SouFun Announces Fourth Quarter and Fiscal Year 2012 Results
SouFun Announces Fourth Quarter and Fiscal Year 2012 Results
PR Newswire
BEIJING, Feb. 8, 2013
BEIJING, Feb. 8, 2013 /PRNewswire/ -- SouFun Holdings Limited (NYSE: SFUN)
("SouFun"), the leading real estate Internet portal and a leading home
furnishing website in China, announced today its unaudited financial results
for the fourth quarter and fiscal year ended December 31, 2012. (Amounts are
in US dollars, unless otherwise specified.)
Fourth Quarter 2012 Highlights
Revenue in the fourth quarter of 2012 was $147.5 million, a 29.6% increase
from the corresponding period in 2011.
Operating income in the fourth quarter of 2012 was $71.6 million, a 52.8%
increase from the corresponding period in 2011. Non-GAAP operating income in
the fourth quarter of 2012 was $74.8 million, a 53.5% increase from the
corresponding period in 2011.
Net income attributable to shareholders recorded a year-over-year increase of
85.3% to $55.8 million, or $0.68 per fully diluted share. Non-GAAP net income
attributable to shareholders recorded a year-over-year increase of 66.0% to
$65.1 million, or $0.79 per fully diluted share.
Fiscal Year 2012 Highlights
Revenue in 2012 was $430.3 million, a 25.1% increase from 2011.
Operating income in 2012 was $198.6 million, a 41.4% increase from 2011.
Non-GAAP operating income in 2012 was $205.7 million, a 39.4% increase from
2011.
Net income attributable to shareholders recorded a year-over-year increase of
49.4% to $151.8 million, or $1.85 per fully diluted share. Non-GAAP net income
attributable to shareholders recorded a year-over-year increase of 40.6% to
$174.2 million, or $2.13 per fully diluted share.
"Again we delivered strong results for the fourth quarter and the whole year,
despite tough market conditions we experienced in the first half of the year,"
said Vincent Mo, Executive Chairman of SouFun. "Our unwavering focus on
SouFun's existing marketing services and its derivative, SouFun membership
services, and our listing services allowed us to build a solid foundation to
grow our business. Our ability to continuously innovate and successfully
create new services, such as SouFun membership services and SouFun Online
Shop, will enable SouFun to capture new growth opportunities and enhance its
leadership in China's home related internet sector. We are confident that we
will continue to grow at a healthy pace in both top-line and bottom-line in
2013."
Fourth Quarter 2012 Results
SouFun reported total revenue of $147.5 million for the fourth quarter of
2012, representing an increase of 29.6% from the corresponding period in 2011,
primarily driven by the growth in SouFun membership services and listing
services.
Revenue from marketing services was $80.2 million for the fourth quarter of
2012, a slight increase of 1.0% from the corresponding period in 2011,
reversing the decreasing trend experienced during the previous two quarters of
2012.
Revenue from e-commerce services was $40.1 million for the fourth quarter of
2012, a substantial increase from $10.0 million for the same period in 2011
due to the increasing market acceptance of the SouFun membership services. We
began offering paid SouFun membership services to property buyers to
facilitate their transactions with property developers in the second quarter
of 2011.
Revenue from listing services was $26.1 million for the fourth quarter of
2012, an increase of 19.8% from the corresponding period in 2011, primarily
due to the general recovery in the secondary real estate market during the
second half of the year and new revenue from SouFun Online Shop which has been
tested mainly in ten major cities in China, including Beijing and Shanghai.
Revenue from other value-added services was $1.1 million for the fourth
quarter of 2012, a decrease of 58.1% from the corresponding period in 2011,
primarily due to our increased focus on the core marketing and listing
services.
Cost of revenue was $25.3 million for the fourth quarter of 2012, an increase
of 49.3% from the corresponding period in 2011, primarily due to the increase
in staff cost and the expanded implementation of the value-added tax system in
China, which results in higher taxes than the traditional business tax due to
our cost structure.
Gross margin was 82.8% for the fourth quarter of 2012, a slight decrease from
85.1% for the corresponding period in 2011. The slight decrease was primarily
due to the expanded implementation of the value-added tax system during 2012.
Operating expenses were $50.6 million for the fourth quarter of 2012, an
increase of 1.1% from the corresponding period in 2011.
