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Ctrip reports unaudited first quarter of 2018 financial results

Author: Vicky Karantzavelou / Date: Wed, 05/23/2018 - 10:56
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Ctrip headquarters.
Ctrip headquarters.

Net revenue increased 11% year-on-year to RMB6.7 billion (US$1.1 billion) in the first quarter of 2018. Ctrip's international businesses sustained robust growth momentum.

SHANGHAI - Ctrip.com International, Ltd., a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China announced its unaudited financial results for the first quarter ended March 31, 2018.

Key Highlights for the First Quarter of 2018

  • Ctrip reported strong financial results in the first quarter of 2018.
     -Net revenue increased 11% year-on-year to RMB6.7 billion (US$1.1 billion) in the first quarter of 2018.
    - Net income attributed to Ctrip's shareholders increased by more than 19 times year-on-year to RMB1.1 billion (US$ 170 million) in the first quarter of 2018, compared to RMB52 million in the same period in 2017.
  • Ctrip's international businesses sustained robust growth momentum.
    - Excluding Skyscanner, international air ticketing accounted for over 40% of the group's air ticketing revenue, as we continue to ride the wave of Chinese outbound customers and expand our customer base in overseas markets.
    - Skyscanner's direct booking program continues to gain momentum, delivering revenue growth of over 600% year-on-year in the first quarter.
  • The company increased its presence in lower-tier cities.
    - Total gross merchandise volume of the offline stores grew around 50% year-on-year in the first quarter of 2018.

"I'm glad that Ctrip achieved solid results in the first quarter of 2018," said Jane Sun, Chief Executive Officer. "We are hugely grateful for the trust of our customers. Together with our partners, we strive to make their travel easier and more enjoyable. There are still many improvements for us to make, and also many areas where we can further unleash our potential. We are in a good position to capture growth in the travel industry, both domestically and globally, and we are very excited about the bright future ahead of us."

"In the past 19 years since the launch of Ctrip, we have claimed many firsts in the travel service area," said James Liang, Executive Chairman. "We must be mindful that Ctrip's success to date has come from the value we created for customers, and this will not change in the future. Despite the challenges and setbacks along the way, we believe that as long as we stick to customer centric principles and continually make investments and innovations, we will become the best travel service provider in the world and the pride of the travel industry."

First Quarter of 2018 Financial Results and Business Updates
For the first quarter of 2018, Ctrip reported net revenue of RMB6.7 billion (US$1.1 billion), representing an 11% increase from the same period in 2017. Net revenue for the first quarter of 2018 increased 9% from the previous quarter.

Accommodation reservation revenue for the first quarter of 2018 was RMB2.5 billion (US$397 million), representing a 23% increase from the same period in 2017, primarily driven by an increase in accommodation reservation volume. Accommodation reservation revenue for the first quarter of 2018 increased 14% from the previous quarter, primarily due to seasonality.

Transportation ticketing revenue for the first quarter of 2018 was RMB2.9 billion (US$460 million), which remained consistent with the same period of 2017. Transportation ticketing revenue decreased 1% from the previous quarter.

Packaged tour revenue for the first quarter of 2018 was RMB834 million (US$133 million), representing an 18% increase from the same period in 2017, primarily driven by an increase in volume growth of organized tours and self-guided tours. Packaged-tour revenue for the first quarter of 2018 increased 52% from the previous quarter, primarily due to seasonality.

Corporate travel revenue for the first quarter of 2018 was RMB180 million (US$29 million), representing a 25% increase from the same period in 2017, primarily driven by expansion in travel product coverage. Corporate travel revenue for the first quarter of 2018 decreased 13% from the previous quarter, primarily due to seasonality.

Gross margin was 82% for the first quarter of 2018, compared to 80% in the same period in 2017, and 83% for the previous quarter.

Product development expenses for the first quarter of 2018 increased by 10% to RMB2.2 billion (US$344 million) from the same period in 2017, primarily due to the increase in product development personnel related expenses. Product development expenses for the first quarter of 2018 increased 4% from the previous quarter. Product development expenses for the first quarter of 2018 accounted for 32% of the net revenue. Excluding share-based compensation charges, Non-GAAP product development expenses for the first quarter of 2018 accounted for 29% of the net revenue, which increased from 28% for the same period in 2017 and decreased from 30% for the previous quarter.

Sales and marketing expenses for the first quarter of 2018 increased by 11% to RMB2.1 billion (US$333 million) from the same period in 2017, primarily due to an increase in sales and marketing activities to strengthen our market position and personnel related expenses. Sales and marketing expenses for the first quarter of 2018 increased 3% from the previous quarter. Sales and marketing expenses for the first quarter of 2018 accounted for 31% of the net revenue. Excluding share-based compensation charges, Non-GAAP sales and marketing expenses for the first quarter of 2018 accounted for 31% of the net revenue, which increased from 30% for the same period in 2017 and decreased from 32% for the previous quarter.

General and administrative expenses for the first quarter of 2018 increased by 1% to RMB646 million (US$103 million) from the same period in 2017. General and administrative expenses for the first quarter of 2018 decreased 8% from the previous quarter, primarily on the back of more provision of trade and other receivables was made in previous quarter. General and administrative expenses for the first quarter of 2018 accounted for 10% of the net revenue. Excluding share-based compensation charges, Non-GAAP general and administrative expenses accounted for 8% of the net revenue, which increased from 7% for the same period in 2017 and decreased from 9% for the previous quarter.

Income from operations for the first quarter of 2018 was RMB590 million (US$95 million), compared to RMB374 million in the same period in 2017 and RMB303 million in the previous quarter. Excluding share-based compensation charges, Non-GAAP income from operations was RMB966 million (US$156 million), compared to RMB896 million in the same period in 2017 and RMB703 million in the previous quarter.

Operating margin was 9% for the first quarter of 2018, compared to 6% in the same period in 2017, and 5% in the previous quarter. Excluding share-based compensation charges, Non-GAAP operating margin was 14%, compared to 15% in the same period in 2017 and 11% in the previous quarter. 

Income tax expense for the first quarter of 2018 was RMB179 million (US$29 million), compared to RMB139 million in the same period of 2017 and RMB238 million in the previous quarter. The change in the Group's effective tax rate primarily reflects profitability changes in our subsidiaries with different tax rates, certain non-tax deductible losses including the share based compensation and fair value change in equity securities investments.

Net income attributable to Ctrip's shareholders for the first quarter of 2018 was RMB1.1 billion (US$170 million), compared to RMB52 million in the same period in 2017 and RMB350 million in the previous quarter. Excluding share-based compensation charges and fair value changes of equity securities investments, Non-GAAP net income attributable to Ctrip's shareholders was RMB2.1 billion (US$341 million), compared to RMB574 million in the same period in 2017 and RMB750 million in the previous quarter, primarily due to the net gain recognized from a number of investing activities.

Diluted earnings per ADS were RMB1.81 (US$0.29) for the first quarter of 2018. Excluding share-based compensation charges and fair value changes of equity securities investments, Non-GAAP diluted earnings per ADS were RMB3.48 (US$0.55) for the first quarter of 2018.

As of March 31, 2018, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB52.5 billion (US$8.4 billion).

ABOUT THE AUTHOR

Vicky Karantzavelou

Co-Founder & Chief Editor

Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.