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Ctrip Reports Third Quarter 2010 Financial Results
Nov 02, 2010 (06:11 PM EDT)


SHANGHAI, China, Nov. 2, 2010 /PRNewswire-Asia/ -- Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider for hotel accommodations, airline tickets, packaged tours and corporate travel management in China, today announced its unaudited financial results for the third quarter ended September 30, 2010.

Highlights for the Third Quarter of 2010

  • Net revenues were RMB812 million (US$121 million) for the third quarter of 2010, up 49% year-on-year. In the third quarter, Wing On Travel and ezTravel contributed 11% for the year-on-year growth for net revenues.
  • Gross margin was 78% for the third quarter of 2010, compared to 77% in the same period in 2009.
  • Income from operations was RMB308 million (US$46 million) for the third quarter of 2010, up 55% year-on-year. Excluding share-based compensation charges (non-GAAP), income from operations was RMB368 million (US$55 million), up 63% year-on-year.
  • Operating margin was 38% for the third quarter of 2010, compared to 37% in the same period in 2009. Excluding share-based compensation charges (non-GAAP), operating margin was 45%, compared to 41% in the same period in 2009.
  • Net income attributable to Ctrip's shareholders was RMB320 million (US$48 million) in the third quarter of 2010, up 70% year-on-year. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB380 million (US$57 million), up 77% year-on-year.  
  • Diluted earnings per ADS were RMB2.11 (US$0.31) for the third quarter of 2010. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB2.50 (US$0.37) for the third quarter of 2010.
  • Share-based compensation charges were RMB60 million (US$9 million), accounting for 7% of the net revenues, or RMB0.40 (US$0.06) per ADS for the third quarter of 2010.

"The 2010 Shanghai World EXPO has boosted travel industry in China," said Min Fan, President and Chief Executive Officer of Ctrip. "Ctrip team capitalized this opportunity and delivered solid results in the third quarter of 2010. With the growing travel demand, Ctrip will continuously strengthen our supplier relationships, enhance our customer services, and gain market share through our concerted efforts."

Third Quarter 2010 Financial Results

For the third quarter of 2010, Ctrip reported total revenues of RMB863 million (US$129 million), representing a 48% increase from the same period in 2009 and a 16% increase from the previous quarter.

Hotel reservation revenues amounted to RMB350 million (US$52 million) for the third quarter of 2010, representing a 36% increase year-on-year, primarily driven by an increase of 30% in hotel reservation volume, and an increase of 5% commission per room night year-on-year. Hotel reservation revenues increased 11% quarter-on-quarter, primarily driven by the increase in hotel reservation volume.

Air ticket booking revenues for the third quarter of 2010 were RMB315 million (US$47 million), representing a 36% increase year-on-year, primarily driven by a 30% increase in air ticketing sales volume, and a 4% increase in commission per ticket year-on-year. Air ticket booking revenues increased 3% quarter-on-quarter.

Packaged-tour revenues for the third quarter of 2010 were RMB141 million (US$21 million), representing a 161% increase year-on-year and a 110% increase quarter-on-quarter, due to the increase of leisure travel volume and seasonality. Wing On Travel and ezTravel contributed 108% for the year-on-year growth for packaged-tour revenues.

Corporate travel revenues for the third quarter of 2010 were RMB34 million (US$5 million), representing a 37% increase year-on-year and a 1% increase quarter-on-quarter, primarily driven by the increased corporate travel demand from business activities.

For the third quarter of 2010, net revenues were RMB812 million (US$121 million), representing a 49% increase from the same period in 2009 and a 17% increase from the previous quarter. In the third quarter, Wing On Travel and ezTravel contributed 11% for the year-on-year growth for net revenues.

Gross margin was 78% in the third quarter of 2010, compared to 77% in the same period in 2009, and remained consistent with that in the previous quarter.

Product development expenses for the third quarter of 2010 increased by 53% to RMB123 million (US$18 million) from the same period in 2009 and 13% from the previous quarter, primarily due to an increase in product development personnel and share-based compensation charges. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 13% of the net revenues, decreased from 14% in the same period in 2009 and in the previous quarter.

Sales and marketing expenses for the third quarter of 2010 increased by 33% to RMB125 million (US$19 million) from the same period in 2009, primarily due to the increase in sales and marketing related activities and share-based compensation charges. Sales and marketing expenses for the third quarter of 2010 increased by 17% from the previous quarter, primarily due to the increase in sales and marketing related activities. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 14% of the net revenues, decreasing from 17% in the same period in 2009 and remained consistent with that in the previous quarter.

