NetDragon Websoft Inc. Announces 2010 Interim Financial Results
HONG KONG, Aug. 19 /PRNewswire-Asia-FirstCall/ -- NetDragon Websoft Inc. ("NetDragon" or "the Company", Stock Code: 777), a leading online game developer and operator in China, today announced its interim unaudited financial results for the six months ended June 30th, 2010 and will host a conference call and webcast to review its interim unaudited financial results and recent developments at 8:00PM Hong Kong Time / 8:00AM Eastern Daylight Time, August 19th, 2010.
Liu Dejian, Chairman and Executive Director of NetDragon said, "Following a strong rebound in the net profit margin in the first quarter, we were able to maintain profitability in our core online games businesses during the second quarter. Our cost control and resource optimization efforts are making a positive impact on our organization, and creating a solid foundation upon which future growth can be layered."
Regarding the Company's mobile business, Mr. Liu commented, "Based on the existing solid user base, NetDragon is further exploring business opportunities in this field. By cooperating with downstream and upstream participants, including both operators and third-party developers, we expect to build an extensive business platform which allows more creative elements to join in and work together to expand the mobile content and services industry, thus maintaining our competitive edge in the long term."
Mr. Liu concluded, "With the rapid evolution of the online gaming and mobile industries and heightened competition therein, NetDragon is focused on introducing successful operational experiences into the research and development of new products, resulting in the healthy circulation between R&D and operations, to create more commercially viable games and mobile offerings at appropriate costs. Utilizing this approach, we are confident about the development of both the industry and NetDragon."
2010 1H Business Highlights
-- Traditional Chinese version of "Way of the Five" entered open beta in
January
-- NetDragon received multiple awards including recognition as a "Top 10
Games Developer in China for 2009" and "Overseas Expansion Award for
National Games for 2009" at the 2009 China Game Industry Annual
Conference in January
-- Released a new Chinese expansion pack "Galactic Armada" for "Zero
Online" in February, based on the multi-player space battleships system,
and adopting more interaction in the game, which brings players with
more challenging experiences and feelings
-- NetDragon was elected as Fujian Animation Game Industry Association
Chief and recognized as "Fujian Animation & Game R&D Centre" at the
2010 Fujian Animation & Game Industry Annual Conference in March, which
shows NetDragon's leading position in Western Strait Cultural and
Creative Industry
-- Cooperate with Saigon Tel over Vietnamese version of "Conquer Online"
in March
-- Chairman and Executive Director of NetDragon Liu Dejian was honored
with "10th Fujian Science & Technology Award for Youth" in March
-- Released a Portuguese EP "The Divine Path" for "Eudemons Online" in
April
-- From April to June, released English, French, Spanish and Arabic
versions of Conquer Online's EP "Legends Return Season I"
-- Released a new Chinese expansion pack "Legends Return" for "Conquer
Online" in May
-- "Disney Fantasy Online" advanced into its final stage of open beta
testing and Chinese female singer Li Yuchun was signed as the game's
spokesperson in May
-- Released English EP- "Galactic Armada" for "Zero Online" in May
-- "Dungeon Keeper Online" and "Cross Gate" started 2nd round of closed
beta testing in May
-- NetDragon was selected as the sole designated IT supporter for the
Fujian Pavilion at the Expo 2010 Shanghai China in May
-- Showcased at Cross-Straits Conference and attended the Cross-Straits
Copyright (Creative) Industry Summit Forum as the only corporate entity
in May
-- NetDragon won 3 awards at "SISS in China" Conference in May,
demonstrating its leading position in internal process management
-- Vietnamese version of "Eudemons Online" entered open beta in June
Recent Developments
-- "CJ7 Online", a Q-style turn-based MMORPG adapting the storyline of
Stephen Chow's same name movie, entered open beta testing in July.
