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Ctrip's net revenue increased 16% to $4.5 billion in 2018

03/05/2019| 10:19:29 AM| 中文

Revenue of accommodation reservation, transportation ticketing, packaged-tour and corporate travel revenue increased by 21%, 6%, 27%, 30% separately in 2018.

Ctrip today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2018.

Key Highlights for the Fourth Quarter and Full Year of 2018

*  Net revenue increased by 22% year-on-year to RMB7.6 billion (US$1.1 billion) in the fourth quarter of 2018, and increased by 16% year-on-year to RMB31.0 billion (US$4.5 billion) for the full year of 2018.

*  Operating margin was -3% for the fourth quarter of 2018, compared to 5% in the same period in 2017, and 16% in the previous quarter. For the full year ended December 31, 2018, operating margin was 8%, compared to 11% in 2017.

Ctrip's international businesses sustained robust growth momentum.

*  In the fourth quarter of 2018, revenue generated from international business makes up 30%~35% of group level revenue.

*  Both international hotel business and international air business excluding Skyscanner tripled the industry growth in the fourth quarter of 2018.

*  Skyscanner's direct booking program continued strong momentum, delivering over 200% revenue growth year-on-year in the fourth quarter of 2018.

Ctrip increased its presence in lower-tier cities.

*  Ctrip branded low-star hotel room-nights maintained strong growth at 50% year-on-year in the fourth quarter of 2018.

*  Gross merchandise value, or GMV, of the offline stores delivered triple digit year-on-year growth in the fourth quarter of 2018.

Excluding Skyscanner, total GMV reached increased by approximately 30% year-on-year to RMB725 billion (US$105 billion) for the full year 2018.

"The solid results in the fourth quarter of 2018 ended the year on a strong note," said Jane Sun, Chief Executive Officer. "Over the year, despite various challenges, we focused on developing innovative new products, offering increased support to our suppliers, and most importantly, putting the customer at the center of everything we do. As a result, we accelerated the pace which we are gaining market share. Transacting users for our China brands continued to grow and now total 135 million, which represents a 25% CAGR increase over the past two years. GMV continued to grow at 30% year-on-year, which puts us well on track to reach our 2020 target." 

"We are pleased with Ctrip's overall performance in 2018," said James Liang, Executive Chairman. "Looking into 2019 and the longer term, we are confident of continued growth. Based on the strong foundation we have laid over the past few years, we expect our market share to increase at an even faster pace going forward as we continue to leverage operational improvements." 

Fourth Quarter and Full Year Results and Business Updates

For the fourth quarter of 2018, Ctrip reported net revenue of RMB7.6 billion (US$1.1 billion), representing a 22% increase from the same period in 2017. Net revenue for the fourth quarter of 2018 decreased by 19% from the previous quarter, primarily due to seasonality.

For the full year ended December 31, 2018, net revenue was RMB31.0 billion (US$4.5 billion), representing a 16% increase from 2017.

Accommodation reservation revenue for the fourth quarter of 2018 was RMB2.7 billion (US$386 million), representing a 22% increase from the same period in 2017, primarily driven by an increase in accommodation reservation volume. Accommodation reservation revenue for the fourth quarter of 2018 decreased by 27% from the previous quarter, primarily due to seasonality.

For the full year ended December 31, 2018, accommodation reservation revenue was RMB11.6 billion (US$1.7 billion), representing a 21% increase from 2017. The accommodation reservation revenue accounted for 37% of the total revenue in 2018 and 35% of the total revenue in 2017.

Transportation ticketing revenue for the fourth quarter of 2018 was RMB3.4 billion (US$496 million), representing a 17% increase from the same period in 2017, primarily driven by an increase in ticketing volume. Transportation ticketing revenue decreased by 6% from the previous quarter, primarily due to seasonality.

For the full year ended December 31, 2018, transportation ticketing revenue was RMB12.9 billion (US$1.9 billion), representing a 6% increase from 2017. The transportation ticketing revenue accounted for 42% of the total revenue in 2018 and 45% of the total revenue in 2017.

