Ctrip profits slide despite revenue growth
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Ctrip.com International has experienced a significant drop in its full-year profits, as spiralling costs offset higher revenues.
China’s biggest online travel company posted a net profit of CNY243 million (US$39.6m) in 2014, 76% lower than in 2013. This came despite a 36% year-on-year jump in revenues, to CNY7.3 billion, driven by a 45% increase in accommodation revenues and a 36% rise in transport ticketing turnover.
But the company’s expenses also soared in 2014, with product development costs climbing 86% and sales & marketing costs rising 74%. Ctrip attributed the rising costs to the expansion of its operations, including new personnel.
In terms of operating performance, Ctrip suffered a loss of CNY151m in 2014, compared to an operating profit of CNY838m in 2013. But Ctrip’s chairman & CEO, James Liang, said he was happy with the progress the company is making.
“In the fourth quarter of 2014, our main business lines demonstrated strong momentum,” said Liang. “Our new initiatives have propelled the expansion in our market share.
“2015 could be another exciting year. We will continue to focus on technology, service quality and efficiency, product comprehensiveness and price competitiveness, to create greater value for our customers, our partners, our employees and ultimately, our investors,” he added.
Liang also noted the rise of Ctrip’s mobile channels. The company’s mobile apps have now been downloaded a staggering 600 million times, and almost 70% of transactions were made through mobile platforms during the recent Chinese New Year holiday.
For the first quarter of 2015, Ctrip said it expects “to continue the net revenue growth year-on-year at a rate of approximately 40-50%”.
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