TIDMETC
RNS Number : 1464Y
Et-china.com International Holdings
28 August 2009
+-----------------------------------------+-----------------------------------------+
| For immediate release | 28 August 2009 |
+-----------------------------------------+-----------------------------------------+
ET-CHINA.COM INTERNATIONAL HOLDINGS LIMITED
("Et-china", "the Group" or "the Company")
Interim results for the six months ended 30 June 2009
Et-china, a leading travel services group in the fast growing region of South
China, announces its unaudited interim results for the six months ended 30 June
2009.
Highlights:
+---------------+---------+---------+------+----------------------+
| | 6 months to 30 | % | 6 months to 30 June |
| | June 2009 | | 2008 |
+---------------+-------------------+------+----------------------+
| | RMB | GBP* | | RMB million |
| | million | | | |
+---------------+---------+---------+------+----------------------+
| Revenue | 840.3 | 74.1 | 8.2 | 776.7 |
+---------------+---------+---------+------+----------------------+
| Gross Profit | 97.2 | 8.6 | 14.1 | 85.2 |
+---------------+---------+---------+------+----------------------+
| Operating | (9.1) | (0.8) | 56 | (20.7) |
| Profit/(Loss) | | | | |
+---------------+---------+---------+------+----------------------+
| Profit / | (4.9) | (0.4) | 78.6 | (22.7) |
| (Loss) | | | | |
| After tax | | | | |
| and MI | | | | |
+---------------+---------+---------+------+----------------------+
*figures in Sterling are for illustrative purposes only, all translated using
the RMB exchange rate of 11.3 RMB = GBP1
+---+--------------------------------------------------------------------+
|? | Net revenues up 8.2% to RMB 840 million (2008: RMB 776.7 million) |
+---+--------------------------------------------------------------------+
|? | Gross profit up 14.1% to RMB 97.2 million (2008: 85.2 million) |
+---+--------------------------------------------------------------------+
|? | Gross margin 11.6% (2008: 10.9%) |
+---+--------------------------------------------------------------------+
|? | Loss after tax reduced by 79% to RMB 4.9 million (2008 Loss: RMB |
| | 22.7) |
+---+--------------------------------------------------------------------+
Matthew Ng, President and Chief Executive Officer, commented:
"The Board is optimistic that the Group will see an improved performance in the
second half and has great confidence that the outlook for the Chinese travel
sector remains highly attractive. Looking to 2010 we expect to benefit from
increased volumes of travel surrounding the Shanghai World Expo, which runs from
May to October and the Guangzhou Asian Games in November 2010.
The relative stability of the domestic economy is helping to rebuild consumer
confidence in China which will benefit the travel market significantly. The
Group is committed to growing the business and driving improved revenue growth
and profitability.
We are also very pleased to welcome Maria Ng to the Board. Maria has a wealth of
experience in the Asia Pacific travel industry through her time with Kouni and
we look forward to cultivating closer links with Kuoni in the coming period."
Contact details for enquiries
+--------------------------------------------+---------------------------+
| Et-china.com International Holdings | 020 7067 0700 |
| Limited | |
+--------------------------------------------+---------------------------+
| Matthew Ng, Chief Executive Officer | |
+--------------------------------------------+---------------------------+
| | |
+--------------------------------------------+---------------------------+
| Seymour Pierce, Nomad and Broker | 020 7107 8000 |
+--------------------------------------------+---------------------------+
| Mark Percy | |
+--------------------------------------------+---------------------------+
| Catherine Leftley | |
+--------------------------------------------+---------------------------+
| | |
+--------------------------------------------+---------------------------+
| Weber Shandwick Financial | 020 7067 0700 |
+--------------------------------------------+---------------------------+
| Terry Garrett | |
+--------------------------------------------+---------------------------+
| Stephanie Badjonat | |
+--------------------------------------------+---------------------------+
| John Moriarty | |
+--------------------------------------------+---------------------------+
Chairman's Statement
Results
I am pleased to report that the Group has continued to make good progress in
developing its business during the six months to 30 June 2009. We have
consolidated our position as the travel services market leader in Southern China
in terms of revenue and we have made great strides in increasing our national
presence. Recent government figures from CNTA (China National Tourism
Administration) confirm this with the Group's tour operator business,
GZL, ranked as the 5th largest travel operator in the whole of China, 4th for
outbound and 6th for domestic travel.
