SouFun Announces Second Quarter 2012 Results and Dividend Plan

BEIJING, Aug. 16, 2012 /PRNewswire-Asia/ -- SouFun Holdings Limited (NYSE: SFUN) ("SouFun"), the leading real estate and home furnishing Internet portal in China, today announced its unaudited financial results for the second quarter ended June 30, 2012 and its dividend plan.

Second Quarter 2012 Highlights

  • Revenues in the second quarter of 2012 were US$97.0 million, a 20.4% increase from the corresponding period in 2011.
  • Operating income in the second quarter of 2012 was US$47.0 million, a 27.3% increase from the corresponding period in 2011. Non-GAAP operating income in the second quarter of 2012 was US$48.2 million, a 25.7% increase from the corresponding period in 2011. 
  • Net income attributable to shareholders recorded a year-over-year increase of 41.1% to US$32.3 million, or US$0.40 per fully diluted share. Non-GAAP net income attributable to shareholders recorded a year-over-year increase of 21.1% to US$38.8 million, or US$0.48 per fully diluted share.

First Half 2012 Highlights

  • Revenues in the first half of 2012 were US$155.5 million, a 28.1% increase from the corresponding period in 2011.
  • Operating income in the first half of 2012 was US$60.7 million, a 41.7% increase from the corresponding period in 2011. Non-GAAP operating income in the first half of 2012 was US$63.1 million, a 36.5% increase from the corresponding period in 2011. 
  • Net income attributable to shareholders recorded a year-over-year increase of 63.5% to US$46.9 million, or US$0.58 per fully diluted share. Non-GAAP net income attributable to shareholders recorded a year-over-year increase of 33.2% to US$52.9 million, or US$0.65 per fully diluted share.

"We are delighted to report another solid quarter, even under China's volatile real estate market condition." said Vincent Mo, Executive Chairman of SouFun. "Our solid fundamentals with strong brand, effective website platform, innovative products and services supported our continued growth. We believe that China's real estate market is stabilizing and SouFun is well positioned to capture the immense opportunities in China's real estate and home furnishing industries."

Second Quarter 2012 Results

SouFun reported total revenues of US$97.0 million for the second quarter of 2012, representing an increase of 20.4% from the corresponding period in 2011.

Revenue from marketing services was US$55.7 million for the second quarter of 2012, a slight decrease of 2.9% from the corresponding period in 2011, due primarily to an offset by the rapid growth of SouFun's e-commerce service which has been mainly tested in Beijing and Shanghai.

Revenue from listing services was US$15.5 million for the second quarter of 2012, a decrease of 11.9% from the corresponding period in 2011, due primarily to the challenging environment in the resale market.

Revenue from e-commerce services was US$24.4 million for the second quarter of 2012, a substantial increase from US$4.6 million for the same period in 2011. The increase came mainly from our innovative SouFun card membership services. We began offering paid SouFun card membership services to property buyers to facilitate their transactions with property developers since the second quarter of 2011. This innovative service has been tested very effective in primary property transactions.

Revenue from other value-added services and products was US$1.4 million for the second quarter of 2012, an increase of 32.6% from the corresponding period in 2011.

Cost of revenue was US$18.2 million, an increase of 15.2% from the corresponding period in 2011. The increase is primarily due to increased staff cost and business taxes associated with the increase in revenues.

Gross margin was 81.2%, compared with 80.4% for the corresponding period in 2011.

Operating expenses were US$31.8 million, an increase of 14.2% from the corresponding period in 2011.

Selling expenses were US$17.1 million, an increase of 16.7% from the corresponding period in 2011, due primarily to increased staff cost.

General and administrative expenses were US$14.7 million, an increase of 11.5% from the corresponding period in 2011, due primarily to increased staff cost.

Operating Income was US$47.0 million, an increase of 27.3% from the corresponding period in 2011. Non-GAAP operating income was US$48.2 million, an increase of 25.7% from the corresponding period in 2011.

