SOUFUN HOLDINGS LTD BEIJING, Aug. 25, 2016 /PRNewswire/ -- SouFun Holdings Limited (NYSE: SFUN) ("we," "our," or "Fang"), the leading real estate Internet portal in China, announced today its unaudited financial results for the three months ended June 30, 2016.
Second Quarter 2016 Highlights
-- Total Revenue increased by 34.2% year-on-year to $287.0 million. Revenue
from e-commerce services increased by 77.4% year-on-year to $189.5
million.
-- Operating loss was $32.8 million. Non-GAAP operating loss was $30.3
million. A description of the adjustments from GAAP to non-GAAP
operating loss is detailed in the Reconciliation Statement following
this earnings release.
-- Net loss attributable to Fang's shareholders was $40.6 million. Fully
diluted loss per ADS was $0.09.
-- Non-GAAP net loss attributable to Fang's shareholders was $39.5million.
Non-GAAP fully diluted loss per ADS was $0.08. A description of the
adjustments from GAAP to non-GAAP net loss attributable to Fang's
shareholders and fully diluted loss per ADS is detailed in the
Reconciliation Statement following this earnings release.
-- GMV increased by 68% from $6.8 billion in the second quarter of 2015 to
$11.4 billion in the second quarter. The following table shows GMV by
quarter for the periods indicated.
GMV: Q2 2016 (in millions of US dollars)
2016Q2 & 2015Q2
Variance
2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 Amount %
New Home * 1,281 3,441 4,580 5,644 3,406 3,879 438 13%
Secondary Home 384 3,321 5,951 7,860 9,311 7,482 4,161 125%
Total 1,665 6,762 10,531 13,504 12,717 11,361 4,599 68%
===== ===== ====== ====== ====== ====== ===== ===
* Only includes direct sales services.
First Half 2016 Highlights
-- Total Revenue increased by 44.6% year-on-year to $491.6 million. Revenue
from e-commerce services increased by 102.3% year-on-year to
$320.4million.
-- Operating loss was $142.8 million. Non-GAAP operating loss was $138.4
million. A description of the adjustments from GAAP to non-GAAP
operating loss is set forth below.
-- Net loss attributable to Fang's shareholders was $154.3 million. Fully
diluted loss per ADS was $0.32.
-- Non-GAAP net loss attributable to Fang's shareholders was $151.3
million. Non-GAAP fully diluted loss per ADS was $0.32. A description of
the adjustments from GAAP to non-GAAP net loss attributable to Fang's
shareholders and fully diluted loss per ADS is detailed in the
Reconciliation Statement following this earnings release.
"I am happy to announce another strong quarter with 34.2% growth rate for the top-line while at the same time put the cost under control" Vincent Mo, Chairman and CEO of Fang, commented. "Our transformation is on track with a healthier and sustainable growth path. We expect that Fang will return to high growth and profitability before the end of the year."
Second Quarter 2016 Results
Revenues
Fang reported total revenues of $287.0 million for the three months ended June 30, 2016, representing an increase of 34.2% from $213.9 million for the corresponding period in 2015, primarily driven by the growth in e-commerce services.
Revenue from e-commerce services was $189.5 million for the three months ended June 30, 2016, a 77.4% increase from $106.8 million for the same period in 2015, primarily due to the rapid growth of the real estate brokerage services for secondary home.
Revenue from marketing services was $51.4 million for the three months ended June 30, 2016, a decrease of 15.2% from $60.6 million for the corresponding period in 2015, primarily due to the offset by our e-commerce services .
Revenue from listing services was $26.9 million for the three months ended June 30, 2016, a decrease of 22.3% from $34.6 million for the corresponding period in 2015, primarily due to the increased in-house agents' usage, which has been eliminated as inter-company transaction.
Revenue from internet financial services was $11.1 million for the three months ended June 30, 2016, an increase of 176.4% from $4.0 million for the corresponding period in 2015, primarily due to rapid growth in our financial services to the real estate brokerage services.
Revenue from value-added services and other services was $8.0 million for the three months ended June 30, 2016, which is higher than the $7.8 million for the corresponding period in 2015.
Cost of Revenue
Cost of revenue was $231.1 million for the three months ended June 30, 2016, an increase of 115.9% from $107.0 million for the corresponding period in 2015. The increase in cost of revenue was mainly attributable to the cost of increased staff from the real estate brokerage services for secondary home.