The first half of 2009 began strongly with a substantial increase in trading
over the 'Chinese New Year' 7 day holiday period. Both GZL, the Group's package
tour provider and ETC, the FIT (Frequent Independent Traveler) business, saw
steady progress in sales. The second quarter of the period saw a considerable
reduction in the number of outbound trips sold, mainly due concerns over H1N1
(swine flu) and uncertainty over the pace of the recovery of the Chinese
economy.
The acquisition of Yoee.com during the period has transformed Et-china's FIT
business into a national operator and propelled the Group into the top 3 online
travel providers in China. Yoee.com has now become an integral part of Et-china
and the combined business has increased FIT revenues while margins have improved
due to the ongoing integration. Management aims to improve margins as it
implements further reductions to the cost base in the second half.
Most significantly the Group achieved continuing revenue growth of around 8% and
substantially reduced its reporting loss during the period. This
reflected continued profits from both GZL and the e-JV with China Southern
Airlines, as well as a 31% reduction in the losses attributable to the Group's
Frequent Independent Traveler business.
Stated revenue for the six months to 30 June 2009 rose over 8% to RMB 840.3
million (GBP74.1 million) from RMB 776.7 million in the same period of 2008.
Gross operating profit was RMB 97.2 million (GBP8.6 million) (2008: RMB 85.2
million), up by 14.1%. The Group reduced losses by 78.6%, recording a loss after
tax and minority interest of RMB 4.8m (GBP0.4 million) (2008: Loss RMB 22.7
million).
Within GZL, the strongest growth in revenue came from e-commerce activities
which achieved a 25% rise in revenue to RMB 51.6 million (2008: RMB 41.5
million). Domestic travel sales increased by 10% to RMB 271.2 million (2008: RMB
246.9 million) and Outbound travel saw growth of just over 8% to RMB 447.5
million (2008: 414.3 million). These figures reflect the continuing appetite for
travel amongst Chinese nationals as the economy stabilizes. A further example of
this is the enormous increase in the volume of travelers to Taiwan where numbers
of mainland tourists for the first half of 2009 are nearly triple that of the
whole of 2008.
Turning to our FIT division, Et-china saw a 31% reduction in revenues to RMB
15.1 million, which was mainly due to the discontinuation of group tours within
ETC FIT. However, the division showed continued margin improvement to around
45% as management closely controlled costs over the period.
The Group's e-ticketing joint-venture grew revenues to RMB 21.3 million (2008:
RMB 14.9 million) an increase of 43% as the division saw a 55% rise in B2B
customers.
In June we announced that Kuoni Travel Holding Limited ('Kuoni'), one of the
largest global leisure travel companies had acquired a 31.8% stake in the Group.
Consequently we have appointed Yuk-Yin Maria Ng (Maria) as a Non-Executive
Director. Maria is currently Managing Director of Kuoni Travel (China) Limited
and brings with her a wealth of experience in the Asia Pacific travel industry
which will help Et-china develop and grow. Management intends to cultivate
closer links with Kuoni and has arranged for senior management to visit Kuoni's
headquarters in Zurich to establish a collaborative marketing strategy for the
region.
Outlook
We have seen an improved performance from our Domestic travel operations with
revenues growing by 29% in July of 2009 and we look forward to 'Golden Week' (1
- 8 October) which is expected to continue to show an increase in the number of
people travelling. We also expect to see a recovery in Outbound travel,
following a perceived reduction in the threat from H1NI, in the fourth quarter
and anticipate a resumption in growth from Et-china FIT as marketing spend is
increased and the benefits of a significant system integration and upgrade bear
fruit.