Selling expenses were $27.8 million for the fourth quarter of 2012, an
increase of 33.9% from the corresponding period in 2011 due primarily to
increased staff cost and marketing and promotional expenses along with our
business expansion.
General and administrative expenses were $22.8 million for the fourth quarter
of 2012, a decrease of 22.1% from the corresponding period in 2011 due
primarily to a decrease in bad debt expense.
Operating income was $71.6 million for the fourth quarter of 2012, an increase
of 52.8% from the corresponding period in 2011. Non-GAAP operating income was
$74.8 million, an increase of 53.5% from the corresponding period in 2011.
Income tax expense was $16.3 million for the fourth quarter of 2012, an
increase of 21.4% as compared to $13.4 million for the corresponding period in
2011, primarily driven by the growth in taxable earnings.
Net income attributable to shareholders was $55.8 million for the fourth
quarter of 2012, an increase of 85.3% from the corresponding period in 2011,
due primarily to the top-line growth and the decrease in bad debt expenses,
partially offset by the increase in staff costs and taxes. Fully diluted
earnings per share was $0.68 for the fourth quarter of 2012, a 83.8% increase
as compared to $0.37 for the corresponding period in 2011. Non-GAAP net income
attributable to shareholders was $65.1 million for the fourth quarter of 2012,
an increase of 66.0% from the corresponding period in 2011. Non-GAAP fully
diluted earnings per share was $0.79 for the fourth quarter of 2012, a 61.2%
increase as compared to $0.49 for the corresponding period in 2011.
As of December 31, 2012, SouFun had cash, cash equivalents, and short-term
investments (excluding the available-for-sale securities) of $143.6 million,
compared to $158.3 million as of December 31, 2011. This reflected the payment
of $131.0 million in cash dividend to shareholders in 2012 and prepayment of
$111.4 million to acquire a portion of the BaoAn Building in Shanghai to
support our expansion in Shanghai and East China area. The acquisition is
expected to be completed in the first quarter of 2013. Cash flow from
operating activities was $94.2 million for the fourth quarter of 2012, a
102.1% increase as compared to US$46.6 million for the same period of 2011.
Fiscal Year 2012 Results
SouFun reported total revenue of $430.3 million for 2012, representing an
increase of 25.1% from 2011, primarily driven by the growth in SouFun
membership services and listing services.
Revenue from marketing services was $249.9 million for 2012, a slight
increase of 1.3% from 2011.
Revenue from e-commerce services was $102.2 million for 2012, a substantial
increase from $24.2 million for 2011 due to the increasing market acceptance
of the SouFun membership services. We began offering paid SouFun membership
services to property buyers to facilitate their transactions with property
developers in the second quarter of 2011.
Revenue from listing services was $72.9 million for 2012, an increase of 8.6%
from 2011, primarily due to the general recovery in the secondary real estate
market during the second half of the year and new revenue from SouFun Online
Shop which has been tested mainly in ten major cities in China, including
Beijing and Shanghai.
Revenue from other value-added services was $5.4 million for 2012, a decrease
of 9.1% from 2011, primarily due to our increased focus on our core marketing
and listing services.
Cost of revenue was $80.9 million for 2012, an increase of 21.5% from 2011.
Gross margin was 81.2% for 2012, slightly improved from 80.6% in 2011.
Operating expenses totaled $150.8 million for 2012, an increase of 10.2% from
2011.
Selling expenses totaled $80.1 million for 2012, an increase of 19.1% from
2011 due primarily to increased staff cost.
General and administrative expenses totaled $70.8 million for 2012, a slight
increase of 1.7% from 2011. The small increase was primarily due to an
increase in staff cost, which was substantially offset by a decrease in bad
debt expense.
Operating income was $198.6 million for 2012, an increase of 41.4% from 2011.
Non-GAAP operating income was $205.7 million, an increase of 39.4% from 2011.
Income tax expense was $55.9 million for 2012, an increase of 31.2% compared
to $42.6 million for 2011, while the effective tax rate decreased 2.7% to
26.9% from 29.6%. The decrease in effective tax rate was due to greater profit
contribution by two subsidiaries with tax exemption status in 2012 and the
reversal of previously accrued income taxes totaling $1.6 million resulting
from the change in the tax status of these two subsidiaries in 2012.
