Home > Tour Operators > Ctrip Reports Unaudited Third Quarter 2014 Financial Results

Ctrip Reports Unaudited Third Quarter 2014 Financial Results

11/26/2014| 12:33:12 PM| 中文

Ctrip.com International, Ltd. (Nasdaq: CTRP) announced its unaudited financial results for the quarter ended September 30, 2014.

SHANGHAI, Nov. 25, 2014 /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 quarter ended September 30, 2014.

Highlights for the Third Quarter of 2014

Net revenues were RMB2.1 billion (US$347 million) for the third quarter of 2014, up 38% year-on-year, exceeding our net revenue guidance for the third quarter 2014 of 30-35% increase year-on-year.
Accommodation reservation volume increased 69% year-on-year, exceeding our guidance of 50-60% volume increase year-on year, and accommodation reservation revenues increased 56% year-on-year, reaching RMB950 million (US$155 million) for the third quarter of 2014.
Transportation ticketing volume increased 98% year-on-year, exceeding our guidance of 60-70% volume increase year-on year, and transportation ticketing revenues increased 32% year-on-year, reaching RMB800 million (US$130 million) for the third quarter of 2014.
Gross margin was 72% for the third quarter of 2014, compared to 75% in the same period in 2013, and remained consistent with that in the previous quarter.
Income from operations was RMB88 million (US$14 million) for the third quarter of 2014, down 71% year-on-year. Excluding share-based compensation charges (non-GAAP), income from operations was RMB225 million (US$37 million), down 45% year-on-year.
Operating margin was 4% for the third quarter of 2014, compared to 19% in the same period in 2013 and 5% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 11%, compared to 27% in the same period in 2013, and 12% in the previous quarter.
Net income attributable to Ctrip's shareholders was RMB217 million (US$35 million) for the third quarter of 2014, down 42% year-on-year. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB354 million(US$58 million), down 27% year-on-year. 
Diluted earnings per ADS were RMB1.38 (US$0.22) for the third quarter of 2014. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB2.24 (US$0.36) for the third quarter of 2014.
Share-based compensation charges were RMB137 million (US$22 million), accounting for 6% of the net revenues, or RMB0.86(US$0.14) per ADS for the third quarter of 2014.

"We are pleased to report the solid performance of Ctrip in the third quarter of 2014," said James Liang, Chairman and Chief Executive Officer of Ctrip. "Accommodation reservation and transportation ticketing services maintained robust growth, reaching 69% and 98% year-over-year in volume respectively. The number of Ctrip mobile app downloads reached 350 million, growing 75% from the previous quarter. We are also encouraged by the progress of our new initiatives. Through the open-platform, we work with around 1,000 hotel agency partners, China's top 600 air ticketing agencies, and over 800 local travel agencies. Total hotel transactions through the open-platform reached approximately RMB1 billion during the third quarter. We will continue to invest in our open platform strategy and in technology and services to create more value for both our customers and partners."

Third Quarter 2014 Financial Results

For the third quarter of 2014, Ctrip reported total revenues of RMB2.3 billion (US$368 million), representing a 38% increase from the same period in 2013. Total revenues for the third quarter of 2014 increased by 24% from the previous quarter.

Accommodation reservation revenues amounted to RMB950 million (US$155 million) for the third quarter of 2014, representing a 56% increase year-on-year, primarily driven by an increase of 69% in accommodation reservation volume, partially offset by the decrease of commission per room night. Accommodation reservation revenues increased by 26% quarter-on-quarter.

Transportation ticketing revenues for the third quarter of 2014 were RMB800 million (US$130 million), representing a 32% increase year-on-year, driven by an increase of 98% in ticketing volume. Transportation ticketing revenues increased by 10% quarter-on-quarter.

Packaged-tour revenues for the third quarter of 2014 were RMB358 million (US$58 million), representing a 12% increase year-on-year, driven by an increase of 52% in volume of organized tours and self-guided tours. Packaged-tour revenues increased by 74% quarter-on-quarter, primarily due to seasonality.

Corporate travel revenues for the third quarter of 2014 were RMB104 million (US$17 million), representing a 45% increase year-on-year, primarily driven by the increased corporate travel demand from business activities. Corporate travel revenues increased by 15% quarter-on-quarter, primarily due to seasonality.

For the third quarter of 2014, net revenues were RMB2.1 billion (US$347 million), representing a 38% increase from the same period in 2013. Net revenues for the third quarter of 2014 increased by 24% from the previous quarter.

Gross margin was 72% for the third quarter of 2014, compared to 75% in the same period in 2013 and remained consistent with that in the previous quarter.

Product development expenses for the third quarter of 2014 increased by 83% to RMB612 million (US$100 million) from the same period in 2013 and 28% from the previous quarter, primarily due to an increase in product development personnel related expenses. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 26% of the net revenues, increased from 20% in the same period in 2013 and 25% in the previous quarter.

Sales and marketing expenses for the third quarter of 2014 increased by 69% to RMB598 million (US$97 million) from the same period in 2013 and increased by 25% from the previous quarter, primarily due to an increase in sales and marketing related activities. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 27% of the net revenues, increased from 22% in the same period in 2013 and remained consistent with that in the previous quarter.

General and administrative expenses for the third quarter of 2014 increased by 40% to RMB242 million (US$39 million) from the same period in 2013 and 25% from the previous quarter primarily due to an increase in administrative personnel related expenses. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 8% of the net revenues, increased from 7% in the same period in 2013 and remained consistent with that in the previous quarter.

Income from operations for the third quarter of 2014 was RMB88 million (US$14 million), representing a decrease of 71% from the same period in 2013 and a decrease of 3% from the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB225 million (US$37 million), representing a decrease of 45% from the same period in 2013 and an increase of 11% from the previous quarter.

Operating margin was 4% for the third quarter of 2014, compared to 19% in the same period in 2013, and 5% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 11%, compared to 27% in the same period in 2013 and 12% in the previous quarter. 

The effective tax rate for the third quarter of 2014 was 23%, increased from 22% in the same period of 2013, primarily due to the increase in the amount of non-tax-deductible share-based compensation as a percentage to our income as a whole. The effective tax rate for the third quarter of 2014 decreased from 32% in the previous quarter, primarily due to the decrease in the amount of non-tax-deductible share-based compensation as a percentage to our income as a whole.

Net income attributable to Ctrip's shareholders for the third quarter of 2014 was RMB217 million (US$35 million), representing a decrease of 42% from the same period in 2013 and an increase of 61% from the previous quarter. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip's shareholders was RMB354 million (US$58 million), representing a decrease of 27% from the same period in 2013 and an increase of 44% from the previous quarter.

Diluted earnings per ADS were RMB1.38 (US$0.22) for the third quarter of 2014. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB2.24 (US$0.36) for the third quarter of 2014.

As of September 30, 2014, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB11 billion (US$1.8 billion).

Business Outlook

For the fourth quarter of 2014, the Company expects to continue the net revenue growth year-on-year at a rate of approximately 30%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.

Recent Development

In November, 2014, Ctrip and Royal Caribbean Cruises Ltd. have agreed to form a strategic partnership through SkySea Cruises, a joint venture which is designed to serve the Chinese cruise market. Royal Caribbean and Ctrip will each own 35% of the new company, with the balance being owned by SkySea management and a private equity fund. The transaction is expected to close before the end of November.

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TAGS: Ctrip | Q3 | financial review
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