News Releases

Ctrip Reports Unaudited Second Quarter of 2016 Financial Results

SHANGHAI, Aug 31, 2016 /PRNewswire/ -- Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China ("Ctrip" or the "Company"), today announced its unaudited financial results for the second quarter ended June 30, 2016.

Highlights for the Second Quarter of 2016

  • Net revenues for the second quarter of 2016 were RMB4.4 billion (US$664 million), up 75% year-on-year.
    • Despite a tough comparable base in the second quarter of 2015, the accommodation reservation business experienced healthy growth this quarter, driven by strong increases in both volume and revenue per room night. 
    • The transportation ticketing business continued to see strong volume growth, benefiting from the strong execution, increasing contribution of new business units, and recent investments. 
  • Operating margin for the second quarter of 2016 was -9%, increasing meaningfully from -44% in the previous quarter. Excluding share-based compensation charges, Non-GAAP operating margin for the second quarter of 2016 was 4%, increasing meaningfully from 0% in the previous quarter, as a result of a material improvement in operating efficiency across all expense lines.

"Ctrip continued to execute strongly in the second quarter of 2016, delivering solid top line growth and healthy margin expansion," said James Liang, Chairman of the Board and Chief Executive Officer of Ctrip. "We will continue to strengthen our industry leadership by focusing on our one-stop online travel platform, expanding international travel inventory coverage, and improving operating efficiency."

Second Quarter of 2016 Financial Results and Business Updates

For the second quarter of 2016, Ctrip reported net revenues of RMB4.4 billion (US$664 million), representing an 75% increase from the same period in 2015, primarily due to the consolidation of the financial results of Qunar Cayman Islands Limited ("Qunar") starting from December 31, 2015. Net revenues for the second quarter of 2016 increased 6% from the previous quarter.

Accommodation reservation revenues for the second quarter of 2016 were RMB1.8 billion (US$267 million), representing a 61% increase from the same period in 2015 and a 10% increase from the previous quarter, primarily driven by an increase in accommodation reservation volume and the consolidation of Qunar's financial results since December 31, 2015.

Transportation ticketing revenues for the second quarter of 2016 were RMB2.0 billion (US$301 million), representing a 90% increase from the same period in 2015 and a 3% increase from the previous quarter, primarily driven by an increase in ticketing volume and the consolidation of Qunar's financial results since December 31, 2015.

Packaged-tour revenues for the second quarter of 2016 were RMB474 million (US$71 million), representing a 44% increase from the same period in 2015, primarily driven by an increase in volume growth of organized tours and self-guided tours. Packaged-tour revenues for the second quarter of 2016 decreased 15% from the previous quarter, primarily due to seasonality.

Corporate travel revenues for the second quarter of 2016 were RMB147 million (US$22 million), representing a 22% increase from the same period in 2015 and a 27% increase from the previous quarter, primarily driven by increased corporate travel demand from business activities.

Gross margin was 72% for the second quarter of 2016, compared to 71% in the same period in 2015 and 73% in the previous quarter.

Product development expenses for the second quarter of 2016 increased by 116% to RMB1.7 billion (US$259 million) from the same period in 2015, primarily due to the consolidation of Qunar's financial results since December 31, 2015. Product development expenses for the second quarter of 2016 decreased by 28% from the previous quarter, primarily due to the decrease in share-based compensation charges. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 31% of the net revenues, which increased from 29% in the same period in 2015, primarily due to the consolidation of Qunar's financial results since December 31, 2015. Excluding share-based compensation charges (non-GAAP), product development expenses for the second quarter of 2016 decreased from 32% in the previous quarter.

Sales and marketing expenses for the second quarter of 2016 increased by 97% to RMB1.3 billion (US$202 million) from the same period in 2015, primarily due to the consolidation of Qunar's financial results since December 31, 2015. Sales and marketing expenses for the second quarter of 2016 decreased by 13% from the previous quarter, primarily due to the decrease in share-based compensation charges. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 29% of the net revenues, which increased from 26% in the same period in 2015, primarily due to the consolidation of Qunar's financial results since December 31, 2015. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses for the second quarter of 2016 decreased from 33% in the previous quarter, primarily due to a meaningful improvement in operating efficiency in sales and marketing related activities.

General and administrative expenses for the second quarter of 2016 increased by 95% to RMB510 million (US$77 million) from the same period in 2015, primarily due to the consolidation of Qunar's financial results since December 31, 2015. General and administrative expenses for the second quarter of 2016 decreased by 45% from the previous quarter, primarily due to the decrease in share-based compensation charges. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 8% of the net revenues, which remained consistent with the same period in 2015 and the previous quarter.