General and administrative expenses for the third quarter of 2010 increased by 69% to RMB80 million (US$12 million) from the same period in 2009, primarily due to an increase in administrative personnel and share-based compensation charges. General and administrative expenses for the third quarter of 2010 increased by 13% from the previous quarter, primarily due to an increase in administrative personnel. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 5% of the net revenues, decreasing from 6% in the same period in 2009 and remained consistent with that in the previous quarter.

Income from operations for the third quarter of 2010 was RMB308 million (US$46 million), representing an increase of 55% from the same period in 2009 and an increase of 20% from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB368 million (US$55 million), representing an increase of 63% from the same period in 2009 and an increase of 17% from the previous quarter.

Operating margin was 38% in the third quarter of 2010, compared to 37% in the same period in 2009, and in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 45%, compared to 41% in the same period in 2009 and remained consistent with that in the previous quarter.  

The effective tax rate for the third quarter of 2010 was 17%, increased from 13% in the same period of 2009, primarily due to the normalization of the tax rate in the third quarter of 2010. The effective tax rate for the third quarter of 2010 decreased from 19% in the previous quarter, primarily due to the impact of newly acquired entities.

Net income attributable to Ctrip's shareholders for the third quarter of 2010 was RMB320 million (US$48 million), representing a 70% increase from the same period in 2009, and a 36% increase from the previous quarter. Net income for the third quarter of 2010 benefited from higher government subsidies recorded in other income line. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB380 million (US$57 million), representing an increase of 77% from the same period in 2009, and an increase of 30% from the previous quarter.

Diluted earnings per ADS were RMB2.11 (US$0.31) for the third quarter of 2010. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB2.50 (US$0.37) for the third quarter of 2010.

As of September 30, 2010, the balance of cash, restricted cash and short-term investment was RMB3.1 billion (US$463 million).

Business Outlook

For the fourth quarter of 2010, the Company expects to continue the net revenue growth year-on-year at a rate of approximately 30~35%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.

Conference Call

Ctrip's management team will host a conference call at 9:00PM U.S. Eastern Time on November 2, 2010 (or 9:00AM on November 3, 2010 in the Shanghai/HK time zone) following the announcement.

The conference call will be available on Webcast live and replay at: http://ir.ctrip.com. The call will be archived for one month at this website.

The dial-in details for the live conference call: U.S. Toll Free Number +1.888.713.4215, International dial-in number +1.617.213.4867, Passcode 69115178. For pre-registration, please click https://cossprereg.btci.com/prereg/key.process?key=PW8XGDRMU.

A telephone replay of the call will be available after the conclusion of the conference call through November 10, 2010. The dial-in details for the replay: U.S. Toll Free Number +1.888.286.8010, International dial-in number +1.617.801.6888, Passcode 30774034.

Safe Harbor Statement

This announcement contains forward-looking statements. These 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 "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Ctrip's strategic and operational plans, contain forward-looking statements. Ctrip may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, etc., 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 Ctrip'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, the slow-down of economic growth in China and the global economic downturn, general declines or disruptions in the travel industry, volatility in the trading price of Ctrip's ADSs, Ctrip's reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to further increase Ctrip's brand recognition to obtain new business partners and consumers, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in China, Hong Kong, Macau or Taiwan, failure to successfully develop Ctrip's corporate travel business, damage to or failure of Ctrip's infrastructure and technology, loss of services of Ctrip's key executives, inflation in China and in other countries, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Ctrip's affiliated Chinese entities and the contractual arrangements among Ctrip, its affiliated Chinese entities and their shareholders, and other risks outlined in Ctrip's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F and other filings. All information provided in this press release and in the attachments is as of the date of the issuance, and Ctrip does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Ctrip's unaudited consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Ctrip uses non-GAAP financial information related to product development expenses, sales and marketing expenses, general and administrative expenses, income from operations, operating margin, net income, and diluted earnings per ordinary share and per ADS, each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, "Stock Compensation" for 2010 and 2009. Ctrip's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.

Non-GAAP information is not prepared in accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in our business for the foreseeable future.

Reconciliations of Ctrip's non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

About Ctrip.com International, Ltd.

Ctrip.com International, Ltd. is a leading travel service provider of hotel accommodations, airline tickets, packaged tours, and corporate travel management in China. Ctrip aggregates hotel and flight information to enable business and leisure travelers to make informed and cost-effective bookings. Ctrip also books vacation packages and guided tours. In addition, Ctrip corporate travel management services help corporate clients effectively manage their travel requirements. Since its inception in 1999, Ctrip has experienced substantial growth and become one of the best-known travel brands in China.

For further information, please contact:


Investor Relations

Ctrip.com International, Ltd.

Tel:  +86-21-3406-4880 x12258

Email: iremail@ctrip.com



Ctrip.com International, Ltd.

