireless on businesses and strategies, strengthening 91 Wireless' presence in mobile Internet market. In addition, with the new financial resources, our proven track record in incubating online and high-growth opportunity projects, along with our strong team of R&D talents and professionals, we will consolidate our leading position in the online and mobile game segment, and most importantly, explore new opportunities with high growth potential. We believe that NetDragon will advance to a new stage of development with a brilliant outlook, and that our management will continue to create optimal value for our shareholders."

Second Quarter 2013 Business Highlights

Online Games

  • Eudemons Online's new EP, "Dawn of Romance" was officially released. The new EP with a focus on love and marriage resonates with the emotional side among our players and received a favor response from our players.
  • Zero Online's new EP "The One" was launched on May 31, driving the game to a record high in monthly revenue in June.
  • iPad based Conquer Online launched a new EP "The Oriental Assassin" in May.
  • The Celestial Saga, a 2.5D role-play mobile game based on NetDragon's in-house developed C3 game engine, conducted the first closed beta testing on May 23.
  • NetDragon launched the updated versions for sell-developed cross-platform mobile games, such as "Chaos Hero" and "Legend of the Emperor" etc., to enrich the detail of the games, so as to attract more players.
  • Warring States, NetDragon's self-developed 2D SLG mobile game, launched its Korean version in June, successfully attracting Korean players and expanding into the Korean market.

Mobile Internet

  • In June, 2013, 91 Assistant was awarded with the "Gold Finger" Comprehensive Application Platform in the 2013 Global Excellent Mobile Terminal and Mobile Application of the Year Contest organized by iiMedia Research.

Recent Developments and Business Outlook

Online Games

  • Way of the Five's new EP "Catastrophe in Fairland*", was released on July 5.
  • Caliber of Spirit, the world's first next generation 3D MOBA online game based on NetDragon's in-house developed S3 game engine, conducted the official open beta testing on Tencent's QQGAME platform in July.
  • Tou Ming Zhuang Online's new EP "Ce Ma Tian Xia*" is scheduled for release in the third quarter of this year.
  • The new EP for multilingual versions of Conquer Online, "Jianghu: Era of Chaos" is on track to be released in the third quarter of this year, and the mobile version of Conquer Online is scheduled for launch within the year.
  • Ago of Egmont, NetDragon's first fantasy ARPG, will carry out a closed beta testing on August 20.
  • In August, Changyou.com, Sohu's subsidiary, under an exclusive arrangement with NetDragon, will publish "War of Gods", NetDragon's self-developed anime style cultivated strategic game, on App Store in mainland China.
  • Mobile version of Eudemons Online is scheduled to enter closed beta testing in the fourth quarter of this year.

Mobile Internet

  • On August 14, NetDragon announced that its subsidiary 91 Wireless Websoft has entered into an Agreement and Plan of Merger with Baidu (Hong Kong) Limited ("Baidu", a wholly-owned subsidiary of Baidu, Inc.). The aggregate merger consideration ("consideration") amounts to US$ 1,900 million (approximately HK$ 14,740 million). Taking into account the conditional declaration of a special dividend of approximately US$ 52.06 million (approximately HK$ 403.91 million) by 91 Wireless to its existing shareholders, the consideration has been adjusted to approximately US$ 1,847.94 million (approximately HK$ 14,336.13 million). Upon completion of the transaction, 91 Wireless shall terminate its application for the proposed listing of 91 Wireless shares on the GEM of the Hong Kong Stock Exchange. The transaction is subject to approval by NetDragon's shareholders at an extraordinary general meeting.

Others

  • On 22 July 2013 and 23 July 2013, NetDragon repurchased a total of 794,500 shares and 2,000,000 shares on the Stock Exchange, representing approximately 0.156% and 0.393% of the existing issued shares capital, at an aggregate consideration of HK$ 50,948,020.

