Ctrip buys Skyscanner, reaps $4million net income in Q3
Ctrip announces the deal to acquire UK-based travel search site Skyscanner. The company reaped USD 4 million net income in Q3 2016, after previous quarter's net loss with Qunar's consolidated results.
Ctrip announced the deal to acquire UK-based travel search site Skyscanner in its unaudited financial results for the third quarter ended September 30, 2016.
Ctrip announced that it signed a definitive agreement with the majority shareholders of Skyscanner Holdings ("Skyscanner"), a leading global travel search site headquartered in Edinburgh, the United Kingdom. The deal values Skyscanner at approximately GBP 1.4 billion and the purchase consideration consists of cash mainly, the remainder consisting of Ctrip ordinary shares and loan notes.
Highlights for Q3 2016
Net revenues increased 75% year-on-year to RMB 5.6 billion in the third quarter of 2016. Operating margin for the third quarter of 2016 was 8%, increasing meaningfully from -9% in the previous quarter. Ctrip has generated positive net profits two quarters after we consolidated the invested company's operating results.
In September 2016, the Company completed concurrent offerings of both ADSs and convertible senior notes. The total proceeds from the offerings were approximately USD 2.6 billion.
Q3 Results and Business Updates
Accommodation reservation revenues for the quarter were RMB2.1 billion (USD 311 million), representing a 51% increase from the same period in 2015 and a 17% 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 third quarter of 2016 were RMB2.4 billion (USD 364 million), representing a 101% increase from the same period in 2015.
Packaged-tour revenues for the third quarter of 2016 were RMB813 million (USD 122 million), representing a 37% increase from the same period in 2015. Corporate travel revenues for the third quarter of 2016 were RMB166 million (USD 25 million), representing a 34% increase from the same period in 2015 and a 13% increase from the previous quarter.
Net income attributable to Ctrip's shareholders for the third quarter of 2016 was RMB 24 million (USD 4 million), compared to net income of RMB 2.4 billion in the same period in 2015 and net loss of RMB521 million in the previous quarter. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB581 million (USD 87 million).
Q&A in the Conference call
Asked about competition from Alibaba, Meituan and Airbnb in the travel sector, Jane said during the Q3 conference call that Ctrip will focus on the company's technology, service, product offerings and branding.
For the fourth quarter of 2016, the Company expects the net revenue growth to continue at a year-on-year rate of approximately 70-75%.