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Ctrip Reports Third Quarter 2009 Financial Results

SHANGHAI, Nov. 11 /PRNewswire-Asia/ -- Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider for hotel accommodations, airline tickets and packaged tours in China, today announced its unaudited financial results for the quarter ended September 30, 2009.

   Highlights for the Third Quarter of 2009
    -- Net revenues were RMB545 million (US$80 million) for the third quarter
       of 2009, up 47% year-on-year. Excluding net revenues attributable to
       ezTravel, Ctrip's net revenues were RMB518 million (US$76 million) for
       the third quarter of 2009, up 40% year-on-year.
    -- Gross margin was 77% for the third quarter of 2009, remaining
       consistent with that in the same period in 2008.
    -- Income from operations was RMB199 million (US$29 million) for the third
       quarter of 2009, up 87% year-on-year. Excluding share-based
       compensation charges (non-GAAP), income from operations was RMB226
       million (US$33 million), up 64% year-on-year.
    -- Operating margin was 37% in the third quarter of 2009, compared to 29%
       in the third quarter of 2008. Excluding share-based compensation
       charges (non-GAAP), operating margin was 41%, compared to 37% with the
       same period in 2008.
    -- Net income attributable to Ctrip's shareholders was RMB189 million
       (US$28 million) in the third quarter of 2009, up 80% year-on-year.
       Excluding share-based compensation charges (non-GAAP), net income
       attributable to Ctrip's shareholders was RMB215 million (US$32 million),
       up 59% year-on-year.
    -- Diluted earnings per ADS were RMB2.65 (US$0.39). Excluding share-based
       compensation charges (non-GAAP), diluted earnings per ADS were RMB3.03
       (US$0.44).
    -- Share-based compensation charges were RMB27 million (US$4 million),
       accounting for 5% of the net revenues, or RMB0.38 (US$0.06) per ADS,
       for the third quarter of 2009.

"We are pleased that our team delivered solid results in the third quarter of 2009," said Min Fan, Chief Executive Officer of Ctrip, "As we celebrate Ctrip's 10th anniversary of establishment, we want to take this opportunity to thank our customers, our partners and our employees for their supports through the years. In order to extend our leadership in the future, we will continuously focus on strengthening our core competitiveness in customer service, technology innovation, and sales and marketing. We believe we are well prepared for the new era to come."

Third Quarter 2009 Financial Results

For the third quarter of 2009, Ctrip reported total revenues of RMB583 million (US$85 million), representing a 47% increase from the same period in 2008 and a 15% increase from the previous quarter.

Hotel reservation revenues amounted to RMB262 million (US$38 million) for the third quarter of 2009, representing a 41% increase year-on-year, and a 16% increase quarter-on-quarter. Excluding revenues attributable to ezTravel, Ctrip's hotel reservation revenues were RMB257 million (US$38 million), representing a 38% increase year-on-year, primarily driven by a 47% increase in hotel reservation volume, which was partially offset by a decrease in commission per room. Excluding revenues attributable to ezTravel, Ctrip's hotel reservation revenues increased by 15% quarter-on-quarter, primarily driven by an increase in hotel room reservation volume.

Air-ticketing revenues for the third quarter of 2009 were RMB241 million (US$35 million), representing a 45% increase year-on-year, and an 8% increase quarter-on-quarter. Excluding revenues attributable to ezTravel, Ctrip's air-ticketing revenues were RMB234 million (US$34 million) for the third quarter of 2009, representing a 40% increase year-on-year, and 9% quarter-on-quarter, primarily driven by an increase in air-ticketing sales volume.

Packaged-tour revenues for the third quarter of 2009 were RMB55 million (US$8 million), representing a 93% increase year-on-year, and a 53% increase quarter-on-quarter. Excluding revenues attributable to ezTravel, Ctrip's packaged-tour revenues for the third quarter of 2009 increased by 53% year-on-year, and 61% quarter-on-quarter, due to the increase in the leisure travel volume.

For the third quarter of 2009, net revenues were RMB545 million (US$80 million), a 47% increase from the same period in 2008 and a 15% increase from the previous quarter. Excluding net revenues attributable to ezTravel, net revenues were RMB518 million (US$76 million), a 40% increase from the same period in 2008 and a 14% increase from the previous quarter.

Gross margin was 77% in the third quarter of 2009, remaining consistent with that in the same period in 2008 and in the previous quarter.

Product development expenses for the third quarter of 2009 increased by 32% to RMB81 million (US$12 million) from the same period in 2008, and by 6% from the previous quarter, primarily due to the increase in the number of product development personnel. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 14% of the net revenues, remaining consistent with that in the same period of last year and in the previous quarter.

