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Ctrip Reports Unaudited Second Quarter of 2017 Financial Results

SHANGHAI, Aug. 30, 2017 /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, 2017.

Key Highlights

  • Ctrip reported strong financial results in the second quarter of 2017.
    • Net revenue increased 45% year-on-year to RMB6.4 billion in the second quarter of 2017.
      • The accommodation reservation business delivered healthy growth in the second quarter of 2017, primarily driven by the volume growth of organic businesses.
      • The transportation ticketing business also continued its strong growth, benefiting from solid execution of organic air ticketing business, fast growing new business units and the addition of Skyscanner to the Ctrip group.
    • Gross margin was 82% for the second quarter of 2017, improving from 72% for the same quarter of 2016 and 80% for the previous quarter, due to further efficiency gain
    • Operating margin for the second quarter of 2017 was 10%. Excluding share-based compensation charges, Non-GAAP operating margin for the second quarter of 2017 was 18%, improving significantly from 4% for the same quarter a year of 2016, primarily driven by improvements in operating efficiency across the board and synergies from the invested companies.
  • The company has continued to strengthen its position in lower-tier cities. Both new customer acquisition and user engagement in lower-tier cities improved significantly in the second quarter of 2017. Ctrip and Qunar have opened over 400 offline retail stores by the end of the quarter with approximately 200 more in the pipeline.
  • Skyscanner has officially launched its "direct booking" business, which introduces travelers to a seamless booking experience. Conversion rates of mobile traffic for direct-booking partners have increased by approximately 50%.

"We are pleased with the strong operating and financial results in the second quarter." said Jane Jie Sun, Chief Executive Officer. "Ctrip maintained healthy revenue growth and achieved continual improvement in operating efficiency. The group will remain focused on operating fundamentals that create value for our customers and suppliers. We are confident that Ctrip will generate long-term value for shareholders in the years to come."

"The Ctrip group has made good progress in expanding into lower-tier cities and increasing presence in international markets in the first half of 2017," said James Jianzhang Liang, Executive Chairman. "We will continue to invest in these markets and keep improving our comprehensive product offering, providing superior services and driving effective marketing to serve both domestic and international customers."

Second Quarter of 2017 Financial Results and Business Updates

For the second quarter of 2017, Ctrip reported net revenue of RMB6.4 billion (US$946 million), representing a 45% increase from the same period of 2016. Net revenue for the second quarter of 2017 increased 5% from the previous quarter.

Accommodation reservation revenue for the second quarter of 2017 were RMB2.3 billion (US$341 million), representing a 30% increase from the same period of 2016, primarily driven by an increase in accommodation reservation volume. Accommodation reservation revenue for the second quarter of 2017 increased 12% from the previous quarter, primarily due to seasonality.

Transportation ticketing revenue for the second quarter of 2017 were RMB3.0 billion (US$441 million), representing a 49% increase from the same period of 2016, primarily driven by an increase in ticketing volume and the consolidation of Skyscanner's financial results since December 31, 2016. Transportation ticketing revenue increased 4% from the previous quarter, primarily due to seasonality.

Packaged-tour revenue for the second quarter of 2017 were RMB612 million (US$90 million), representing a 29% increase from the same period of 2016, primarily driven by an increase in volume growth of organized tours and self-guided tours. Packaged-tour revenue for the second quarter of 2017 decreased 13% from the previous quarter, primarily due to seasonality for Chinese New Year in the first quarter.

Corporate travel revenue for the second quarter of 2017 were RMB199 million (US$29 million), representing a 36% increase from the same period of 2016, primarily driven by expansion in travel product coverage. Corporate travel revenue for the second quarter of 2017 increased 38% from the previous quarter, primarily due to seasonality.

Gross margin was 82% for the second quarter of 2017, compared to 72% for the same period of 2016, and 80% for the previous quarter.

Product development expenses for the second quarter of 2017 increased by 18% to RMB2.0 billion (US$300 million) from the same period of 2016, primarily due to an increase in product development personnel related expenses. Product development expenses for the second quarter of 2017 increased 4% from the previous quarter. Product development expenses for the second quarter of 2017 accounted for 32% of the net revenue. Excluding share-based compensation charges, Non-GAAP product development expenses for the second quarter of 2017 accounted for 27% of the net revenue, which decreased from 31% for the same period of 2016 and decreased from 28% for the previous quarter.

