Ctrip.com's Revenue Drops On Consecutive Quarters

Chinese Internet travel website Ctrip.com says it had total revenues of RMB367 million, representing a 47% increase from the same period in 2007 but a 4% decrease from the previous quarter, as it announced results for the quarter ended March 31, 2008.

"During the first quarter of 2008, we achieved strong financial results despite of the challenges due to weather conditions," said Min Fan, CEO of Ctrip. "We are not only gaining new customers and business, but we are also strengthening our brand recognition in the travel industry. We will continue to provide high quality service to our customers. We believe Ctrip will be able to improve its position in this promising and challenging market."

Hotel reservation revenues amounted to RMB171 million for the first quarter of 2008, representing a 28% increase from the same period in 2007 primarily due to increased hotel booking volume and a 13% decrease from the previous quarter primarily due to decreased hotel booking volume during the Chinese New Year holidays. Air-ticketing revenues for the first quarter of 2008 were RMB159 million, representing a 68% increase from the same period in 2007 and a 3% increase from the previous quarter, primarily due to increased air ticketing volume. Packaged-tour revenues for the first quarter of 2008 were RMB27 million, up 67% from the same period in 2007 and 22% from the previous quarter, primarily due to the increased leisure travel volume in the first quarter of 2008.

Gross margin was 80% in the first quarter of 2008, remaining relatively consistent with 79% in the same period in 2007 and 81% in the previous quarter. Income from operations for the first quarter of 2008 was RMB110 million, which represented a 55% increase from the same period in 2007 and a 13% decrease from the previous quarter.

Net income for the first quarter of 2008 was RMB99 million, representing a 52% increase from the same period in 2007, and a 27% decrease from the previous quarter.

The effective tax rate for the first quarter of 2008 was 28%, as compared to 16% in the same period of 2007 and 7% in the previous quarter, primarily due to the application of a statutory tax rate of 25% under the new PRC Enterprise Income Tax Law effective on January 1, 2008 and the increase of share-based compensation, which is not tax-deductible.

As of March 31, 2008, the balance of cash and short-term investment was RMB1.2 billion.