Net income attributable to shareholders was $151.8 million for 2012, an
increase of 49.4% from 2011. Fully diluted earnings per share was $1.85 for
2012, a 49.2% increase as compared to $1.24 for 2011. Non-GAAP net income
attributable to shareholders was $174.2 million for 2012, an increase of 40.6%
from 2011. Non-GAAP fully diluted earnings per share was $2.13 for 2012, a
41.1% increase as compared to $1.51 for 2011.
Cash flow from operating activities was $218.9 million for 2012, a 41.0%
increase as compared to $155.3 million for 2011.
Business Outlook
SouFun estimates its total revenue for 2013 to be around $520.0 million,
representing a year-on-year increase of 20.0% to 22.5%. This forecast reflects
SouFun's current and preliminary view, which is subject to change.
Notes regarding Unaudited Financial Information
The unaudited financial information disclosed in this press release is
preliminary. The audit of the financial statements and related notes to be
included in the Company's annual report on Form 20-F for the year ended
December 31, 2012 is still in progress. Adjustments to the financial
statements could be identified upon completion of the audit work. Such
adjustments could result in differences, some of which could be significant,
between the Company's audited financial statements and this preliminary
unaudited financial information included in this release.
Conference Call Information
SouFun' management team will host a conference call on February 8, 2013 at 8
a.m. U.S. Eastern Standard Time (9 p.m. Beijing/Hong Kong time).
The dial-in details for the live conference call are:
US: +1 718 354 1231/ 1 866 519 4004
International: +65 6723 9381
Hong Kong: +852 2475 0994 /800 930 346
Mainland China: 800 819 0121 / 400 620 8038
Passcode: SFUN
Please dial in 10 minutes before the call is scheduled to begin and provide
the passcode to join the call.
A telephone replay of the call will be available after the conclusion of the
conference call at 11:00 a.m. U.S. EST on February 8 through February 15,
2013. The dial-in details for the telephone replay are:
International: +61 2 8199 0299
US Toll Free: 1855 452 5696
US Toll: +1 646 254 3697
Conference ID #: 94996321
A live and archived webcast of the conference call will be available on
SouFun's website at http://ir.soufun.com.
About SouFun
SouFun operates the leading real estate Internet portal and a leading home
furnishing and improvement website in China. Through its main website,
www.soufun.com, SouFun offers comprehensive real estate and home furnishing
and improvement information to its large and active community of users and
provides advertising and listing services for real estate developers and
brokers. SouFun currently maintains 106 offices to support local market needs
and its website and database contains real estate-related content covering 323
cities in China. For more information about SouFun, please visit
http://ir.soufun.com.
Safe Harbor Statements
This announcement contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements
are made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology such as
"will," "expects," "is expected to," "anticipates," "aim," "future,"
"intends," "plans," "believes," "are likely to," "estimates," "may," "should"
and similar expressions. Such forward-looking statements include, without
limitation, statements regarding the outlook for the fiscal year of 2013 and
comments by management in this release about SouFun's strategic and
operational plans and focus, current and future market positions, future
growth and growth momentum of existing and recently introduced services,
ability to continue to innovate and introduce new services, completion of the
acquisition, and about China's real estate and home furnishings market. SouFun
may also make forward-looking statements in our periodic reports to the U.S.
Securities and Exchange Commission, in press releases and other written
materials and in oral statements made by our officers, directors or employees
to third parties. Statements that are not historical facts, including
statements about SouFun's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties. A number of important factors could cause actual results to
differ materially from those contained in any forward-looking statement.
Potential risks and uncertainties include, but are not limited to, SouFun's
limited operating history, the current global financial and credit markets
crisis and its potential impact on the Chinese economy, measures taken or to
be taken by the Chinese government to control real estate growth and prices
and other events which could occur in the future, challenges in China's real
estate market, the impact of competitive market conditions for our services
and our ability to maintain and increase our leadership in China's home
related internet sector, the uncertain regulatory landscape in China,
completion of the audited financial statements for fiscal 2012, fluctuations
in our quarterly operating results, our continued ability to execute business
strategies including our SouFun membership services and SouFun Online Shop,
our ability to continue to expand in local markets, our reliance on online
advertising sales and listing services for our revenues, any failure to
successfully develop and expand our content, service offerings and features,
including the success of new features to meet evolving market needs, and the
technologies that support them, and, should we in the future make
acquisitions, any failure to successfully integrate acquired businesses.