Sales and marketing expenses for the second quarter of 2017 increased by 49% to RMB2.0 billion (US$295 million) from the same period of 2016, primarily due to an increase in sales and marketing related activities. Sales and marketing expenses for the second quarter of 2017 increased 6% from the previous quarter. Sales and marketing expenses for the second quarter of 2017 accounted for 31% of the net revenue. Excluding share-based compensation charges, Non-GAAP sales and marketing expenses for the second quarter of 2017 accounted for 30% of the net revenue, which increased from 29% for the same period of 2016 and remained consistent with the previous quarter.

General and administrative expenses for the second quarter of 2017 increased by 19% to RMB608 million (US$90 million) from the same period of 2016, primarily due to an increase in general and administrative personnel related expenses and consulting expenses. General and administrative expenses for the second quarter of 2017 decreased 5% from the previous quarter. General and administrative expenses for the second quarter of 2017 accounted for 9% of the net revenue. Excluding share-based compensation charges, Non-GAAP general and administrative expenses accounted for 7% of the net revenue, which decreased from 8% for the same period of 2016 and remained consistent with the previous quarter.

Income from operations for the second quarter of 2017 was RMB645 million (US$95 million), compared to loss of RMB396 million for the same period of 2016 and income of RMB414 million for the previous quarter. Excluding share-based compensation charges, Non-GAAP income from operations was RMB1.2 billion (US$173 million), compared to RMB182 million for the same period of 2016 and RMB936 million for the previous quarter.

Operating margin was 10% for the second quarter of 2017, compared to -9% for the same period of 2016, and 7% for the previous quarter. Excluding share-based compensation charges, Non-GAAP operating margin was 18%, compared to 4% for the same period of 2016 and 15% for the previous quarter.

Income tax expense for the second quarter of 2017 was RMB529 million (US$78 million), compared to RMB53 million for the same period of 2016 and RMB148 million for the previous quarter. The change in the Group's effective tax rates is primarily due to the change in profitability in the subsidiaries with different tax rates and certain non-tax deductible losses including the share based compensation.

Net income attributable to Ctrip's shareholders for the second quarter of 2017 was RMB327 million (US$48 million), compared to net loss of RMB521 million for the same period of 2016 and net income of RMB82 million for the previous quarter, primarily due to the net gain recognized from a number of investing activities.

Diluted earnings per ADS were RMB0.59 (US$0.09) for the second quarter of 2017. Excluding share-based compensation charges, Non-GAAP diluted earnings per ADS were RMB1.49 (US$0.22) for the second quarter of 2017.

As of June 30, 2017, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB42 billion (US$6 billion).

Business Outlook

For the third quarter of 2017, the Company expects the net revenue growth to continue at a year-on-year rate of approximately 35-40%. 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 30, 2017 (or 8:00AM on August 31, 2017 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 twelve months at this website.

The dial-in details for the live conference call: U.S. Toll Free Number +1.800.219.3192, International dial-in number +1.617.597.5412, Passcode 73775212#. For pre-registration, please click https://www.theconferencingservice.com/prereg/key.process?key=PCRWLE6WB.

A telephone replay of the call will be available after the conclusion of the conference call until September 6, 2017. 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 95039104.

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. 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 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 the relevant jurisdictions where Ctrip operates, failure to successfully develop Ctrip's existing or future business lines, 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. 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 attributable to Ctrip's shareholders, 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" and its share-based compensation charges are not tax deductible. 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 12229
Email: iremail@ctrip.com

 

Ctrip.com International, Ltd. 

Unaudited Condensed Consolidated Balance Sheets
























December 31, 2016



June 30, 2017



June 30, 2017


RMB

RMB

USD












(unaudited)



(unaudited)



(unaudited)



ASSETS










Current assets:










Cash and cash equivalents


18,434,681,251



16,196,266,530



2,389,076,532


Restricted cash


1,744,490,307



1,967,095,499



290,162,037


Short-term investment 


14,112,862,288



24,259,372,528



3,578,448,000


Accounts receivable, net


4,624,818,322



5,266,699,517



776,879,548


Prepayments and other current assets


6,994,589,672



7,096,517,421



1,046,792,061












Total current assets


45,911,441,840



54,785,951,495



8,081,358,178












Long-term deposits and prepayments     


1,147,279,197



1,197,325,755



176,614,954


Land use rights


99,544,772



98,153,068



14,478,349


Property, equipment and software


5,591,960,081



5,647,530,298



833,055,079


Investment


20,532,822,365



22,166,556,356



3,269,741,176


Goodwill


56,015,185,590



56,218,081,472



8,292,608,599


Intangible assets


13,924,769,931



13,736,713,759



2,026,273,178


Other long-term receivable


815,586,298



427,828,839



63,108,114


Deferred tax assets, non-current


375,311,594



403,491,741



59,518,201












Total assets


144,413,901,668



154,681,632,783



22,816,755,828












LIABILITIES










Current liabilities:










Short-term debt 


6,887,309,589



10,587,149,173



1,561,687,663


Accounts payable


7,278,791,082



7,029,505,820



1,036,907,324


Salary and welfare payable


2,508,430,757



2,578,007,248



380,276,319


Taxes payable


1,084,241,429



928,723,072



136,993,948


Advances from customers


8,190,840,057



7,782,891,124



1,148,037,574


Accrued liability for customer reward program


658,170,680



631,248,684



93,114,139


Other payables and accruals


3,687,242,592



5,229,738,409



771,427,494












Total current liabilities


30,295,026,186



34,767,263,530



5,128,444,461












Deferred tax liabilities, non-current


3,607,882,808



3,536,174,707



521,613,545


Long-term debt


34,650,673,553



35,595,921,305



5,250,677,991


Other long-term liabilities


339,566,619



478,675,528



70,608,400












Total liabilities


68,893,149,166



74,378,035,070



10,971,344,397












SHAREHOLDERS' EQUITY










Share capital


4,960,354



5,139,501



758,117


Additional paid-in capital


65,819,998,701



70,425,644,869



10,388,335,797


Statutory reserves


237,495,820



237,473,826



35,029,255


Accumulated other comprehensive income


1,010,373,732



2,746,834,574



405,179,675


Retained Earnings


6,699,580,613



7,108,900,663



1,048,618,687


Treasury stock 


(2,235,574,510)



(2,214,966,126)



(326,724,902)












Total Ctrip's shareholders' equity


71,536,834,710



78,309,027,307



11,551,196,629












Noncontrolling interests


3,983,917,792



1,994,570,406



294,214,802












Total shareholders' equity


75,520,752,502



80,303,597,713



11,845,411,431












Total liabilities and shareholders' equity


144,413,901,668



154,681,632,783



22,816,755,828











 

 

Ctrip.com International, Ltd. 

Unaudited Condensed Consolidated Statements of Comprehensive Income






























Quarter Ended



Quarter Ended



Quarter Ended



Quarter Ended


June 30, 2016

March 31, 2017

June 30, 2017

June 30, 2017


RMB

RMB

RMB

USD














(unaudited)



(unaudited)



(unaudited)



(unaudited)



Revenue:













Accommodation reservation 


1,775,818,174



2,069,936,145



2,311,142,987



340,911,744


Transportation ticketing 


2,003,426,795



2,875,375,346



2,992,330,356



441,392,232


Packaged-tour


473,931,453



701,832,134



612,297,777



90,318,732


Corporate travel


147,096,362



144,481,666



199,352,936



29,406,124


Others


142,119,432



341,645,121



346,439,294



51,102,517















Total revenue


4,542,392,216



6,133,270,412



6,461,563,350



953,131,349















Less: business tax and related surcharges


(131,107,435)



(48,208,523)



(45,794,149)



(6,754,997)















Net revenue


4,411,284,781



6,085,061,889



6,415,769,201



946,376,352















Cost of revenue


(1,233,148,536)



(1,189,306,790)



(1,124,094,146)



(165,812,716)















Gross profit


3,178,136,245



4,895,755,099



5,291,675,055



780,563,636















Operating expenses:













Product development *


(1,723,757,548)



(1,962,685,237)



(2,036,738,021)



(300,434,856)


Sales and marketing *


(1,340,183,930)



(1,880,630,701)



(2,001,471,557)



(295,232,776)


General and administrative *


(510,107,769)



(638,265,375)



(608,203,223)



(89,714,753)















Total operating expenses


(3,574,049,247)



(4,481,581,313)



(4,646,412,801)