-- "Tian Yuan", a fantasy MMORPG, entered open beta testing in July
-- NetDragon introduced Malaysian EP "The Divine Path" for "Eudemons
Online" in July
-- NetDragon and Hasbro entered into an agreement to develop and publish
an MMORPG based on Hasbro's iconic TRANSFORMERS brand in Asia,
Russia/CIS and MENA. The action-oriented PC online game "TRANSFORMERS
Online" is expected to officially roll-out in 2011 in China as well as
other select markets in Asia, MENA and Russia/CIS.
-- At the 8th China Digital Entertainment Expo & Conference in July, CEO
of NetDragon, Liu Luyuan was invited to address a speech at the CGBC
Overseas Development & Cooperation Forum as the pioneer for China's
online gaming overseas expansion
-- The Board has resolved to declare an interim dividend of HKD0.05 per
share for the six months ended 30 June 2010, which will be paid to the
shareholders whose names appeared on the register of members of the
Company on 2 September 2010.
Business Outlook
-- "Dungeon Keeper Online", NetDragon's first 3D MMORPG, is expected to
enter open beta testing in 2H 2010
-- "Way of the Five" 2.0 version is expected to be launched in 2H 2010
-- "Stock Tycoon" is expected to enter open beta testing in 2H 2010
-- NetDragon is enriching its product pipeline and developing different
genres of games targeting different groups of players, and expects to
launch "Cross Gate", "Doomsday" and "Legend of the Dark" covering ARPG,
FPS and ACT game types in future
-- As for the mobile business, a new version of 91 PC Suite integrating
platforms including Symbian, Android and Windows Mobile is expected to
release in 2H 2010; we are also cooperating with China Mobile's "Mobile
Market" by establishing a MM cooperative operation platform on the 91
mobile entertainment portal, in a move to further consolidate our
leadership in this field.
Management Conference Call
NetDragon will host a conference call and webcast to review its interim unaudited financial results for the six months ended June 30th, 2010 at 8:00PM Hong Kong Time/8:00AM Eastern Daylight Time, Thursday, August 19th, 2010.
Details of the investor conference call are as follows:
Time: 8:00PM Hong Kong Time / 8:00AM Eastern Daylight Time,
August 19th, 2010
Dial in numbers:
International Toll 1-617-213-8851
US Toll Free 1-866-831-5605
Hong Kong Toll Free 1-800-96-3844
South China Toll Free 10-800-130-0399
North China Toll Free 10-800-152-1490
Passcode 30488977
Replay service is available from 11:00PM August 19 to 12:00PM, August 26, 2010. Below are the replay numbers for different regions. International Toll: 1-617-801-6888; US Toll Free: 1-888-286-8010; Replay passcode: 54495316. 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 "2010 Interim Results Conference Call" and follow the registration instructions.
About NetDragon
NetDragon Websoft Inc. is a leading innovator and creative force in China's online gaming industry. Established in 1999, NetDragon has been operating and developing a broad range of MMORPGs since launching its first self-made title Monster & Me in 2002. In addition, NetDragon is China's pioneer in overseas expansion, having directly operated its titles in overseas markets since 2004 in English, Spanish, Arabic and other foreign languages. NetDragon's game portfolio comprises a range of massively multiplayer online games that cater to various types of players and gaming preferences. Current offerings include the games Eudemons Online, Conquer Online, Zero Online, Way of the Five, Heroes of Might & Magic Online, Disney Fantasy Online and Tian Yuan. NetDragon also has multiple games currently in development, including Dungeon Keeper Online, Transformers Online, Doomsday, Cross Gate, Legend of the Dark and a new version of Ultima Online.