Consolidated Balance Sheet Information




December 31, 2009



September 30, 2010



September 30, 2010



RMB

RMB

USD














(unaudited)



(unaudited)



(unaudited)



ASSETS










Current assets:










Cash


1,434,618,382



1,648,035,779



246,324,756


Restricted cash


113,150,289



189,868,719



28,378,853


Short-term investment


180,183,917



1,261,505,559



188,551,761


Accounts receivable, net


420,579,005



681,675,655



101,887,102


Prepayments and other current assets


134,318,164



367,560,106



54,937,614


Deferred tax assets, current


23,446,059



40,677,684



6,079,917












Total current assets


2,306,295,816



4,189,323,502



626,160,003












Long-term deposits


143,195,191



156,389,645



23,374,882


Land use rights


108,922,018



106,980,858



15,989,965


Property, equipment and software


550,506,595



620,476,327



92,739,904


Investment


658,051,285



1,554,815,956



232,391,593


Goodwill


322,936,838



758,231,441



113,329,563


Intangible assets


66,851,954



293,888,070



43,926,174












Total assets


4,156,759,697



7,680,105,799



1,147,912,084












LIABILITIES










Current liabilities:










Accounts payable


291,045,743



580,225,956



86,723,856


Salary and welfare payable


130,539,660



161,581,733



24,150,920


Taxes payable


142,256,695



146,046,946



21,829,003


Advances from customers


276,792,049



472,594,721



70,636,682


Accrued liability for customer reward program


88,254,996



112,486,338



16,812,845


Other payables and accruals


229,652,319



245,668,088



36,718,944












Total current liabilities


1,158,541,462



1,718,603,782



256,872,250












Deferred tax liabilities, non-current


11,509,937



45,538,026



6,806,371












Total liabilities


1,170,051,399



1,764,141,808



263,678,621












SHAREHOLDERS' EQUITY










Share capital


2,801,334



2,925,256



437,225


Additional paid-in capital


1,219,815,250



3,009,984,068



449,889,256


Statutory reserves


72,489,182



72,489,182



10,834,643


Accumulated other comprehensive (loss) / income


(77,742,443)



291,004,259



43,495,144


Retained Earnings


1,707,684,596



2,453,480,601



366,711,098












Total Ctrip's shareholders' equity


2,925,047,919



5,829,883,366



871,367,366












Noncontrolling interests


61,660,379



86,080,625



12,866,097












Total shareholders' equity


2,986,708,298



5,915,963,991



884,233,463












Total liabilities and shareholders' equity


4,156,759,697



7,680,105,799



1,147,912,084




Ctrip.com International, Ltd.

Consolidated Statement of Operations Information




Quarter Ended



Quarter Ended



Quarter Ended



Quarter Ended



September 30, 2009

June 30, 2010

September 30, 2010

September 30, 2010



RMB

RMB

RMB

USD
















(unaudited)



(unaudited)



(unaudited)



(unaudited)



Revenues:













Hotel reservation


257,895,372



316,150,468



349,655,584



52,261,503


Air-ticketing**


231,993,169



307,233,692



315,236,102



47,116,972


Packaged tour


54,001,698



67,042,613



140,858,679



21,053,535


Corporate travel**


24,776,141



33,659,355



33,938,560



5,072,649


Others


14,733,525



17,559,484



23,035,896



3,443,075















Total revenues


583,399,905



741,645,612



862,724,821



128,947,734















Less: business tax and related surcharges


(37,970,770)



(46,465,222)



(50,520,118)



(7,551,023)















Net revenues


545,429,135



695,180,390



812,204,703



121,396,711















Cost of revenues


(124,352,706)



(151,154,849)



(176,199,743)



(26,335,811)















Gross profit


421,076,429



544,025,541



636,004,960



95,060,900















Operating expenses:













Product development *


(80,758,571)



(109,293,974)



(123,199,772)



(18,414,135)


Sales and marketing *


(93,931,484)



(106,724,067)



(125,160,008)



(18,707,123)


General and administrative *


(47,188,825)



(70,629,317)



(79,623,531)



(11,900,984)















Total operating expenses


(221,878,880)



(286,647,358)



(327,983,311)



(49,022,242)















Income from operations


199,197,549



257,378,183



308,021,649



46,038,658















Interest income


4,340,502



8,954,150



9,767,903



1,459,966


Other income


2,625,101



15,980,806



44,345,553



6,628,137















Income before income tax expense and equity in income


206,163,152



282,313,139



362,135,105



54,126,761















Income tax expense


(26,809,547)



(52,389,816)



(62,186,716)



(9,294,779)


Equity in income of affiliates


11,573,606



7,222,181



23,192,105



3,466,423















Net income


190,927,211



237,145,504



323,140,494



48,298,405















Less: Net (income) / loss attributable to noncontrolling interests


(2,410,490)