Operating Expense
Operating expenses were $88.6 million for the three months ended June 30, 2016, an increase of 4.8% from $84.5 million for the corresponding period in 2015.
Selling expenses were $52.3 million for the three months ended June 30, 2016, a decrease of 4.7% from $54.8 million for the corresponding period in 2015, primarily due to decreased training fee and advertising & promotion expense.
General and administrative expenses were $36.4 million for the three months ended June 30, 2016, an increase of 22.4% from $29.7 million for the corresponding period in 2015, primarily due to increasing staff cost and operating lease.
Operating Loss/Income
Operating loss was $32.8 million for the three months ended June 30, 2016, compared to operating income of $22.3 million for the corresponding period in 2015.
Income Tax Expenses
Income tax expense was $8.7 million for the three months ended June 30, 2016, compared to income tax expenses of $10.2 million for the corresponding period in 2015.
Net Loss/Income and EPS
Net loss attributable to Fang's shareholders was $40.6 million for the three months ended June 30, 2016, compared to net income $16.2 million for the corresponding period in 2015. Loss per fully-diluted ordinary share and ADS were $0.43 and $0.09, respectively, for the three months ended June 30, 2016, compared to earnings $0.18 and $0.04 for the corresponding period in 2015.
Adjusted EBITDA
Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $24.3 million loss for the three months ended June 30, 2016, compared to income of $28.4 million for the corresponding period in 2015.
Cash
As of June 30, 2016, Fang had cash, cash equivalents, and short-term investments of $759.5 million, compared to $631.7 million as of June 30, 2015. Net cash generated from operating activities was $36.5 million for the three months ended June 30, 2016, compared to cash flow generated from operating activities of $4.1 million for the same period in 2015, primarily due to recovery of loan principal, which was $81.6 million for the three months ended June 30, 2016.
First Half 2016Results
Revenues
Fang reported total revenues of $491.6 million for the first half of 2016, representing an increase of 44.6% from $340.0 million for the corresponding period in 2015, primarily driven by the growth in e-commerce services.
Revenue from e-commerce services was $320.4 million for the first half of 2016, a 102.3% increase from $158.4 million for the same period in 2015, primarily due to the rapid growth of the real estate brokerage services for secondary home.
Revenue from marketing services was $81.8 million for the first half of 2016, a decrease of 19.1% from $101.2 million for the corresponding period in 2015, primarily due to the offset by our e-commerce services.
Revenue from listing services was $51.0 million for the first half of 2016, a decrease of 12.5% from $58.3 million for the corresponding period in 2015, primarily due to increased in-house agents' usage, which has been eliminated as inter-company transaction.
Revenue from internet financial services was $21.7 million for the first half of 2016, an increase of 187.5% from $7.6 million for the corresponding period in 2015 primarily, due to rapid growth in our financial services to the real estate brokerage services.
Revenue from value-added services and other services was $16.6 million for the first half of 2016, which is higher than the $14.5 million for the corresponding period in 2015.
Cost of Revenue
Cost of revenue was $441.0 million for the first half of 2016, an increase of 188.4% from $152.9 million for the corresponding period in 2015. The increase in cost of revenue was mainly attributable to the cost of increased staff from the real estate brokerage services for secondary home.
Operating Expenses
Operating expenses were $193.6 million for the first half of 2016, an increase of 23.1% from $157.3 million for the corresponding period in 2015.
Selling expenses were $113.9 million for the first half of 2016, an increase of 10.3% from $103.2 million for the corresponding period in 2015, primarily due to increased depreciation expense, and increased advertising and promotional expenses.
General and administrative expenses were $79.7 million for the first half of 2016, an increase of 47.4% from $54.1 million for the corresponding period in 2015, primarily due to increasing staff cost and operating lease.
Operating Loss/Income
Operating loss was $142.8 million for the first half of 2016, compared to operating income of $29.8 million for the corresponding period in 2015.
Income Tax Expenses
Income tax expense was $13.9 million for the first half of 2016, a 12.2% decrease compared to $15.8 million for the corresponding period in 2015.
Net Loss/Income and EPS
Net loss attributable to Fang's shareholders was $154.3 million for the first half of 2016, compared to net income attributable to Fang's shareholders $22.2 million for the corresponding period in 2015. Loss per fully diluted ordinary share and ADS were $1.62 and $0.32, respectively, for the first half of 2016, compared to earnings $0.25 and $0.05 for the corresponding period in 2015.