Loss from operations for the second quarter of 2016 was RMB396 million (US$60 million), compared to income from operations of RMB61 million (US$10 million) in the same period in 2015 and loss from operations of RMB1.8 billion (US$283 million) in the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB182 million (US$27 million), compared to RMB214 million (US$35 million) in the same period in 2015 and RMB8 million (US$1 million) in the previous quarter.

Operating margin was -9% for the second quarter of 2016, compared to 2% in the same period in 2015, and -44% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 4%, compared to 8% in the same period in 2015 and 0% in the previous quarter. 

Income tax expense for the second quarter of 2016 was RMB53 million (US$8 million), compared to RMB31 million (US$5 million) in the same period of 2015 and RMB94 million (US$15 million) in the previous quarter.

Net loss attributable to Ctrip's shareholders for the second quarter of 2016 was RMB521 million (US$78 million), compared to net income of RMB143 million (US$23 million) in the same period in 2015 and net loss of RMB1.6 billion (US$245 million) in the previous quarter. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB57 million (US$9 million), compared to RMB296 million (US$48 million) in the same period in 2015 and RMB257 million (US$40 million) in the previous quarter.

Diluted earnings per ADS were RMB-1.13(US$-0.17) for the second quarter of 2016. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB0.12(US$0.02) for the second quarter of 2015.

As of June 30, 2016, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB18 billion (US$2.7 billion).

Business Outlook

For the third quarter of 2016, the Company expects the net revenue growth to continue at a year-on-year rate of approximately 70-75%. 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 8:00PM U.S. Eastern Time on August 31, 2016 (or 8:00AM on September 1, 2016 in the Shanghai/Hong Kong Time) 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 +1.800.230.3019, International dial-in number +1.617.597.5413, Passcode 74821671#. For pre-registration, please click https://www.theconferencingservice.com/prereg/key.process?key=PWQDCQ7NK.

A telephone replay of the call will be available after the conclusion of the conference call until September 7, 2016.  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 41914654.

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, 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. 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, severe or prolonged downturn in the global or Chinese economy, 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 mainland 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, adverse changes in economic and political policies of the PRC government, inflation in China, 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 condensed 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 (except for net commission earned) is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, "Compensation-Stock Compensation" for 2016 and 2015. Net commission earned is calculated by deducting from the revenues the cost of transactions in which the Company undertakes majority of the business risks. 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 Ctrip's 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 accommodation reservation, transportation ticketing, packaged tours, and corporate travel management in China. It is the largest online consolidator of accommodations and transportation tickets in China in terms of transaction volume. Ctrip enables business and leisure travelers to make informed and cost-effective bookings by aggregating comprehensive travel related information and offering its services through an advanced transaction and service platform consisting of its mobile apps, Internet websites and centralized, toll-free, 24-hour customer service center. Ctrip also helps customers book vacation packages and guided tours. In addition, through its corporate travel management services, Ctrip helps 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 X 12300
Email: iremail@ctrip.com

 

Ctrip.com International, Ltd. 

Unaudited Condensed Consolidated Balance Sheets



December 31, 2015


June 30, 2016


June 30, 2016



RMB


RMB


USD

















(unaudited)


(unaudited)


(unaudited)








ASSETS







Current assets:







Cash and cash equivalents


19,215,674,674


10,116,920,988


1,522,280,051

Restricted cash


2,286,882,592


2,417,447,550


363,750,214

Short-term investment 


8,235,785,516


5,443,944,270


819,143,272

Accounts receivable, net


3,150,768,364


3,658,078,229


550,426,312

Prepayments and other current assets


7,711,757,285


7,509,378,779


1,129,926,538








Total current assets


40,600,868,431


29,145,769,816


4,385,526,387








Long-term deposits and prepayments     


486,785,968


691,940,799


104,115,439

Land use rights


102,328,181


100,936,477


15,187,781

Property, equipment and software


5,555,959,499


5,568,738,586


837,920,912

Investment


13,870,523,498


17,977,129,465


2,704,995,481

Goodwill


45,690,440,903


46,392,118,214


6,980,562,183

Intangible assets


11,007,915,171


10,919,161,286


1,642,992,113

Other long-term receviables


1,122,435,740


933,217,094


140,419,972

Deferred tax assets, non-current


405,334,569


483,788,972


72,795,103








Total assets


118,842,591,960


112,212,800,709


16,884,515,371








LIABILITIES







Current liabilities:







Short-term Debt 


12,710,213,398


11,329,152,241


1,704,682,923

Accounts payable


5,944,501,681


7,654,067,391


1,151,697,647

Salary and welfare payable


1,196,691,839


1,115,581,323


167,860,083

Taxes payable


1,641,379,425


934,733,132


140,648,089

Advances from customers


5,955,827,306


5,468,053,610


822,770,973

Accrued liability for customer reward program


593,346,816


633,476,833


95,318,442

Other payables and accruals


5,624,133,603


2,516,459,403


378,648,398








Total current liabilities


33,666,094,068


29,651,523,933


4,461,626,555








Deferred tax liabilities, non-current


3,045,259,390


3,040,657,474


457,523,808

Long-term Debt


18,354,608,260


19,737,568,172


2,969,886,422

Other long-term Liabilities


91,702,261


97,786,088


14,713,747








Total liabilities


55,157,663,979


52,527,535,667


7,903,750,532








SHAREHOLDERS' EQUITY







Share capital


4,121,245


4,608,787


693,478

Additional paid-in capital


37,991,678,952


51,920,013,979


7,812,337,528

Statutory reserves


168,940,969


168,940,969


25,420,330

Accumulated other comprehensive income


560,077,281


173,177,462


26,057,789

Retained Earnings


8,198,838,659


6,098,902,034


917,693,922

Treasury stock 


(2,372,927,372)


(2,287,415,685)


(344,184,487)








Total Ctrip's shareholders' equity


44,550,729,734


56,078,227,546


8,438,018,560








Noncontrolling interests


19,134,198,247


3,607,037,496


542,746,279








Total shareholders' equity


63,684,927,981


59,685,265,042


8,980,764,839








Total liabilities and shareholders' equity


118,842,591,960


112,212,800,709


16,884,515,371

 

 

Ctrip.com International, Ltd. 

Unaudited Condensed Consolidated Statements of Comprehensive Income



Quarter Ended


Quarter Ended


Quarter Ended


Quarter Ended



June 30, 2015


March 31, 2016


June 30, 2016


June 30, 2016



RMB


RMB


RMB


USD





















(unaudited)


(unaudited)


(unaudited)


(unaudited)










Revenues:









Accommodation reservation 


1,104,440,783


1,614,031,154


1,775,818,174


267,205,070

Transportation ticketing 


1,052,550,664


1,949,003,126


2,003,426,795


301,453,045

Packaged tour


329,373,989


556,495,540


473,931,453


71,311,854

Corporate travel


120,746,346


115,632,061


147,096,362


22,133,400

Others


58,377,132


163,979,409


142,119,432


21,384,528










Total revenues


2,665,488,914


4,399,141,290


4,542,392,216


683,487,897










Less: business tax and related surcharges


(138,352,668)


(221,134,734)


(131,107,435)


(19,727,567)










Net revenues


2,527,136,246


4,178,006,556


4,411,284,781


663,760,330










Cost of revenues


(730,019,031)


(1,135,944,483)


(1,233,148,536)


(185,550,269)










Gross profit


1,797,117,215


3,042,062,073


3,178,136,245


478,210,061










Operating expenses:









Product development *


(796,503,880)


(2,396,921,596)


(1,723,757,548)


(259,371,575)

Sales and marketing *


(678,719,875)


(1,543,324,251)


(1,340,183,930)


(201,655,747)

General and administrative *


(261,010,168)


(929,191,857)


(510,107,769)


(76,755,258)










Total operating expenses


(1,736,233,923)


(4,869,437,704)


(3,574,049,247)


(537,782,580)










Income/ (loss)  from operations


60,883,292


(1,827,375,631)


(395,913,002)


(59,572,519)










Interest income 


136,364,251


190,697,649


150,858,298


22,699,453

Interest expense


(58,841,079)


(158,107,727)


(162,964,862)


(24,521,113)

Other income/ (expense)


11,924,843


318,195,868


(30,423,035)


(4,577,715)










Income/ (loss) before income tax expense and equity in income


150,331,307


(1,476,589,841)


(438,442,601)


(65,971,894)










Income tax expense


(31,322,795)


(93,531,478)


(52,984,311)


(7,972,481)

Equity in loss of affiliates


(20,479,317)


(107,909,642)


(99,658,215)


(14,995,443)










Net income/ (loss)


98,529,195


(1,678,030,961)


(591,085,127)


(88,939,818)










Less: Net loss attributable to noncontrolling interests


44,249,227


99,346,870


69,832,593


10,507,620










Net income/ (loss) attributable to Ctrip's shareholders


142,778,422


(1,578,684,091)


(521,252,534)


(78,432,198)










Comprehensive income/ (loss) attributable to Ctrip's
shareholders


708,839,025


(1,489,894,815)


(856,289,870)


(128,844,832)










Earnings per ordinary share









- Basic


4.01


(27.90)


(9.03)


(1.36)

- Diluted


3.61


(27.90)


(9.03)


(1.36)










Earnings per ADS **









- Basic


0.50


(3.49)


(1.13)


(0.17)

- Diluted


0.45


(3.49)


(1.13)