*Working Titles

Financial Highlights:

RMB('000)

2Q 2013

1Q 2013

2Q 2012

QoQ(%)

YoY(%)

1H 2013

1H 2012

YoY(%)

Revenue

426,116

356,725

276,133

19.5%

54.3%

782,841

513,108

52.6%

-Online Games

224,159

211,994

200,992

5.7%

11.5%

436,153

392,573

11.1%

-Mobile Internet*

201,957

144,731

75,141

39.5%

168.8%

346,688

120,535

187.6%

Gross Profit

385,483

310,066

233,675

24.3%

65.0%

695,549

442,375

57.2%

GPM

90.5%

86.9%

84.6%

3.6%

5.9%

88.8%

86.2%

2.6%

Operating Profit

204,293

128,091

88,289

59.5%

131.4%

332,384

160,481

107.1%

Non-GAAP Operating

Profit 

236,468

175,456

97,072

34.8%

143.6%

411,924

171,927

139.6%

Profit attributable to

the owners of the

Company

124,614

111,787

45,032

11.5%

176.7%

236,401

100,803

134.5%

Non-GAAP profit

attributable to the

owners of the

Company

156,732

136,245

79,154

15.0%

98.0%

292,977

146,059

100.6%

Profit for the period

154,288

116,382

44,986

32.6%

243.0%

270,670

100,859

168.4%

Non-GAAP Profit for

the period

186,406

140,840

79,108

32.4%

135.6%

327,246

146,115

124.0%

NPM

36.2%

32.6%

16.3%

3.6%

19.9%

34.6%

19.7%

14.9%

EPS-Basic

 (RMB cents)

24.65

22.19

8.75

11.1%

181.7%

46.84

19.65

138.4%

EPS-Diluted

 (RMB cents)

24.48

16.91

8.73

44.8%

180.4%

41.12

19.61

109.7%

*Note: Mobile Internet revenue derived from third party apps and content with cooperation partners was recognized on gross basis for the first half of 2012. Whereas, this item was recognized on a net basis instead of gross basis since the third quarter of 2012.

Metrics

Online Games


2Q 2013

1Q 2013

4Q 2012

3Q 2012

2Q 2012

1Q 2012

PCU

468,000

445,000

521,000

525,000

582,000

600,000

ACU

255,000

237,000

287,000

281,000

307,000

297,000

Non-GAAP Financial Measures

To supplement the consolidated results of the Group prepared in accordance with HKFRSs, the use of certain non-GAAP measures is provided solely to enhance the overall understanding of the Group's current financial performance. These non-GAAP measures are not expressly permitted measures under HKFRSs and may not be comparable to similarly titled measures for other companies. The non-GAAP financial measures of the Group exclude share-based payment expense, interest income on pledged bank deposit, exchange gain (loss) on pledged bank deposit, secured bank borrowing and redeemable convertible preferred shares, net gain (loss) on derivative financial instruments and finance costs.

Management Conference Call

NetDragon will host a management conference call and webcast to review its 2013 interim financial results ended June 30, 2013 on Friday, August 23, 2013 Hong Kong time.

Details of the live conference call are as follows:

Time: 7:00 PM Beijing / Hong Kong Time / 7:00 AM Eastern Standard Time, 23 August, 2013

International Toll 

65-6723-9381

US Toll Free

1-866-519-4004

Hong Kong Toll Free

800-930-346

China Toll Free (for fixed line users)

800-8190-121

China Toll Free (for mobile users)

400-6208-038

Passcode

NetDragon

A live and archived webcast of the conference call will be available on the Investor Relations section of NetDragon's website at http://ir.netdragon.com/investor/ir_events.shtml. Participants in the live webcast should visit the aforementioned website 10 minutes prior to the call, then click on the icon for "2013 Interim Results Conference Call" and follow the registration instructions.

About NetDragon

NetDragon Websoft Inc. (HKSE: 0777) is a leading innovator and creative force in China's online gaming and mobile Internet industries. Established in 1999, we are a vertically integrated developer & operator of online games and mobile Internet platforms. We launched our first self-made online game Monster & Me in 2002, followed by multiple titles including Eudemons Online, Conquer Online and Zero Online. We are also China's pioneer in overseas expansion, directly operating titles in overseas markets since 2003 in English, Spanish, Arabic and other languages. NetDragon has proven track record in incubating online gaming and mobile Internet projects over the years, including the No. 1 Chinese online game portal - 17173.com, and various well-known mobile Internet platforms such as 91 Assistant, HiMarket, 91 Launcher, 91 Panda Reader, sj.91.com and www.hiapk.com.

For investor enquiries, please contact:

NetDragon Websoft Inc.