Sales and marketing expenses for the third quarter of 2009 increased by 32% to RMB94 million (US$14 million) from the same period in 2008 and by 13% from the previous quarter primarily due to the increase in sales and marketing activities and the number of personnel. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 17% of the net revenues, compared to 18% in the same period last year and remained consistent with that in the previous quarter.

General and administrative expenses for the third quarter of 2009 increased by 5% to RMB47 million (US$7 million) from the same period in 2008 and 4% from the previous quarter primarily due to the increase in the number of personnel. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 6% of the net revenues, compared to 7% in the same period last year and remained consistent with that in the previous quarter.

Income from operations for the third quarter of 2009 was RMB199 million (US$29 million), representing an 87% increase from the same period in 2008 and a 22% increase from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB226 million (US$33 million), representing a 64% increase from the third quarter in 2008 and a 19% increase from the previous quarter.

Operating margin was 37% in the third quarter of 2009, compared to 29% in the third quarter of 2008 and 34% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 41% in the third quarter of 2009, compared to 37% in the third quarter of 2008, and 40% in the previous quarter.

Net income attributable to Ctrip's shareholders for the third quarter of 2009 was RMB189 million (US$28 million), representing an 80% increase from the same period in 2008, and a 19% increase from the previous quarter. Net income attributable to Ctrip's shareholders for the current quarter includes equity income of RMB12 million (US$2 million) from our investment in Home Inns. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB215 million (US$32 million), representing a 59% increase from the same period in 2008, and a 16% increase from the previous quarter.

The effective tax rate for the third quarter of 2009 decreased to 13% from the same period of 2008 and the previous quarter primarily due to the preferential tax treatment to certain of Ctrip's PRC subsidiaries.

Diluted earnings per ADS were RMB2.65 (US$0.39) for the third quarter of 2009. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB3.03 (US$0.44).

As of September 30, 2009, the balance of cash and short-term investment was RMB1.4 billion (US$207 million).

Business Outlook

For the fourth quarter of 2009, Ctrip expects a year-on-year net revenue growth rate of approximately 25-30%. 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 US Eastern Time on November 11, 2009 (or 9:00AM on November 12, 2009 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 +1.888.679.8034, International dial-in number +1.617.213.4847, Passcode 99296235. For pre-registration, please click https://www.theconferencingservice.com/prereg/key.process?key=PNYGYFRGX .

A telephone replay of the call will be available after the conclusion of the conference call through November 19, 2009. 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 41222577.

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 "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," and "confident" and 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, a reoccurrence of slow-down of economic growth in China and the worldwide recession, declines or disruptions in the travel industry, volatility in the trading price of Ctrip's ADSs, Ctrip's reliance on the relationships 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, damage to or failure of Ctrip's infrastructure and technology, loss of services of Ctrip's key executives, risks associated with any strategic investments or acquisitions, risks related to health epidemics, such as outbreaks of H1N1 flu (swine flu), SARs or avian flu, that may materially disrupt the travel industry, risks and uncertainties associated with PRC laws and regulations governing internet content providers and affecting Ctrip's business in China, Ctrip's failure to prevent others from using its intellectual property, Ctrip's failure to successfully manage current growth and potential future growth, 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 November 11, 2009, 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 the 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 Statement of Financial Accounting Standard 123R, "Share-Based Payment" for 2009 and 2008. Ctrip's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provides the management better capability to plan and forecast future periods.

The 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 the GAAP results. A limitation of using these non-GAAP financial measures is that these 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 and packaged-tours in China. Ctrip aggregates information on hotels and flights and enables customers to make informed and cost-effective hotel and flight bookings. Ctrip targets primarily business and leisure travelers in China. 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:

     Lin Zhang
     Ctrip.com International, Ltd.
     Tel:   +86-21-3406-4880 x12920
     Email: z_lin@ctrip.com

     June Zhu
     Ctrip.com International, Ltd.
     Tel:   +86-21-3406-4880 x12258
     Email: jun_zhu@ctrip.com



                           Ctrip.com International, Ltd.
                      Consolidated Balance Sheet Information

                                      December       September     September
                                      31, 2008       30, 2009      30, 2009
                                         RMB            RMB           USD
                                     (unaudited)    (unaudited)   (unaudited)
      ASSETS
      Current assets:
      Cash                          1,069,827,364  1,191,983,450  174,618,888
      Restricted cash                   6,600,000     51,638,252    7,564,714
      Short-term investment           176,585,908    167,123,775   24,482,695
      Accounts receivable, net        274,302,454    419,659,326   61,477,737
      Prepayments and other current
       assets                          95,150,506    169,721,056   24,863,182
      Deferred tax assets               8,840,772     12,313,554    1,803,867