The Board is optimistic that the Group will see an improved performance in the
second half and has great confidence that the outlook for the Chinese travel
sector remains highly attractive. Looking to 2010 we expect to benefit from
increased volumes of travel surrounding the Shanghai World Expo, which runs from
May to October and the Guangzhou Asian Games in November 2010.
The relative stability of the domestic economy is helping to rebuild consumer
confidence in China which will benefit the travel market significantly The Group
is committed to growing the business and driving improved revenue growth and
reducing losses.
Matthew Ng
Chairman
28 August 2009
Consolidated income statement
for the half year ended 30 June 2009
+------------------------------------+---+---------------+--+-----------------+
| | | Six months | | Six months |
| | | ended 30 June | | ended 30 June |
| | | 2009 | | 2008 |
+------------------------------------+---+---------------+--+-----------------+
| | | RMB'000 | | RMB'000 |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Revenue | | 840,253 | | 776,703 |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Direct operating costs | | (743,076) | | (691,509) |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Gross profit | | 97,177 | | 85,194 |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Other operating income | | (948) | | 2,681 |
+------------------------------------+---+---------------+--+-----------------+
| Selling, general and | | (105,374) | | (108,585) |
| administrative expenses | | | | |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Net change in fair value of | | | | |
| redemption | | | | |
+------------------------------------+---+---------------+--+-----------------+
| option of convertible loan notes | | - | | - |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Result from operating activities | | (9,144) | | (20,710) |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Finance income | | 23,850 | | 1,948 |
+------------------------------------+---+---------------+--+-----------------+
| Finance expense | | (3,771) | | (1,124) |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Net finance income/ (expense) | | 20,079 | | 824 |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Share of profit of associates, | | | | |
+------------------------------------+---+---------------+--+-----------------+
| net of income tax expense | | - | | - |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Profit/(loss) before income tax | | 10,935 | | (19,886) |
| expense | | | | |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Income tax expense | | (6,005) | | (369) |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Profit/(loss) for the year | | 4,929 | | (20,255) |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Minority interests | | 9,788 | | 2,436 |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| Net loss for the year | | (4,859) | | (22,691) |
+------------------------------------+---+---------------+--+-----------------+
| | | | | |
+------------------------------------+---+---------------+--+-----------------+
| (Loss) per share (RMB) | | (0.14) | | (0.69) |
+------------------------------------+---+---------------+--+-----------------+
Consolidated balance sheet
As at 30 June 2009
+----+----------------------------------+--+---------------+--------+--+---------------+
| | | As at 30 June 2009 | | As at 30 June |
| | | | | 2008 |
+---------------------------------------+--+------------------------+--+---------------+
| | | | RMB'000 | | RMB'000 |
+----+----------------------------------+--+---------------+-----------+---------------+
| Assets | | | | |
+---------------------------------------+--+---------------+-----------+---------------+
| | Property, plant and equipment | | 50,513 | | 58,768 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Intangible assets | | 46,966 | | 46,472 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Investment properties | | 7,256 | | 7,973 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Investment in associates | | 4,046 | | 12,280 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Other investment | | 70,029 | | 59,712 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Lease prepayments | | 27,433 | | 28,207 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Total non-current assets | | 206,243 | | 213,412 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Inventories | | 19,488 | | 20,152 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Trade receivables | | 86,320 | | 77,955 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Deposits, prepayments | | | | |
+----+----------------------------------+--+---------------+-----------+---------------+
| | and other receivables | | 89,295 | | 90,266 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Fair value of foreign | | | | |
+----+----------------------------------+--+---------------+-----------+---------------+
| | exchange forward contracts | | - | | - |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Tax recoverable | | 187 | | 1,711 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Amounts due from a director | | 294 | | 840 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Pledged deposits | | 21,882 | | 57,010 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Cash and cash equivalents | | 305,717 | | 233,869 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+-----------+---------------+
| | Total current assets | | 523,183 | | 481,803 |
+----+----------------------------------+--+---------------+-----------+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+-----------+---------------+
| Total assets | | 729,426 | | 695,215 |