Income tax expense was US$17.6 million, an increase of 8.0% compared to US$16.3 million for the corresponding period in 2011.

Net income attributable to shareholders was US$32.3 million, an increase of 41.1% from the corresponding period in 2011. Earnings per fully diluted share was US$0.40, compared with US$0.27 for the corresponding period in 2011.

Non-GAAP net income attributable to shareholders was US$38.8 million, an increase of 21.1% from the corresponding period in 2011. Non-GAAP earnings per fully diluted share was US$0.48, compared with US$0.38 for the corresponding period in 2011.

As of June 30, 2012, SouFun had cash, cash equivalents, and short-term investments (excluding the effect from available-for-sale securities) of US$190.6 million, compared to US$158.3 million as of December 31, 2011. Cash flow from operating activities was US$43.9 million for the second quarter of 2012, compared to US$33.9 million for the same period of 2011.

Dividend

SouFun's Board of Directors has approved a cash dividend of US$1.00 per share on the Company's ordinary shares. Each of the SouFun's American depositary shares ("ADS") represents one ordinary share. SouFun plans to make the dividend payment in the third quarter of 2012.

Business Outlook

SouFun raises its revenue guidance for fiscal year of 2012 from between US$380.0 million and US$400.0 million to between US$390.0 million and US$410.0 million, representing a year-on-year increase of 13.4% to 19.2%.  This forecast reflects SouFun's current and preliminary view, which is subject to change.

Conference Call Information

SouFun' management team will host a conference call on August 16, 2012 at 8 a.m. U.S. Eastern Time (8 p.m. Beijing/Hong Kong time).

The dial-in details for the live conference call are:

US: +1 718 354 1231/ 1 866 519 4004
International: +65 6723 9381
Hong Kong: +852 2475 0994 /800 930 346
Mainland China: 800 819 0121 / 400 620 8038
Passcode: SFUN

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.

A telephone replay of the call will be available after the conclusion of the conference call at 11:00 a.m. U.S. Eastern Time on August 16 through August 23, 2012. The dial-in details for the telephone replay are:

US Toll Free: 1866 214 5335
US Toll: +1 718 354 1232
Conference ID # 18518353

A live and archived webcast of the conference call will be available on SouFun's website at http://ir.soufun.com.

About SouFun

SouFun operates the leading real estate Internet portal and home furnishing and improvement website in China in terms of the number of page views and visitors to its website in 2012. SouFun has built a large and active community of users who are attracted by the comprehensive real estate and home furnishing and improvement content available on its portal that forms the foundation of its service offerings. SouFun currently maintains 105 offices to focus on local market needs and its website and database contains real estate-related content coverage of 314 cities in China. For more information about SouFun, please visit http://ir.soufun.com.

Safe Harbor Statements

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking 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 "will," "expects," "is expected to," "anticipates," "aim," "future," "intends," "plans," "believes," "are likely to," "estimates," "may," "should" and similar expressions. Such forward-looking statements include, without limitation, statements regarding the outlook for the fiscal year of 2012 and comments by management in this release about SouFun's strategic and operational plans and focus, current and future market positions, and growth momentum, and about China's real estate and home furnishings market. SouFun may also make forward-looking statements in our periodic reports to the U.S. Securities and Exchange Commission, in our annual report to shareholders, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about SouFun'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, SouFun's limited operating history, the current global financial and credit markets crisis and its potential impact on the Chinese economy, measures taken or to be taken by the Chinese government to control real estate growth and prices and other events which could recur in the future, challenges in China's real estate market including secondary home sales, the impact of competitive market conditions for our services, the uncertain regulatory landscape in China, fluctuations in SouFun's quarterly operating results, our continued ability to execute business strategies including our SouFun card membership services, our ability to continue to expand in local markets, our reliance on online advertising sales and listing services for our revenues, any failure to successfully develop and expand our content, service offerings and features, including the success of new features to meet evolving market needs, and the technologies that support them, and, should we in the future make acquisitions, any failure to successfully integrate acquired businesses. 