      Total current assets          1,631,307,004  2,012,439,413  294,811,083

      Long-term deposits              145,500,002    142,600,299   20,890,143
      Land use rights                 111,510,231    109,569,071   16,051,254
      Property, equipment and
       software                       346,117,083    473,135,623   69,311,714
      Investment                      237,943,497    643,505,531   94,269,950
      Goodwill                         63,689,736    322,936,838   47,308,435
      Other long-term assets           24,498,763     68,481,339   10,032,132

      Total assets                  2,560,566,316  3,772,668,114  552,674,711

      LIABILITIES
      Current liabilities:
      Accounts payable                138,657,593    198,784,840   29,120,864
      Salary and welfare payable       65,590,151    115,923,855   16,982,194
      Taxes payable                    54,745,686     86,672,317   12,697,008
      Advances from customers         187,576,416    261,977,257   38,378,198
      Accrued liability for
       customer reward program         58,046,062     81,804,478   11,983,897
      Deferred tax liabilities                 --     17,299,500    2,534,280
      Other payables and accruals     121,421,617    188,353,794   27,592,774

      Total current liabilities       626,037,525    950,816,041  139,289,215

      Other long-term payables            812,500             --           --

      Total liabilities               626,850,025    950,816,041  139,289,215

      SHAREHOLDERS' EQUITY
      Share capital                     2,761,259      2,791,606      408,955
      Additional paid-in capital      967,687,772  1,140,878,292  167,132,268
      Statutory reserves               75,948,298     60,579,898    8,874,615
      Accumulated other
       comprehensive loss            (175,929,389)   (77,755,001) (11,390,671)
      Retained Earnings             1,060,620,258  1,529,388,067  224,046,771

      Total Ctrip's shareholders'
       equity                       1,931,088,198  2,655,882,862  389,071,938

      Noncontrolling interests *        2,628,093    165,969,211   24,313,558

      Total shareholders' equity    1,933,716,291  2,821,852,073  413,385,496

      Total liabilities and
       shareholders' equity         2,560,566,316  3,772,668,114  552,674,711


      * It reflects implementation of SFAS No.160, "Noncontrolling Interests
        in Consolidated Financial Statements-an amendment of ARB No.51."



                         Ctrip.com International, Ltd.
              Consolidated Statement of Operations Information

                       Quarter Ended Quarter Ended Quarter Ended Quarter Ended
                       September 30,   June 30,    September 30, September 30,
                            2008          2009         2009          2009
                             RMB           RMB          RMB           USD
                         (unaudited)   (unaudited)   (unaudited)   (unaudited)

      Revenues:
      Hotel reservation  186,005,621   226,835,080   262,280,259   38,422,586
      Air-ticketing      166,420,800   222,283,380   241,144,278   35,326,284
      Packaged tour       28,371,045    35,874,457    54,733,097    8,018,092
      Others              16,248,986    22,665,693    25,242,271    3,697,851

      Total revenues     397,046,452   507,658,610   583,399,905   85,464,813

      Less: business
       tax and related
       surcharges        (26,909,297)  (31,371,685)  (37,970,770)  (5,562,505)

      Net revenues       370,137,155   476,286,925   545,429,135   79,902,308

      Cost of revenues   (86,404,046) (108,061,461) (124,352,706) (18,216,974)

      Gross profit       283,733,109   368,225,464   421,076,429   61,685,334

      Operating expenses:
      Product
       development *     (61,254,023)  (76,285,782)  (80,758,571) (11,830,678)
      Sales and
       marketing *       (71,028,049)  (82,817,192)  (93,931,484) (13,760,435)
      General and
       administrative *  (44,819,506)  (45,444,456)  (47,188,825)  (6,912,898)

      Total operating
       expenses         (177,101,578) (204,547,430) (221,878,880) (32,504,011)

      Income from
       operations        106,631,531   163,678,034   199,197,549   29,181,323

      Interest income      8,012,955     5,000,977     4,340,502      635,859
      Other income        11,442,154    18,276,381     2,625,101      384,563

      Income before
       income tax
       expense and
       equity income     126,086,640   186,955,392   206,163,152   30,201,745

      Income tax
       expense           (21,604,489)  (33,393,036)  (26,809,547)  (3,927,448)
      Equity income in
       affiliates                 --     6,581,137    11,573,606    1,695,468