(1,934,091)



(3,001,333)



(448,596)















Net income attributable to Ctrip's shareholders


188,516,721



235,211,413



320,139,161



47,849,809















Earnings per ordinary share













- Basic


5.59



6.58



8.94



1.34


- Diluted


5.30



6.20



8.42



1.26















Earnings per ADS













- Basic


1.40



1.64



2.23



0.33


- Diluted


1.32



1.55



2.11



0.31















Weighted average ordinary shares outstanding













- Basic


33,703,516



35,756,826



35,815,709



35,815,709


- Diluted


35,602,373



37,917,285



38,005,087



38,005,087















* Share-based compensation charges included are as follows:













 Product development


7,021,263



14,981,755



16,583,720



2,478,697


 Sales and marketing


3,902,164



8,033,136



8,168,446



1,220,902


 General and administrative


16,043,286



35,211,001



35,491,501



5,304,761














** Certain prior year amounts have been reclassified with no effect on net income or retained earnings to conform to the 2010 financial information presentation. Revenues are presented in accordance with the definitions below:

Air-ticketing revenues primarily include commissions from air ticket booking and related services, including sales of aviation casualty insurance, and revenue generated from air-ticket delivery services.

Corporate travel management revenues primarily include commissions from hotel reservation, air ticket booking and packaged-tour services rendered to corporate clients.



Ctrip.com International, Ltd.

Reconciliation of  GAAP and Non-GAAP Results

(In RMB, except % and per share information)



Quarter Ended September 30, 2010




GAAP  Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue














Product development

(123,199,772)

15%


16,583,720

2%


(106,616,052)

13%



Sales and marketing

(125,160,008)

15%


8,168,446

1%


(116,991,562)

14%



General and administrative

(79,623,531)

10%


35,491,501

4%


(44,132,030)

5%



Total operating expenses

(327,983,311)

40%


60,243,667

7%


(267,739,644)

33%














Income from operations

308,021,649

38%


60,243,667

7%


368,265,316

45%














Net income attributable to Ctrip's shareholders

320,139,161

39%


60,243,667

7%


380,382,828

47%














Diluted earnings per ordinary share (RMB)

8.42



1.59



10.01















Diluted earnings per ADS (RMB)

2.11



0.40



2.50















Diluted earnings per ADS (USD)

0.31



0.06



0.37





























Quarter Ended June 30, 2010




GAAP  Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue














Product development

(109,293,974)

16%


14,981,755

2%


(94,312,219)

14%



Sales and marketing

(106,724,067)

15%


8,033,136

1%


(98,690,931)

14%



General and administrative

(70,629,317)

10%


35,211,001

5%


(35,418,316)

5%



Total operating expenses

(286,647,358)

41%


58,225,892

8%


(228,421,466)

33%














Income from operations

257,378,183

37%


58,225,892

8%


315,604,075

45%














Net income attributable to Ctrip's shareholders

235,211,413

34%


58,225,892

8%


293,437,305

42%














Diluted earnings per ordinary share (RMB)

6.20



1.54



7.74















Diluted earnings per ADS (RMB)

1.55



0.38



1.93















Diluted earnings per ADS (USD)

0.23



0.06



0.29





























Quarter Ended September 30, 2009




GAAP  Result

% of Net Revenue


Share-based Compensation

% of Net Revenue


Non-GAAP Result

% of Net Revenue














Product development

(80,758,571)

15%


7,021,263

1%


(73,737,308)

14%



Sales and marketing

(93,931,484)

17%


3,902,164

1%


(90,029,320)

17%



General and administrative

(47,188,825)

9%


16,043,286

3%


(31,145,539)

6%



Total operating expenses

(221,878,880)

41%


26,966,713

5%


(194,912,167)

36%














Income from operations

199,197,549

37%


26,966,713

5%


226,164,262

41%














Net income attributable to Ctrip's shareholders

188,516,721

35%


26,966,713

5%


215,483,434

40%














Diluted earnings per ordinary share (RMB)

5.30



0.76



6.05















Diluted earnings per ADS (RMB)

1.32



0.19



1.51















Diluted earnings per ADS (USD)

0.19



0.03



0.22








































Notes for all the financial schedules presented:

Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.6905 on September 30, 2010 published by the Federal Reserve Board.

Note 2: Effective on January 21, 2010, Company changed ratio of the American Depositary Shares ("ADSs") to ordinary shares from two (2) ADSs representing one (1) ordinary shares to four (4) ADSs representing one (1) ordinary share.  The change is reflected retroactively in the numbers for all the periods presented above.



SOURCE Ctrip.com International, Ltd.