+---------------------------------------+--+---------------+-----------+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+-----------+---------------+
| Equity | | | | |
+---------------------------------------+--+------------------------+--+---------------+
| | Share capital | | - | | - |
+----+----------------------------------+--+------------------------+--+---------------+
| | Share premium | | 192,508 | | 192,508 |
+----+----------------------------------+--+------------------------+--+---------------+
| | Other reserves | | 139,533 | | 104,945 |
+----+----------------------------------+--+------------------------+--+---------------+
| | Accumulated losses | | (247,055) | | (201,398) |
+----+----------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | Total equity attributable | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | to equity holders of the | | 84,985 | | 96,056 |
| | Company | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | Minority interests | | 74,831 | | 75,421 |
+----+----------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| Total equity | | 159,816 | | 171,477 |
+---------------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| Liabilities | | | | |
+---------------------------------------+--+------------------------+--+---------------+
| | Deferred income | | - | | - |
+----+----------------------------------+--+------------------------+--+---------------+
| | Deferred tax liabilities | | 27,755 | | 26,980 |
+----+----------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | Total non-current liabilities | | 27,755 | | 26,980 |
+----+----------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | Trade payables | | 110,682 | | 102,256 |
+----+----------------------------------+--+------------------------+--+---------------+
| | Accrued expenses and other | | 186,740 | | 250,640 |
| | payables | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | Fair value of foreign | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | exchange forward contracts | | - | | - |
+----+----------------------------------+--+------------------------+--+---------------+
| | Amounts due to directors | | - | | 2,776 |
+----+----------------------------------+--+------------------------+--+---------------+
| | Loans and borrowings | | 244,433 | | 141,086 |
+----+----------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| | Total current liabilities | | 541,855 | | 496,758 |
+----+----------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| Total liabilities | | 569,610 | | 523,738 |
+---------------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+------------------------+--+---------------+
| Total equity and liabilities | | 729,426 | | 695,215 |
+---------------------------------------+--+------------------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--------+--+---------------+
Consolidated cash flow statement
for the half year ended 30 June 2009
+----+----------------------------------+--+---------------+--+---------------+
| | | Six months | | Six months |
| | | ended 30 June | | ended 30 June |
| | | 2009 | | 2008 |
+---------------------------------------+--+---------------+--+---------------+
| | | | RMB'000 | | RMB'000 |
+----+----------------------------------+--+---------------+--+---------------+
| Cash flows from operating activities | | | | |
+---------------------------------------+--+---------------+--+---------------+
| | Net loss for the year | | (4,859) | | (22,691) |
+----+----------------------------------+--+---------------+--+---------------+
| | Depreciation | | 3,518 | | 4,753 |
+----+----------------------------------+--+---------------+--+---------------+
| | Amortisation of Intangible | | 101 | | (3,648) |
| | assets | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | Increase / (decrease) in net | | 75,072 | | (11,697) |
| | working capital | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | Net cash generated from/(used | | | | |
| | in) | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | operating activities | | 73,832 | | (33,283) |
+----+----------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| Cash flows from investing activities | | | | |
+---------------------------------------+--+---------------+--+---------------+
| | Acqusition of fixed assets and | | 2,863 | | (754) |
| | intangible assets | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | Investment | | (27,781) | | 19,667 |
+----+----------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | Cash flows from investing | | (24,918) | | 18,913 |
| | activities | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| Cash flows from financing activities | | | | |
+---------------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | Short term loan | | 12,692 | | 7,201 |
+----+----------------------------------+--+---------------+--+---------------+
| | Long-term loan | | 67,389 | | 70,121 |
+----+----------------------------------+--+---------------+--+---------------+
| | Capital Contribution | | (8,631) | | (16,725) |
+----+----------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| | Total current liabilities | | 71,450 | | 60,597 |
+----+----------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| Net Increase in cash | | 120,364 | | 46,227 |
+---------------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| Cash at start of period | | 185,353 | | 187,642 |
+---------------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
| Cash at end of the period | | 305,717 | | 233,869 |
+---------------------------------------+--+---------------+--+---------------+
| | | | | | |
+----+----------------------------------+--+---------------+--+---------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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