Packaged tour revenue for the fourth quarter of 2018 was RMB721 million (US$105 million), representing a 31% increase from the same period in 2017, primarily driven by an increase in volume of organized tours and self-guided tours. Packaged-tour revenue for the fourth quarter of 2018 decreased by 48% from the previous quarter, primarily due to seasonality.

For the full year ended December 31, 2018, packaged-tour revenue was RMB3.8 billion (US$549 million), representing a 27% increase from 2017. The packaged-tour revenue accounted for 12% of the total revenue in 2018 and 11% of the total revenue in 2017.

Corporate travel revenue for the fourth quarter of 2018 was RMB279 million (US$41 million), representing a 35% increase from the same period in 2017, primarily driven by expansion in travel product coverage. Corporate travel revenue for the fourth quarter of 2018 increased by 5% from the previous quarter.

For the full year ended December 31, 2018, corporate travel revenue was RMB981 million (US$143 million), representing a 30% increase from 2017. The corporate travel revenue accounted for 3% of the total revenue in 2018 and remained consistent with 2017.

Gross margin was 79% for the fourth quarter of 2018, compared to 83% in the same period in 2017, and remained consistent with the previous quarter.

For the full year ended December 31, 2018, gross margin was 80%, compared to 83% in 2017.

Product development expenses for the fourth quarter of 2018 increased by 31% to RMB2.7 billion (US$395 million) from the same period in 2017, and increased by 9% from the previous quarter, primarily due to an increase in product development personnel related expenses. Product development expenses for the fourth quarter of 2018 accounted for 36% of the net revenue. Excluding share-based compensation charges, non-GAAP product development expenses for the fourth quarter of 2018 accounted for 33% of the net revenue, which increased from 30% for the same period of 2017 and increased from 24% for the previous quarter.

For the full year ended December 31, 2018, product development expenses increased by 16% to RMB9.6 billion (US$1.4 billion) from 2017 and accounted for 31% of the net revenue. Excluding share-based compensation charges, non-GAAP product development expenses accounted for 28% of the net revenue, compared to 27% in 2017.

Sales and marketing expenses for the fourth quarter of 2018 increased by 28% to RMB2.6 billion (US$380 million) from the same period in 2017, primarily due to an increase in sales and marketing related activities. Sales and marketing expenses decreased by 4% from the previous quarter. Sales and marketing expenses for the fourth quarter of 2018 accounted for 35% of the net revenue. Excluding share-based compensation charges, non-GAAP sales and marketing expenses for the fourth quarter of 2018 accounted for 34% of the net revenue, which increased from 32% in the same period in 2017 and increased from 29% in the previous quarter.

For the full year ended December 31, 2018, sales and marketing expenses increased by 16% to RMB9.6 billion (US$1.4 billion) from 2017 and accounted for 31% of the net revenue. Excluding share-based compensation charges, non-GAAP sales and marketing expenses accounted for 30% of the net revenue, which remained consistent with 2017.

Loss from operations for the fourth quarter of 2018 was RMB189 million (US$29 million), compared to the income of RMB303 million in the same period in 2017 and RMB1.5 billion in the previous quarter. Excluding share-based compensation charges, non-GAAP income from operations was RMB261million (US$37 million), compared to RMB703 million in the same period in 2017 and RMB1.9 billion in the previous quarter.

For the full year ended December 31, 2018, income from operations was RMB2.6 billion (US$379 million), compared to RMB2.9 billion in 2017. Excluding share-based compensation charges, non-GAAP income from operations was RMB4.3 billion (US$628 million), compared to RMB4.8 billion in 2017.

Income tax expense for the fourth quarter of 2018 was RMB35 million (US$5 million), compared to RMB238 million in the same period of 2017 and RMB257 million in the previous quarter. The change in our effective tax rate primarily reflected certain non-taxable loss of the fair value changes in equity securities investments.

For the full year ended December 31, 2018, income tax expense was RMB793 million (US$115 million), compared to RMB1.3 billion in 2017.

Business Outlook

For the first quarter of 2019, the Company expects the net revenue growth to continue at a year-on-year rate of approximately 18~23%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.

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