      Net income         104,482,151   160,143,493   190,927,211   27,969,765

      Less: Net income
       attributable to
       noncontrolling
       interests**            13,291    (1,284,685)   (2,410,490)    (353,123)

      Net income
       attributable to
       Ctrip's
       shareholders      104,495,442   158,858,808   188,516,721   27,616,642

      Earnings per
       ordinary share
      - Basic                   3.13          4.73          5.59         0.82
      - Diluted                 3.03          4.54          5.30         0.78

      Earnings per ADS
      - Basic                   1.56          2.37          2.80         0.41
      - Diluted                 1.52          2.27          2.65         0.39

      Weighted average
       ordinary shares
       outstanding
      - Basic             33,400,258    33,574,513    33,703,516   33,703,516
      - Diluted           34,447,448    34,973,103    35,602,373   35,602,373


      * Share-based
        compensation
        charges included
        are as follows:
        Product
         development       8,131,437     7,279,340     7,021,263    1,028,576
        Sales and
         marketing         4,496,630     4,040,372     3,902,164      571,645
        General and
         administrative   18,657,104    15,661,986    16,043,286    2,350,251


      ** It reflects implementation of SFAS No.160, "Noncontrolling Interests
         in Consolidated Financial Statements-an amendment of ARB No.51."



                          Ctrip.com International, Ltd.
                  Reconciliation of GAAP and Non-GAAP Results
                 (In RMB, except % and per share information)

                                Quarter Ended September 30, 2009
                     GAAP Result  % of  Share-based  % of   Non-GAAP    % of
                                   Net  Compensation  Net     Result     Net
                                 Revenue            Revenue            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)              2.65               0.38               3.03

    Diluted
     earnings per
     ADS (USD)              0.39               0.06               0.44


                                  Quarter Ended June 30, 2009
                     GAAP Result  % of  Share-based  % of   Non-GAAP    % of
                                   Net  Compensation  Net     Result     Net
                                 Revenue            Revenue            Revenue

    Product
     development     (76,285,782)   16%   7,279,340    2%  (69,006,442)   14%
    Sales and
     marketing       (82,817,192)   17%   4,040,372    1%  (78,776,820)   17%
    General and
     administrative  (45,444,456)   10%  15,661,986    3%  (29,782,470)    6%
    Total
     operating
     expenses       (204,547,430)   43%  26,981,698    6% (177,565,732)   37%

    Income from
     operations      163,678,034    34%  26,981,698    6%  190,659,732    40%

    Net income
     attributable
     to Ctrip's
     shareholders    158,858,808    33%  26,981,698    6%  185,840,506    39%

    Diluted
     earnings per
     ordinary
     share (RMB)            4.54               0.77               5.31

    Diluted
     earnings per
     ADS (RMB)              2.27               0.39               2.66

    Diluted
     earnings per
     ADS (USD)              0.33               0.06               0.39


                                Quarter Ended September 30, 2008
                     GAAP Result  % of  Share-based  % of   Non-GAAP    % of
                                   Net  Compensation  Net     Result     Net
                                 Revenue            Revenue            Revenue

    Product
     development     (61,254,023)  17%    8,131,437    2%  (53,122,586)   14%
    Sales and
     marketing       (71,028,049)  19%    4,496,630    1%  (66,531,419)   18%
    General and
     administrative  (44,819,506)  12%   18,657,104    5%  (26,162,402)    7%
    Total
     operating
     expenses       (177,101,578)  48%   31,285,171    8% (145,816,407)   39%

    Income from
     operations      106,631,531   29%   31,285,171    8%  137,916,702    37%

    Net income
     attributable
     to Ctrip's
     shareholders    104,495,442   28%   31,285,171    8%  135,780,613    37%

    Diluted
     earnings per
     ordinary
     share (RMB)            3.03               0.91               3.94

    Diluted
     earnings per
     ADS (RMB)              1.52               0.45               1.97

    Diluted
     earnings per
     ADS (USD)              0.22               0.07               0.29


      Notes for all the financial schedules presented:

      Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is
              based on the noon buying rate of USD1.00=RMB6.8262 on September
              30, 2009 in The City of New York for cable transfers of RMB as
              certified for customs purposes by the Federal Reserve Bank of
              New York.

SOURCE Ctrip.com International, Ltd.

Lin Zhang, Ctrip.com International, Ltd., +86-21-3406-4880 x12920, or z_lin@ctrip.com; or June Zhu, Ctrip.com International, Ltd., +86-21-3406-4880 x12258, or jun_zhu@ctrip.com

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