NetDragon Websoft Inc. Announces Fourth Quarter and Fiscal Year 2009 Financial Results
HONG KONG, April 15 /PRNewswire-Asia-FirstCall/ -- NetDragon Websoft Inc. ("NetDragon", with its subsidiaries collectively the "Group"; Stock Code: 777), a leading online game developer and operator in China, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2009.
Liu Dejian, Chairman and Executive Director of NetDragon, said: "2009 was a momentous year for NetDragon. Since our founding over a decade ago, we have continuously fostered a culture of creativity and innovation. Now, our R&D division comprises over 1500 staff, which will serve as the engine for our future growth in online games, multimedia and mobile products and services. With greater resources at our command, we are able to produce more and diversified content and applications, which we will offer over various digital conduits."
Mr. Liu continued: "This new decade holds much promise for NetDragon. In order to effectively realize our strategic goals, we will continue to optimize and transform our structure, and quickly adapt to the dynamic world in which we operate. Through upgrading our human resources, we are able to reduce the time to market of game expansion packs while creating a pipeline of a dozen new titles. We are also able to expand into synergistic yet new growth opportunities in an efficient manner, such as our 91 mobile platform, by leveraging common resources of our R&D engine. And as the developer of our products, we can continue to grow beyond our borders and seize the opportunities that the world offers. The opportunities are boundless, as is NetDragon."
Fourth Quarter 2009 Business Highlights
-- Licensed "Eudemons Online" in Russia and the CIS
-- Launched open beta test for "Tian Yuan" and "Disney Fantasy Online"
-- Conducted the first closed beta test for "Dungeon Keeper Online"
-- Included by Fortune Magazine (Chinese Edition) in its list of "2009
Outstanding Employers -- the Best Companies to Work for in China"
-- Chairman of NetDragon, Liu Dejian, was recognized as the "Annual
Outstanding Entrepreneur of 2009 in China's Game Industry" at the 2009
Annual Conference of Chinese e-Game Industry
Recent Developments
-- Traditional Chinese version of "Way of the Five" entered open beta test
in January 2010
-- NetDragon received the "Overseas Expansion Award for National Games for
2009," as well as recognition as a "Top 10 Game Developer for 2009" at
the 2009 China Game Industry Annual Conference in January 2010
-- Released a new Chinese expansion pack "Star Fleets" for "Zero Online"
in February 2010
-- Launched closed beta test for "CJ7 Online" in March 2010
-- The Board of Directors has recommended a final dividend of HKD0.05 per
share for the year ended December 31, 2009, subject to shareholder
approval at the Annual General Meeting on May 28, 2010.
Business Outlook
-- Open beta tests of "CJ7 Online" and "Dungeon Keeper Online" are
expected in the coming months; games under development include "Cross
Gate(*)", "New Ultima Online" and "Doomsday(*)"
-- New expansion packs "Eudemons Clan(*)", " Magic Legend(*)", and
"Phoenix Returns(*)" for "Eudemons Online", "Conquer Online" and
"Heroes of Might and Magic Online", respectively, are expected in
1H 2010
-- Continue to invest in mobile software platform and applications, to lay
foundation for Group's multimedia development
-- Further optimize the human resources and management structure, and
continuously enhance the efficiency of development and marketing
departments
(*) Working titles
Management Conference Call
NetDragon will host a management conference call and webcast to review its results and recent developments, at 9:00 AM, April 16, 2010 Hong Kong Time, which corresponds to 9:00 PM, April 15, 2010 Eastern Daylight Time.
Dial in details for the live conference call are as follows:
Dial in numbers:
International Toll 1-617-597-5307
US Toll Free 1-866-713-8307
Hong Kong Toll Free 800-96-3844
South China Toll Free 10-800-130-0399
North China Toll Free 10-800-152-1490
Passcode 97511562
Replay service is available from 12:00 PM April 16 to April 23, 2010. Below are the replay numbers for different regions. International Toll: 1-617-801-6888; US Toll Free: 1-888-286-8010; Replay passcode: 12766909. 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 "4Q and Fiscal Year 2009 Earnings 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.
The Group'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 Way of the Five, Eudemons Online, Conquer Online, Zero Online, Heroes of Might & Magic Online, Disney Fantasy Online and Tian Yuan. The Group also has multiple games currently in development, including CJ7 Online, Dungeon Keeper Online, Cross Gate, Doomsday and a new version of Ultima Online.