(0.17)










Weighted average ordinary shares outstanding









- Basic


35,646,304


56,591,142


57,716,573


57,716,573

- Diluted


39,940,625


56,591,142


57,716,573


57,716,573










* Share-based compensation charges included are as follows:









  Product development 


71,542,652


1,071,652,534


345,176,289


51,938,231

  Sales and marketing 


16,189,635


184,425,162


69,056,692


10,390,871

  General and administrative 


65,361,658


579,558,336


163,806,574


24,647,764










**On November 18, 2015, the Company announced that it would change the ratio of its American depositary shares ("ADSs") to ordinary shares from four (4) ADSs representing
one (1) ordinary share to eight (8) ADSs representing one (1) ordinary share, effective December 1, 2015. The historical and present earnings/ (loss) per share for the periods
presented herein has been retrospectively adjusted to reflect such effect.

 

 

Ctrip.com International, Ltd. 

Reconciliation of  GAAP and Non-GAAP Results

(In RMB, except % and per share information)


Quarter Ended June 30, 2016


GAAP  Result

% of Net
Revenues


Share-based
Compensation

% of Net
Revenues


Non-GAAP Result

% of Net
Revenues










Product development 

(1,723,757,548)

39%


345,176,289

8%


(1,378,581,259)

31%

Sales and marketing 

(1,340,183,930)

30%


69,056,692

1%


(1,271,127,238)

29%

General and administrative 

(510,107,769)

12%


163,806,574

4%


(346,301,195)

8%

Total operating expenses

(3,574,049,247)

81%


578,039,555

13%


(2,996,009,692)

68%










(Loss)/ income from operations

(395,913,002)

-9%


578,039,555

13%


182,126,553

4%










Net (loss)/ income attributable to Ctrip's shareholders

(521,252,534)

-12%


578,039,555

13%


56,787,021

1%










Diluted earnings per ordinary share (RMB)

(9.03)



10.01



0.98











Diluted earnings per ADS (RMB)

(1.13)



1.25



0.12











Diluted earnings per ADS (USD)

(0.17)



0.19



0.02





















Quarter Ended  March 31, 2016


GAAP  Result

% of Net
Revenues


Share-based
Compensation

% of Net
Revenues


Non-GAAP Result

% of Net
Revenues










Product development 

(2,396,921,596)

57%


1,071,652,534

26%


(1,325,269,062)

32%

Sales and marketing 

(1,543,324,251)

37%


184,425,162

4%


(1,358,899,089)

33%

General and administrative 

(929,191,857)

22%


579,558,336

14%


(349,633,521)

8%

Total operating expenses

(4,869,437,704)

117%


1,835,636,032

44%


(3,033,801,672)

73%










(Loss)/ income from operations

(1,827,375,631)

-44%


1,835,636,032

44%


8,260,401

0%










Net (loss)/ income attributable to Ctrip's shareholders

(1,578,684,091)

-38%


1,835,636,032

44%


256,951,941

6%










Diluted earnings per ordinary share (RMB)

(27.90)



32.44



4.54











Diluted earnings per ADS (RMB)

(3.49)



4.06



0.57











Diluted earnings per ADS (USD)

(0.54)



0.63



0.09





















Quarter Ended June 30, 2015


GAAP  Result

% of Net
Revenues


Share-based
Compensation

% of Net
Revenues


Non-GAAP Result

% of Net
Revenues










Product development 

(796,503,880)

32%


71,542,652

3%


(724,961,228)

29%

Sales and marketing 

(678,719,875)

27%


16,189,635

1%


(662,530,240)

26%

General and administrative 

(261,010,168)

10%


65,361,658

3%


(195,648,510)

8%

Total operating expenses

(1,736,233,923)

69%


153,093,945

6%


(1,583,139,978)

63%










Income from operations

60,883,292

2%


153,093,945

6%


213,977,237

8%










Net income attributable to Ctrip's shareholders

142,778,422

6%


153,093,945

6%


295,872,367

13%










Diluted earnings per ordinary share (RMB)

3.61



3.80



7.41











Diluted earnings per ADS (RMB)

0.45



0.48



0.93











Diluted earnings per ADS (USD)

0.07



0.08



0.15




















Notes for all the condensed consolidated 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=RMB6.6459 on June 30, 2016 published
by the Federal Reserve Board.


Notes 2: On November 18, 2015, the Company announced that it would change the ratio of its American depositary shares ("ADSs") to ordinary shares
from four (4) ADSs representing one (1) ordinary share to eight (8) ADSs representing one (1) ordinary share, effective December 1, 2015. The historical
and present earnings/ (loss) per share for the periods presented herein has been retrospectively adjusted to reflect such effect.

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SOURCE Ctrip.com International, Ltd.