Further information regarding these and other risks and uncertainties is included in our annual report on form 20-F and other documents filed with the U.S. Securities and Exchange Commission. SouFun does not assume any obligation to update any forward-looking statements in this release and elsewhere, which apply only as of the date of this press release.

About Non-GAAP Financial Measures

To supplement SouFun's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), SouFun uses in this press release the following measures defined as non-GAAP financial measures by the United States Securities and Exchange Commission: (1) operating income, (2) net income and (3) basic and diluted earnings per ordinary share. The presentation of the non-GAAP financial information 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 "Reconciliation of GAAP and non-GAAP Results" set forth at the end of this press release.

SouFun believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expenses, which (1) may not be indicative of SouFun's recurring core business operating results or (2) are not expected to result in future cash payments. These non-GAAP financial measures also facilitate management's internal comparisons to SouFun'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 has been and will continue to be a significant recurring expense that will continue to exist in SouFun'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 directly comparable GAAP financial measures.

For investor and media inquiries, please contact:

Dr. Hua Lei
SouFun Holdings Limited
Tel: +86 (10) 5930 6425
E-mail: ir@soufun.com

 

SouFun Holdings Limited

Unaudited Condensed Consolidated Balance Sheets

 ( in U.S. dollars in thousands )

ASSETS


June 30,


December 31,


2012

2011

Current assets:








Cash and cash equivalents



157,439



150,414


Restricted cash, current



35,678



35,814


Short-term investments



34,345



8,592


Accounts receivable, net



40,311



27,697


Prepayment and other current assets



15,717



9,695


Loan receivable



-



26,143


Amounts due from related parties



1,397



1,595


Deferred tax assets, current



869



1,602

Total current assets 



285,756



261,552

Non-current assets:








Property and equipment, net



80,318



68,064


Restricted cash, non-current portion



261,926



247,631


Deferred tax assets, non current



858



1,407


Other non-current assets



1,797



1,717

Total non-current assets



344,899



318,819

Total assets



630,655



580,371









LIABILITIES AND SHAREHOLDERS' EQUITY







Current liabilities:








Short-term loans



270,570



255,570


Deferred revenue



91,834



73,620


Accrued expenses and other liabilities



71,271



52,490


Dividend payable



-



51,969


Income tax payable



8,012



16,158

Total current liabilities



441,687



449,807

Non-current liabilities:








Deferred tax liabilities, non-current



44,763



38,581

Total non-current liabilities



44,763



38,581

Total Liabilities  



486,450



488,388









Shareholders' equity:








Class A and Class B Ordinary shares (par value of HK$1
    per share: 600,000,000 shares authorized; 78,150,568
    (Class A-53,813,918 and Class B-24,336,650 ) with
    par value of US$10,032 (Class A-US$6,908 and Class
    B-US$3,124) and 78,967,883 (Class A-54,631,233 and
    Class B 24,336,650 ) with par value of US$10,137
    (Class A-US$7,013 and Class B-US$3,124) shares
    issued and outstanding as of December 31, 2011 and
    June 30, 2012)



 

 

 

10,137



 

 

 

10,032


Additional paid-in capital



56,259



49,838


Accumulated other comprehensive income



20,750



21,853


Retained earnings



57,059



10,185

Total SouFun Holdings Limited shareholders' equity



144,205



91,908


Noncontrolling interests



-



75

Total shareholders' equity



144,205



91,983








TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY



630,655



580,371


 

SouFun Holdings Limited

Unaudited Condensed Consolidated Statements of Operations

( in U.S. dollars in thousands, except share data and per ADS data )



Three months ended

Six months ended




June 30,


June 30,


June 30,


June 30,



2012


2011


2012


2011

Revenues:













  Marketing services


$

55,658


$

57,301


$

89,910


$

85,491

  Listing services



15,535



17,635



26,469



28,912

  E-commerce services



24,417



4,581



36,462



4,676

  Other value-added services



1,378



1,039



2,637



2,266

Total revenues



96,988



80,556



155,478



121,345














Cost of Revenues:













