BEIJING, Aug. 13 /Xinhua-PRNewswire/ -- eLong, Inc. (Nasdaq: LONG - News), a leading online travel service provider in China, today reported unaudited financial results for the second quarter ended June 30, 2007.
Business Highlights for the Second Quarter 2007
-- Travel revenues, comprised of hotel, air and other travel service
revenues, increased 16% to RMB75.4 million for the second quarter 2007
compared with the prior year period.
-- Travel revenues by service line for the second quarters of 2007 and
2006 were as follows (figures in RMB 000´s):
% % Y/Y
Q2 2007 Total Q2 2006 Total Growth
Hotel commissions 60,162 79.8 % 53,753 82.7 % 12 %
commissions 13,850 18.4 % 9,641 14.8 % 44 %
Other travel revenue 1,400 1.9 % 1,629 2.5 % -14 %
Total travel revenue 75,412 100 % 65,023 100 % 16 %
-- The Company recorded an operating loss of RMB 2.2 million for the
second quarter, compared with an operating loss of RMB1.2 million for
the second quarter of 2006, with greater sales and marketing and
service development expense offsetting the Company´s increased gross
-- The Company recorded a net loss of RMB 1.8 million for the second
quarter, compared with a net income of RMB10.2 million for the second
quarter of 2006. Net income decreased RMB 12.0 million primarily due
to prior year other income of RMB 8.5 million related to interest
income and unrealized exchange loss and a gain on the sale of
discontinued operations of RMB 2.6 million. Excluding these items, net
loss for the second quarter 2006 would have been RMB 0.9 million.
-- As of June 30, 2007 cash and cash equivalents were RMB1.17 billion
(US$154 million), down 2% from RMB1.20 billion at December 31, 2006.
Cash balances decreased RMB28.6 million primarily due to the majority
of our cash being held in US$ and the resulting impact of the
appreciation of the RMB.
´While eLong´s top-line results were in line with our expectations, we are not nearly satisfied with our performance. We have begun a comprehensive turnaround program to improve the Company´s execution,´´ said Henrik Kjellberg, Chairman and interim Chief Executive Officer of eLong, Inc.
´´Management is committed to making structural improvements in our hotel and air products, our customer service and our overall management talent. It will take time to regain momentum, but we are confident that eLong can successfully improve its performance and better leverage the growing Chinese travel market.´´
Total and travel revenues increased 17% and 16%, respectively, for the second quarter of 2007 compared with the prior year period, reflecting continued growth in our core hotel commissions business and the 44% increase in air ticketing commissions.
Hotel commission revenue increased 12% year-over-year primarily due to higher room volume. Room nights booked through eLong increased 11% to 922,000, while commission per room night remained largely unchanged at RMB65.
eLong has grown its hotel offering over 28% since second quarter 2006, and now features discounted rates at nearly 4,500 hotels in over 300 cities across China.
Air ticketing commission revenue increased 44% primarily due to a 41% increase in air segments to 347,000, as well as a modest 2% increase in commission per air ticket to RMB40.
Gross margin in the second quarter of 2007 was 73.5%, a decrease of 364 basis points compared with 77.1% in the prior year period. Gross margin decreased due to the increased mix of lower margin air commissions and increased compensation expense related to investments in our call center talent and infrastructure.
The Company recorded a net loss of RMB1.8 million for the second quarter compared to a net income of RMB10.2 million in the prior year period, Our US GAAP diluted loss per ADS for the second quarter of 2007 was RMB0.08 compared to a diluted income per ADS of RMB0.38 in the prior year period.
eLong expects total revenues for the third quarter of 2007 within the range of RMB79.0 million to RMB87.0 million, an increase of 6% to 17% from the third quarter of 2006.