Financial Highlights
RMB('000) 2Q 2010 1Q 2010 QoQ(%) 1H 2010 1H 2009 YoY(%)
Revenue 120,120 139,476 (13.9%) 259,596 336,769 (22.9%)
Gross Profit 103,490 120,759 (14.3%) 224,249 294,056 (23.7%)
GPM 86.2% 86.6% (0.4%) 86.4% 87.3% (0.9%)
Profit for the
period 1,504 21,169 (92.9%) 22,673 66,392 (65.9%)
NPM 1.3% 15.2% (13.9%) 8.7% 19.7% (11.0%)
EPS-Basic
(RMB cents) 0.29 4.03 (92.8%) 4.33 12.63 (65.7%)
EPS-Diluted
(RMB cents) 0.29 4.03 (92.8%) 4.33 12.62 (65.7%)
Metrics
2Q 2010 1Q 2010 4Q 2009 3Q 2009 2Q 2009 1Q 2009
PCU 449,000 451,000 492,000 519,000 632,000 695,000
ACU 217,000 230,000 253,000 273,000 310,000 333,000
Note: Online games include Conquer Online, Eudemons Online, Zero Online,
Tou Ming Zhuang Online, Heroes of Might and Magic Online, Way of the
Five, Disney Fantasy Online, Tian Yuan and other games
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED 30 JUNE 2010
Three Months Ended Six Months Ended
30/6/2010 31/3/2010 30/6/2010 30/6/2009
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB '000 RMB '000 RMB '000 RMB '000
Revenue 120,120 139,476 259,596 336,769
Cost of revenue (16,630) (18,717) (35,347) (42,713)
Gross profit 103,490 120,759 224,249 294,056
Other income and gains 9,286 5,660 14,946 11,387
Selling and marketing
expenses (26,630) (22,197) (48,827) (67,195)
Administrative expenses (42,004) (42,176) (84,180) (79,375)
Development costs (35,638) (39,739) (75,377) (87,769)
Other expenses (2,532) (928) (3,460) (412)
Net loss on derivative
financial instruments -- -- -- (15,214)
Net gain on financial assets
designated as fair value
through profit or loss -- -- -- 18,431
Share of losses of jointly
controlled entities -- -- -- (724)
Profit before taxation 5,972 21,379 27,351 73,185
Taxation (4,468) (210) (4,678) (6,793)
Profit for the period 1,504 21,169 22,673 66,392
Other comprehensive income
(expenses):
Exchange differences arising
on translation of foreign
operations 8 20 28 (198)
Total comprehensive income
for the period 1,512 21,189 22,701 66,194
Profit for the period
attributable to:
- Owners of the Company 1,548 21,215 22,763 66,392
- Non-controlling interests (44) (46) (90) --
1,504 21,169 22,673 66,392
Total comprehensive income
attributable to:
- Owners of the Company 1,556 21,235 22,791 66,194
- Non-controlling interests (44) (46) (90) --
1,512 21,189 22,701 66,194
RMB RMB RMB RMB
cents cents cents cents
Earnings per share
- Basic 0.29 4.03 4.33 12.63
- Diluted 0.29 4.03 4.33 12.62
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2010
30 June 2010 31 December 2009
RMB '000 RMB '000
(Unaudited) (Audited)/
(Restated)
Non-current assets
Property, plant and equipment 142,937 138,011
Prepaid lease payments 54,889 12,917
Deposit paid for acquisition of
property, plant and equipment 33,225 8,895
Intangible assets 12,342 12,980
Interests in jointly controlled entities -- --
Available-for-sale investments 4,000 4,000
Loan receivables 6,713 7,313
Deferred tax assets 54 54
254,160 184,170
Current assets
Prepaid lease payments 1,101 228
Loan receivables 452 893
Trade receivables 19,319 14,128
Other receivables, prepayments and
deposits 52,643 66,272
Held for trading investments -- 377
Amount due from a shareholder 781 --
Advance to a jointly controlled entity -- 29,000
Tax recoverable 5,347 20
Bank deposits 299,643 551,970
Bank balances and cash 898,905 705,053
1,278,191 1,367,941
Current liabilities
Trade payables 697 285
Other payables and accruals 41,201 67,881
Deferred income 18,951 18,189
Amount due to a related company 34 --
Income tax payable 13,082 9,935
73,965 96,290
Net current assets 1,204,226 1,271,651
1,458,386 1,455,821
Capital and reserves
Share capital 39,264 39,264
Share premium and reserves 1,419,696 1,417,041
Equity attributable to owners of the
Company 1,458,960 1,456,305
Non-controlling interests (574) (484)
1,458,386 1,455,821
SOURCE NetDragon Websoft Inc.
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