  Cost of services



(18,208)



(15,802)



(34,730)



(29,020)

Total Cost of Revenues



(18,208)



(15,802)



(34,730)



(29,020)














Gross Profit



78,780



64,754



120,748



92,325














Operating expenses:













  Selling expenses



(17,136)



(14,689)



(31,594)



(26,876)

  General and administrative expenses



(14,655)



(13,149)



(28,478)



(22,615)

Total Operating Expenses



(31,791)



(27,838)



(60,072)



(49,491)














Operating Income



46,989



36,916



60,676



42,834














  Foreign exchange gain (loss)



57



(26)



55



-

  Interest income



4,529



2,178



8,956



3,555

  Interest expense



(2,076)



(285)



(4,169)



(327)

  Realized gain-trading securities



-



151



-



206

Government grants



486



311



923



810

  Other-than-temporary impairment on

     available-for-sale securities



-



-



(14)



-

Income before income taxes and noncontrolling interests



49,985



39,245



66,427



47,078

Income tax expenses













  Income tax expense



(17,645)



(16,331)



(19,553)



(18,422)

Net income



32,340



22,914



46,874



28,656

  Net income attributable to noncontrolling interests



-



8



-



 

13

Net income attributable to SouFun Holdings Limited shareholders


 

$

32,340


 

$

22,922


 

$

46,874


 

$

 

28,669

Other comprehensive income, net of tax













  Foreign currency translation



(1,242)



(356)



(1,103)



1,957

Total other comprehensive income, net of tax



(1,242)



(356)



(1,103)



1,957

Comprehensive income



31,098



22,566



45,771



30,626

Earnings per share for Class A and Class B ordinary shares













Basic


$

0.42



0.30



0.61



0.38

Diluted


$

0.40



0.27



0.58



0.34














Weighted average number of Class A and Class B ordinary shares outstanding:













Basic



76,878,518



76,324,682



77,241,192



76,195,218

Diluted



81,392,881



83,604,880



81,328,134



83,335,199

















 

SouFun Holdings Limited

Reconciliation of GAAP and Non-GAAP Results

 ( in U.S. dollars in thousands, except share data and per share data)




Three months ended


Six months ended



June 30,


June 30,


June 30,


June 30,



2012


2011


2012


2011

GAAP income from operations


46,989


36,916


60,676


42,834

Share-based compensation


1,202


1,431


2,465


3,422

Non-GAAP income from operations


48,191


38,347


63,141


46,256










GAAP net income


32,340


22,914


46,874


28,656

One-off tax benefit


-


-


(1,631)


-

Withholding tax related to dividends


5,209


7,649


5,209


7,649

Other-than-temporary impairment on available-for-sale securities


-


-


14


-

Share-based compensation


1,202


1,431


2,465


3,422

Non-GAAP net income


38,751


31,994


52,931


39,727










Net Income attributable to
SouFun Holdings Limited shareholders                                   


32,340


22,922


46,874


28,669

One-off tax benefit


-


-


(1,631)


-

Withholding tax related to dividends


5,209


7,649


5,209


7,649

Other-than-temporary impairment on available-for-sale securities


-


-


14


-

Share-based compensation expense


1,202


1,431


2,465


3,422

Non-GAAP net Income attributable to SouFun Holdings Limited shareholders


38,751


32,002


52,931


39,740










GAAP earnings per share for Class A and Class B ordinary shares:









Basic


0.42


0.30


0.61


0.38

Diluted


0.40


0.27


0.58


0.34

Non-GAAP earnings per share for Class A and Class B ordinary shares:









Basic


0.51


0.42


0.69


0.52

Diluted


0.48


0.38


0.65


0.48

Weighted average number of Class A and Class B ordinary shares outstanding:









Basic


76,878,518


76,324,682


77,241,192


76,195,218

Diluted                                                                                                                         


81,392,881


83,604,880


81,328,134


83,335,199

 

 

SOURCE SouFun Holdings Limited



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