Further information regarding these and other risks and uncertainties is
included in our annual report on form 20-F and other documents filed with the
U.S. Securities and Exchange Commission. SouFun does not assume any obligation
to update any forward-looking statements in this release and elsewhere, which
apply only as of the date of this press release.
About Non-GAAP Financial Measures
To supplement SouFun's consolidated financial results presented in accordance
with United States Generally Accepted Accounting Principles ("GAAP"), SouFun
uses in this press release the following measures defined as non-GAAP
financial measures by the United States Securities and Exchange Commission:
(1) operating income, (2) net income and (3) basic and diluted earnings per
ordinary share. The presentation of the non-GAAP financial information is not
intended to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP. For more
information on these non-GAAP financial measures, please see the table
captioned "Reconciliation of GAAP and non-GAAP Results" set forth at the end
of this press release.
SouFun believes that these non-GAAP financial measures provide meaningful
supplemental information to investors regarding its operating performance by
excluding share-based compensation expenses, which (1) may not be indicative
of SouFun's recurring core business operating results or (2) are not expected
to result in future cash payments. These non-GAAP financial measures also
facilitate management's internal comparisons to SouFun's historical
performance and assist its financial and operational decision making. A
limitation of using these non-GAAP financial measures is that share-based
compensation has been and will continue to be a significant recurring expense
that will continue to exist in SouFun's business for the foreseeable future.
Management compensates for these limitations by providing specific information
regarding the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables have more details on the reconciliation between non-GAAP
financial measures and their most directly comparable GAAP financial measures.
For investor and media inquiries, please contact:
Dr. Hua Lei
IR Director
Tel: +86 (10) 5631 8661
E-mail: Leihua@soufun.com
Jing Wang
IR Manager
Tel: +86 (10) 5631 8660
E-mail: Bj.wangjing@soufun.com
SouFun Holdings Limited
Condensed Consolidated Balance Sheet
( in U.S. dollars in thousands )
ASSETS December 31, December 31,
2012 2011
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents 118,167 150,414
Restricted cash, current - 35,814
Short-term investments 26,841 8,592
Accounts receivable, net 30,029 27,697
Funds receivable 7,600 -
Prepayment and other current assets 9,226 9,695
Loans receivable - 26,143
Amounts due from a related party - 1,595
Deferred tax assets, current 2,734 1,602
Total current assets 194,597 261,552
Non-current assets:
Property and equipment, net 79,564 68,064
Restricted cash, non-current 391,416 247,631
Deferred tax assets, non current 1,723 1,407
Deposit for non-current assets 8,750 -
Prepayment for business acquisition 111,367 -
Other non-current assets 13,744 1,717
Total non-current assets 606,564 318,819
Total assets 801,161 580,371
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term loans 270,670 255,570
Deferred revenue 65,871 61,208
Accrued expenses and other liabilities 89,306 52,490
Dividend payable - 51,969
Income tax payable 23,659 16,158
Customers' refundable fees 18,449 12,412
Total current liabilities 467,955 449,807
Non-current liabilities:
Long-term loans 80,750 -
Deferred tax liabilities, non-current 64,947 38,581
Total non-current liabilities 145,697 38,581
Total Liabilities 613,652 488,388
Shareholders' equity:
Class A and Class B Ordinary shares (par value of
HK$1 per share: 600,000,000 total shares
authorized;
78,150,568 (Class A-53,813,918 and Class
B-24,336,650 ) with aggregated par value of
US$10,032
(Class A-US$6,908 and Class B-US$3,124) and
80,350,385 (Class A-56,013,735 and Class B
24,336,650 ) with aggregated par value of
US$10,316 10,316 10,032
(Class A-US$7,191 and Class B-US$3,125) shares
issued and outstanding as of December 31, 2011
and
December 31, 2012))
Additional paid-in capital 69,637 49,838
Accumulated other comprehensive income 23,974 21,853
