Ctrip announced its unaudited financial results for the second quarter ended June 30, 2017.
Key Highlights
* Net revenue increased 45% to RMB 6.4 billion in the second quarter of 2017.
* Transportation ticketing benefited from air ticketing growth, new business units and the addition of Skyscanner.
* Gross margin was 82% for the quarter, rising from 72% for Q2 2016, and 80% for Q1 2017.
* Operating margin for the second quarter of 2017 was 10%.
* Presence in Lower-tier cities is further strengthened.
* Ctrip and Qunar have opened over 400 offline retail stores, with 200 more in the pipeline.
* Skyscanner has officially launched its "direct booking" business.
* Conversion of mobile traffic for direct-booking partners have increased by 50%.
CEO Jane Jie Sun said:
"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."
Executive Chairman James Jianzhang Liang commented:
"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...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."
Financial Results and Business Updates
For the second quarter of 2017, Ctrip reported net revenue of RMB 6.4 billion (USD 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 was RMB 2.3 billion (USD 341 million), up by 30%. Accommodation reservation revenue rose 12% from the previous quarter.
Transportation ticketing revenue climbed 49% to RMB 3.0 billion (USD 441 million), 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.
Packaged-tour revenue was RMB 612 million (USD 90 million), a 29% increase from the same period of 2016. Packaged-tour revenue for the second quarter dropped 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 was RMB 199 million (USD 29 million), representing a 36% increase, primarily driven by expansion in travel product coverage. Corporate travel revenue increased 38%.
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.
Income from operations for the second was RMB 645 million (USD 95 million), compared to loss of RMB 396 million for the same period of 2016 and income of RMB 414 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.
Net income attributable to Ctrip's shareholders for the second quarter of 2017 was RMB 327 million (USD 48 million), compared to net loss of RMB 521 million for the same period of 2016 and net income of RMB 82 million for the previous quarter, primarily due to the net gain recognized from a number of investing activities.
As of June 30, 2017, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB 42 billion (USD 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%.