2009 Fiscal Year Business Review
-- "Way of the Five" launched open beta test in March 2009 and was awarded
as "The Best Q-style Online Game for 2009" by Golden Plume Awards; and
licensed its Traditional Chinese version in Taiwan, Hong Kong and Macau
-- Two expansion packs of "Eudemons Online" -- "The Divine Path" and
"Demon Rising" have been launched in both Chinese and English;
"Eudemons Online" also licensed its Vietnamese and Russian versions in
Vietnam, Russia and CIS Region respectively
-- Released "The Warlords", the English version of "Tou Ming Zhuang
Online" and licensed its Vietnamese version in Vietnam
-- Released Chinese EP -- "Expanding Horizons" for "Zero Online", and
licensed corresponding versions of "Zero Online" in Thailand, Vietnam
and Japan
-- Launched Gold Edition: "Heroes of Might and Magic Online"
-- Launched open beta test for the Arabic version of "Conquer Online" in
the MENA markets, marking the first-ever large-scale Chinese online
game successfully introduced in said area
-- Released Chinese, English, Spanish and French versions of "Raiding
Clans" expansion pack for "Conquer Online"
-- Launched open beta test for "Tian Yuan", which was awarded as "Most
Anticipated Online Game" by QQ.com
-- Launched the first closed beta test for "Dungeon Keeper Online"
-- Licensed the right to develop and operate a new version of "Ultima
Online" in collaboration with Electronic Arts Mythic Entertainment
-- Celebrated the Group's 10th anniversary on September 1 2009
-- Recognized as "National Outstanding Award for Internet Cultural
Enterprise" by Ministry of Culture
-- Recognized as "Most Valuable Enterprise in China's Online Game Industry
in the Past Ten Years" by ChinaJoy Expo
-- Included by Fortune Magazine (Chinese Edition) in its list of "2009
Outstanding Employers -- the Best Companies to Work for in China"
-- Recognized as "Platinum Award Corporate and Employee Contribution
Programme" and "Platinum Award" by Community Chest of Hong Kong
-- At the 2009 Annual Conference of the Chinese e-Game Industry, the Group
was recognized as "Annual Excellent Enterprise of 2009"; Disney Fantasy
Online won "Most Anticipated Online Game of 2009" and Chairman of
NetDragon, Liu Dejian was awarded as the "Annual Outstanding
Entrepreneur of 2009 in China's Game Industry"
-- Launched a series of self-developed mobile phone applications, "Panda
Home" won "Best Home Replacement App" award at the first Android
Network Awards", while "91 Panda Reader" was chosen as one of the Top20
of 5th China Mobile Client Software of 2009
-- Game entertainment portal "91.com" continued to offer Chinese audience
a diverse array of internet products and services
Financial Highlights
(RMB '000) 4Q 2009 3Q 2009 4Q 2008
Revenue 134,190 150,877 136,466
Gross Profit 115,459 127,996 118,167
GPM 86.0% 84.8% 86.6%
Profit for the
period 1,246 18,986 73,192
NPM 0.9% 12.6% 53.6%
Basic EPS
(RMB cents) 0.27 3.67 8.3
(RMB '000) FY 2009 FY 2008 YoY
Revenue 621,836 595,981 4.3%
Gross Profit 537,511 527,964 1.8%
GPM 86.4% 88.6% (2.1%)
Profit for the period 86,624 239,269 (63.8%)
NPM 13.9% 40.1% (26.2%)
Basic EPS (RMB cents) 16.57 44.49 (62.8%)
Metrics
4Q 2009 3Q 2009 2Q 2009 1Q 2009
PCU 492,000 519,000 632,000 695,000
ACU 253,000 273,000 310,000 333,000
4Q 2008 3Q 2008 2Q 2008 1Q 2008
PCU 591,000 544,000 697,000 669,000
ACU 317,000 311,000 355,000 313,000
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 Year Ended 31 December 2009
Unaudited Audited
4Q2009 3Q2009 2009 2008
RMB'000 RMB'000 RMB'000 RMB'000
Revenue 134,190 150,877 621,836 595,981
Cost of revenue (18,731) (22,881) (84,325) (68,017)
Gross profit 115,459 127,996 537,511 527,964
Other income and gains 17,881 28,539 57,807 58,020
Selling and marketing
expenses (37,714) (31,551) (133,460) (103,599)
Administrative
expenses (37,466) (47,085) (163,926) (112,673)
Development costs (58,208) (55,484) (201,461) (89,823)
Other expenses (1,368) (179) (1,959) (19,555)
Net (loss) gain on
derivative financial
instruments -- -- (15,214) 32,231
Net gain (loss) on
financial assets
designated as fair
value through profit
or loss -- -- 18,431 (30,385)
Operating Profit 1,584 22,236 97,729 262,180
Share of losses
of associates -- -- (724) (276)
Profit before taxation 1,584 22,236 97,005 261,904
Taxation (338) (3,250) (10,381) (22,635)
Profit for the year 1,246 18,986 86,624 239,269
Profit for the year
attributable to
-Owners of the Company 1,426 19,290 87,108 239,381
-Minority interests (180) (304) (484) (112)
1,246 18,986 86,624 239,269
RMB cents RMB cents RMB cents RMB cents
Earnings per share
- Basic 0.27 3.67 16.57 44.49
-Diluted 0.27 3.67 16.56 44.49
Condensed Consolidated Statement of Financial Position
As at 31 December 2009
Audited
At 31 December At 31 December
2009 2008
RMB'000 RMB'000
Non-current assets
Property, plant and equipment 109,226 96,160
Prepaid lease payments 41,075 7,224
Deposit paid for acquisition of
property, plant and equipment 8,895 7,357
Intangible assets 12,980 10,754
Interests in associates -- 224
Available-for-sale investments 4,000 4,000
Loan receivables 7,313 6,835
Deferred tax assets 54 54
183,543 132,608
Current assets
Prepaid lease payments 855 138
Loan receivables 893 440
Trade receivables 14,128 9,500
Other receivables, prepayments and
deposits 66,272 72,490
Held for trading investments 377 --
Financial assets designated as fair
value through profit or loss -- 311,806
Derivative financial instruments -- 31,857
Advance to an associate 29,000 --
Tax recoverable 20 108
Bank deposits 551,970 629,454
Bank balances and cash 705,053 332,009
1,368,568 1,387,802
Current liabilities
Trade payables 285 219
Other payables and accruals 67,881 36,620
Deferred income 18,189 16,838
Income tax payable 9,935 12,922
96,290 66,599
Net current assets 1,272,278 1,321,203
1,455,821 1,453,811
Capital and reserves
Share capital 39,264 39,264
Share premium and reserves 1,417,041 1,414,547
Equity attributable to owners of
the Company 1,456,305 1,453,811
Minority interests (484) --
1,455,821 1,453,811
SOURCE NetDragon Websoft Inc.
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