Cash
Net cash used in operating activities was $30.7 million for the first half of 2016, as compared to net cash used in operating activities of $50.7 million for the same period in 2015, primarily due to recovery of loan principal, which was $87.4 million for the six months ended June 30, 2016.
Business Outlook
Fang reiterated its total revenue guidance for 2016 of around $1,148.6 million, representing a year-on-year increase of 30.0%. We are confident that Fang is on track to achieve the target. This forecast reflects Fang's current and preliminary view, which is subject to change.
Conference Call Information
Fang's management team will host a conference call on August 25, 2016 at 8:00 AM U.S. EST (8:00 PM Beijing/Hong Kong time). The dial-in details for the live conference call are:
International Toll: +65 6713-5090
Local Toll:
United States +1 845-675-0437 /
+1 866-519-4004
Hong Kong +852 3018-6771 /
+852 800-906-601
Mainland China +86 400-620-8038 /
+86 800-819-0121
Passcode: SFUN
A telephone replay of the call will be available after the conclusion of the conference call from 11:00 ET on August 25 through 9:59 ET September 2, 2016. The dial-in details for the telephone replay are:
International Toll: +61 2-8199-0299
Toll-Free:
United States +1 855-452-5696 /+1
646-254-3697
Hong Kong +852 800-963-117 /+852
3051-2780
Mainland China +86 400-602-2065 /+86
800-870-0205
Conference ID: 67850245
A live and archived webcast of the conference call will be available on Fang's website at http://ir.fang.com
About Fang
Fang operates the leading real estate Internet portal in China in terms of the number of page views and visitors to its websites. Through our websites, we provide e-commerce, marketing, listing, financial and other value-added services for China's fast-growing real estate and home furnishing and improvement sectors. Our user-friendly websites support active online communities and networks of users seeking information on, and other value-added services for, the real estate and home furnishing and improvement sectors in China. Fang currently maintains about 100 offices to focus on local market needs and its website and database contains real estate related content covering more than 629 cities in China. For more information about Fang, please visit http://ir.fang.com.
Safe Harbor Statements
This press release 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 Fang's future financial performance, revenue guidance for 2016, growth and growth rates, and market position and continued business transformation. Statements that are not historical facts, including statements about Fang'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, without limitation, whether the transactions contemplated by the restructuring of Fang's assets and businesses will receive the requisite approvals, whether such restructuring will be carried out as planned, the impact of such restructuring on Fang's assets and businesses, the impact of Fang's transformation from a pure Internet information platform to a transaction-oriented platform, the impact of Fang's implementation of a "zero tolerance policy" that has resulted in dismissal of employees, the impact of the slowdown in China's real estate market on Fang and the impact on revenues of our existing and new service fees reductions, the ability of Fang to retain real estate listing agencies as customers during challenging economic periods, the success of Fang's new business initiatives, the ability of Fang to manage its operating expenses, the impact of, 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, economic challenges in China's real estate market, the impact of competitive market conditions for our services, our ability to maintain and increase our leadership in China's home related internet sector, the uncertain regulatory landscape in China, 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 and transactions 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, the quality of the loans we originate and resell and the performance of those loans in the future, our ability to successfully service and process customer loans for our own benefit and for the purchasers of those loans and, should we in the future make acquisitions, any failure to successfully integrate acquired businesses.
About Non-GAAP Financial Measures
To supplement Fang's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Fang uses in this press release the following measures defined as non-GAAP financial measures by the United States Securities and Exchange Commission: (1) non-GAAP operating income, (2) non-GAAP net income and (3) non-GAAP basic and diluted earnings per ordinary share and (4) adjusted EBITDA. 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.