(685,382,385)















(Loss)/ income from operations


(395,913,002)



414,173,786



645,262,254



95,181,251















Interest income 


150,858,298



130,280,136



249,426,782



36,792,410


Interest expense


(162,964,862)



(260,257,970)



(383,446,788)



(56,561,413)


Other (expense)/income


(30,423,035)



(88,401,074)



397,102,679



58,575,764















(Loss)/ income before income tax expense and equity in income


(438,442,601)



195,794,878



908,344,927



133,988,012















Income tax expense


(52,984,311)



(148,445,807)



(529,202,309)



(78,061,497)


Equity in (loss)/ income of affiliates


(99,658,215)



27,267,588



(26,696,373)



(3,937,925)















Net (loss)/income


(591,085,127)



74,616,659



352,446,245



51,988,590















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


69,832,593



7,831,322



(25,574,176)



(3,772,392)















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


(521,252,534)



82,447,981



326,872,069



48,216,198















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


(996,941,629)



1,233,112,187



912,668,705



134,625,803















Earnings per ordinary share













- Basic


(9.03)



1.27



4.97



0.73


- Diluted


(9.03)



1.21



4.72



0.70















Earnings per ADS 













- Basic


(1.13)



0.16



0.62



0.09


- Diluted


(1.13)



0.15



0.59



0.09















Weighted average ordinary shares outstanding













- Basic


57,716,573



64,940,107



65,743,078



65,743,078


- Diluted


57,716,573



68,483,538



69,361,680



69,361,680















* Share-based compensation charges included are as follows:













  Product development 


345,176,289



283,241,889



305,271,403



45,029,930


  Sales and marketing 


69,056,692



48,779,212



58,994,568



8,702,162


  General and administrative 


163,806,574



189,720,083



163,592,798



24,131,223

 

 

Ctrip.com International, Ltd. 

Reconciliation of  GAAP and Non-GAAP Results

(In RMB, except % and per share information)

























Quarter Ended June 30, 2017




GAAP  Result

% of Net
revenue


Share-based
Compensation

% of Net
revenue


Non-GAAP Result

% of Net
revenue














Product development 

(2,036,738,021)

32%


305,271,403

5%


(1,731,466,618)

27%



Sales and marketing 

(2,001,471,557)

31%


58,994,568

1%


(1,942,476,989)

30%



General and administrative 

(608,203,223)

9%


163,592,798

3%


(444,610,425)

7%



Total operating expenses

(4,646,412,801)

72%


527,858,769

8%


(4,118,554,032)

64%














Income from operations

645,262,254

10%


527,858,769

8%


1,173,121,023

18%














Net income attributable to Ctrip's shareholders

326,872,069

5%


527,858,769

8%


854,730,838

13%














Diluted earnings per ordinary share (RMB)

4.72



7.24



11.96















Diluted earnings per ADS (RMB)

0.59



0.90



1.49















Diluted earnings per ADS (USD)

0.09



0.13



0.22



























Quarter Ended March 31, 2017




GAAP  Result

% of Net
revenue


Share-based
Compensation

% of Net
revenue


Non-GAAP Result

% of Net
revenue














Product development 

(1,962,685,237)

32%


283,241,889

5%


(1,679,443,348)

28%



Sales and marketing 

(1,880,630,701)

31%


48,779,212

1%


(1,831,851,489)

30%



General and administrative 

(638,265,375)

10%


189,720,083

3%


(448,545,292)

7%



Total operating expenses

(4,481,581,313)

74%


521,741,184

9%


(3,959,840,129)

65%














Income from operations

414,173,786

7%


521,741,184

9%


935,914,970

15%














Net income attributable to Ctrip's shareholders

82,447,981

1%


521,741,184

9%


604,189,165

10%














Diluted earnings per ordinary share (RMB)

1.21



7.54



8.75















Diluted earnings per ADS (RMB)

0.15



0.94



1.09















Diluted earnings per ADS (USD)

0.02



0.14



0.16



























Quarter Ended June 30, 2016




GAAP  Result

% of Net
revenue


Share-based
Compensation

% of Net
revenue


Non-GAAP Result

% of Net
revenue














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

2%


(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


























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=RMB6.7793 on June 30 2017 published
by the Federal Reserve Board.


 

 

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SOURCE Ctrip.com International, Ltd.