Retained earnings 82,952 10,185
Total SouFun Holdings Limited shareholders' equity 186,879 91,908
Noncontrolling interests 630 75
Total shareholders' equity 187,509 91,983
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 801,161 580,371
SouFun Holdings Limited
Condensed Consolidated Statements of Comprehensive Income
( in U.S. dollars in thousands, except share data and per ADS data )
Three months ended Twelve months ended
December 31, December 31, December 31, December
31,
2012 2011 2012 2011
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Marketing services 80,234 79,433 249,861 246,634
E-commerce services 40,111 10,030 102,162 24,170
Listing services 26,092 21,778 72,874 67,125
Other value-added
1,100 2,624 5,361 5,897
services
Total revenues 147,537 113,865 430,258 343,826
Cost of Revenues:
Cost of services (25,314) (16,959) (80,863) (66,571)
Total Cost of Revenues (25,314) (16,959) (80,863) (66,571)
Gross Profit 122,223 96,906 349,395 277,255
Operating expenses:
Selling expenses (27,815) (20,770) (80,056) (67,207)
General and
(22,800) (29,286) (70,780) (69,611)
administrative
expenses
Total Operating (50,615) (50,056) (150,836) (136,818)
Expenses
Operating Income 71,608 46,850 198,559 140,437
Foreign exchange
gain 12 (1) 90 1
(loss)
Interest income 5,455 3,609 19,406 10,483
Interest expense (5,199) (2,912) (11,630) (4,026)
Realized
gain-trading - 11 - 263
securities
Government grants 194 308 1,298 1,399
Other-than-temporary
impairment on
- (4,343) (14) (4,343)
available-for-sale
securities
Income before income
taxes and 72,070 43,522 207,709 144,214
noncontrolling
interests
Income tax expenses
Income tax expense (16,310) (13,430) (55,905) (42,617)
Net income 55,760 30,092 151,804 101,597
Net (loss)
attributable
(6) (8) (6)
to noncontrolling (28)
interests
Net income
attributable 55,766 30,100 151,810
to SouFun Holdings 101,625
Limited shareholders
Other comprehensive
income, net of tax
Foreign currency
3,823 1,599 1,378 10,839
translation
Reclassification
adjustment for - 3,506 - 721
loss included in net
income
Unrealized losses on
available-for-sale 43 - 743 -
security
Total other
comprehensive income, 3,866 5,105 2,121 11,560
net of tax
Comprehensive income 59,626 35,198 153,925 113,157
Earnings per share for
Class A and Class B
ordinary shares
Basic 0.72 0.39 1.96 1.33
Diluted 0.68 0.37 1.85 1.24
Weighted average
number of Class A and
Class B ordinary
shares outstanding:
Basic 77,555,412 76,854,946 77,365,156 76,492,272
Diluted 82,433,256 81,105,017 81,924,565 82,215,832
SouFun Holdings Limited
Reconciliation of GAAP and Non-GAAP Results
( in U.S. dollars in thousands, except share data and per share data)
Three months ended Twelve months ended
December 31, December 31, December 31, December 31,
2012 2011 2012 2011
GAAP income from operations 71,608 46,850 198,559 140,437
Share-based compensation 3,153 1,869 7,149 7,170
Non-GAAP income from operations 74,761 48,719 205,708 147,607
GAAP net income 55,760 30,092 151,804 101,597
One-off tax benefit - (7,645) (1,631) (7,645)
Withholding tax related to dividends 6,196 10,557 16,867 18,414
Other-than-temporary impairment on - 4,343 14 4,343
available-for-sale securities
Share-based compensation 3,153 1,869 7,149 7,170
Non-GAAP net income 65,109 39,216 174,203 123,879
Net Income attributable to
SouFun Holdings Limited shareholders 55,766 30,100 151,810 101,625
One-off tax benefit - (7,645) (1,631) (7,645)
Withholding tax related to dividends 6,196 10,557 16,867 18,414
Other-than-temporary impairment on - 4,343 14 4,343
available-for-sale securities
Share-based compensation expense 3,153 1,869 7,149 7,170
Non-GAAP net Income attributable to 65,115 39,224 174,209 123,907
SouFun Holdings Limited shareholders
GAAP earnings per share for Class A
and Class B ordinary shares:
Basic 0.72 0.39 1.96 1.33
Diluted 0.68 0.37 1.85 1.24
Non-GAAP earnings per share for
Class A and Class B ordinary shares:
Basic 0.84 0.51 2.25 1.62
Diluted 0.79 0.49 2.13 1.51
Weighted average number of Class A
and Class B ordinary shares
outstanding:
Basic 77,555,412 76,854,946 77,365,156 76,492,272
Diluted 82,433,256 81,105,017 81,924,565 82,215,832
SOURCE SouFun Holdings Limited
Website: http://www.soufun.com
Website: http://ir.soufun.com
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