Ms. Maggie Zhou

Investor Relations Director

Tel.:

+86 591 8754 3120

Email:

maggie@nd.com.cn


ndir@nd.com.cn

Website:

www.nd.com.cn/ir

 


CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

 FOR THE THREE MONTHS AND SIX MONTHS ENDED 30 JUNE 2013












Three Months Ended


Six Months Ended



30/6/2013


31/3/2013 


30/6/2013 


30/6/2012 



RMB '000


RMB '000


RMB '000


RMB '000



(unaudited)


(unaudited)


(unaudited) 


(unaudited)

Revenue 


426,116


356,725


782,841


513,108

Cost of revenue


(40,633)


(46,659)


(87,292)


(70,733)










Gross profit


385,483


310,066


695,549


442,375

Other income and gains


7,186


15,217


22,403


15,167

Selling and marketing expenses


(39,109)


(35,510)


(74,619)


(70,565)

Administrative expenses


(84,616)


(102,822)


(187,438)


(113,181)

Development costs


(55,288)


(54,660)


(109,948)


(95,950)

Other expenses


(8,956)


(4,820)


(13,776)


(16,707)

Share of losses of associates 


(312)


(393)


(705)


(658)

Share of (loss) profit of a joint venture


(95)


1,013


918


-

Operating Profit


204,293


128,091


332,384


160,481










Interest income on pledged bank deposit


1,896


1,925


3,821


-

Exchange gain (loss) on pledged bank

     deposit, secured bank borrowing and

     redeemable convertible preferred shares


7,683


(4,653)


3,030


(1,423)

Net (loss) gain on derivative financial instruments


(8,015)


38,360


30,345


(23,339)

Finance costs


(1,507)


(12,725)


(14,232)


(9,048)

Profit before taxation


204,350


150,998


355,348


126,671

Taxation


(50,062)


(34,616)


(84,678)


(25,812)

Profit for the period


154,288


116,382


270,670


100,859










Other comprehensive (expense) income:









Item that may be reclassified subsequently

     to profit or loss: 









Exchange differences arising on

     translation of foreign operations


(513)


(112)


(625)


72

Total comprehensive income for the period


153,775


116,270


270,045


100,931










Profit for the period attributable to:









     - Owners of the Company


124,614


111,787


236,401


100,803

     - Non-controlling interests


29,674


4,595


34,269


56



154,288


116,382


270,670


100,859

Total comprehensive income attributable to:









     - Owners of the Company


124,101


111,675


235,776


100,875

     - Non-controlling interests


29,674


4,595


34,269


56



153,775


116,270


270,045


100,931












RMB cents


RMB cents


RMB cents


RMB cents

Earnings per share









- Basic 


24.65


22.19


46.84


19.65

- Diluted


24.48


16.91


41.12


19.61

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(AS AT 30 JUNE 2013)



30 June 2013


31 December 2012


(Unaudited)


(Audited)


RMB '000


RMB '000

Non-current assets




Property, plant and equipment

423,296


345,415

Prepaid lease payments

185,989


139,678

Investment property

15,931


16,217

Intangible assets

1,769


2,626

Interests in associates

1,926


11,793

Interests in a jointly venture

18,933


18,015

Available-for-sale investments

5,000


5,000

Loan receivables

9,652


9,969

Goodwill

12,534


12,534

Deferred tax assets

4,436


1,586


679,466


562,833

Current assets




Prepaid lease payments

2,902


2,902

Loan receivables

2,590


3,143

Trade receivables

84,516


61,427

Other receivables, prepayments and deposits

107,779


72,101

Held for trading investments

-


4,939

Amounts due from related companies

3,598


3,637

Amount due from a joint venture

1,288


3,060

Pledged bank deposit

-


194,405

Bank deposits

425,713


394,081

Bank balances and cash

1,409,797


1,142,825


2,038,183


1,882,520

Current liabilities




Trade and other payables

298,364


222,137

Deferred income

27,960


24,778

Amounts due to related companies

525


121

Amount due to an associate

-


5,600

Secured bank borrowing

-


183,595

Other financial liability

-


10,679

Income tax payable

74,693


66,355


401,542


513,265

Net current assets

1,636,641


1,369,255

Total assets less current liabilities

2,316,107


1,932,088





Non-current liabilities




Redeemable convertible preferred shares

-


195,115

Conversion option derivative liability

-


314,829

Deferred tax liabilities

17,959


6,141






17,959


516,085





Net assets

2,298,148


1,416,003





Capital and reserves




Share capital

37,761


37,532

Share premium and reserves

1,942,066


1,356,317

Equity attributable to owners of the Company

1,979,827


1,393,849

Non-controlling interests

318,321


22,154

Total equity

2,298,148


1,416,003

 

SOURCE NetDragon Websoft Inc.



RELATED LINKS
http://www.netdragon.com/
http://ir.netdragon.com/investor/ir_events.shtml
http://www.nd.com.cn/ir

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.