Fang believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expenses and the related tax effects, realized gain on available-for-sale security, interest income and expenses, income tax expenses, and depreciation expense for the three months ended June 30, 2016, which (1) may not be indicative of Fang'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 Fang'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, interest income and expenses, income tax expenses, and depreciation expenses have been and will continue to be a significant recurring expense that will continue to exist in Fang'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:
Mr. Kent Cangsang Huang
CFO
Phone: +86-10-5631-9668
Email: huangcangsang@fang.com
SouFun Holdings Limited
Condensed Consolidated Balance Sheets
(in thousands of U.S. dollars, except share data and per share data)
ASSETS June 30, December 31,
======== ============
2016 2015
Current assets: (Unaudited) (Audited)
Cash and cash equivalents 642,169 817,921
Restricted cash, current 101,038 103,179
Short-term investments 16,244 62,559
Accounts receivable, net 147,600 147,516
Funds receivable 38,571 45,400
Prepayment and other current assets 49,422 60,265
Commitment deposits 9,201 10,646
Loan receivable, current 175,682 266,990
Amount due from related parties 425 262
--- ---
Total current assets 1,180,352 1,514,738
Non-current assets:
Property and equipment, net 333,459 326,504
Loan receivable, non-current 54,250 55,349
Deferred tax assets, non-current 5,143 5,490
Deposit for non-current assets 239,905 137,715
Long-term investments 232,166 244,678
Other non-current assets 7,272 10,852
----- -----
Total non-current assets 872,195 780,588
------- -------
Total assets 2,052,547 2,295,326
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term loans 82,941 100,000
Deferred revenue 170,237 145,321
Accrued expenses and other liabilities 327,072 361,593
Customers' refundable fees 66,817 59,107
Income tax payable 5,165 9,948
Convertible senior notes 398,565 400,000
------- -------
Total current liabilities 1,050,797 1,075,969
Non-current liabilities:
Convertible senior notes 288,660 287,887
Deferred tax liabilities, non-current 73,847 76,631
Other non-current liabilities 113 312
--- ---
Total non-current liabilities 362,620 364,830
------- -------
Total Liabilities 1,413,417 1,440,799
========= =========
Equity:
Class A ordinary shares, par value Hong Kong 9,132 9,110
Dollar ("HK$") 1.00 per share, 600,000,000
shares
authorized for Class A and Class B in
aggregate, and
69,461,871 shares and 70,736,697 shares
issued and
outstanding as at June 30, 2016 and December
31,
2015, respectively
Class B ordinary shares, par value HK$1.00
per 3,124 3,124
share, 600,000,000 shares authorized for
Class A
and Class B in aggregate, and 24,336,650
shares and
24,336,650 shares issued and outstanding as
at June
30, 2016 and December 31, 2015, respectively
Treasure stock (4,823) -
Additional paid-in capital 453,384 478,391
Accumulated other comprehensive loss (41,651) (10,364)
Retained earnings 219,204 373,505
------- -------
Total SouFun Holdings Limited shareholders' equity 638,370 853,766
------- -------
Noncontrolling interests 760 761
--- ---
Total equity 639,130 854,527
------- -------
TOTAL LIABILITIES AND EQUITY 2,052,547 2,295,326
========= =========
SouFun Holdings Limited
Condensed Consolidated Statements of Comprehensive Income
(in thousands of U.S. dollars, except share data and per share data)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
E-commerce services 189,514 106,831 320,418 158,373
Marketing services 51,412 60,600 81,844 101,223
Listing services 26,902 34,612 50,988 58,255
Financial services 11,104 4,018 21,729 7,558
Other value-added 8,046 7,828 16,622 14,536
services and other services
Total revenues 286,978 213,889 491,601 339,945
Cost of Revenues:
Cost of services (231,137) (107,049) (440,780) (152,858)
Total Cost of Revenues (231,137) (107,049) (440,780) (152,858)
Gross Profit 55,841 106,840 50,821 187,087
Operating expenses:
Selling expenses (52,264) (54,829) (113,861) (103,216)
General and administrative (36,359) (29,699) (79,736) (54,083)
expenses
Operating (Loss)Income (32,782) 22,312 (142,776) 29,788
Foreign exchange gain 92 85 57 71
Interest income 2,960 6,664 6,473 14,708
Interest expense (4,596) (4,123) (9,206) (8,224)
Investment income 1,355 315 1,355 315
Government grants 1,067 1,079 3,667 1,381
(Loss) Income before income (31,904) 26,332 (140,430) 38,039
taxes and noncontrolling
interests
Income tax expenses
Income tax expenses (8,698) (10,172) (13,872) (15,794)
Net (loss)income (40,602) 16,160 (154,302) 22,245
Net (loss) income (1) (6) 1 (28)
attributable to
noncontrolling
interests
Net (loss) income (40,601) 16,166 (154,303) 22,273
attributable to SouFun
Holdings Limited's
shareholders
Other comprehensive (loss)income, net of
tax
Foreign currency Translation (26,737) 4,548 (27,890) (71)
Unrealized gain on 1,386 11,858 (3,397) 14,471
available-for-sale security
Total other comprehensive (25,351) 16,406 (31,287) 14,400
income (loss), net of tax
Comprehensive income(loss) (65,952) 32,572 (185,590) 36,673
(Loss) Earnings per share for Class A and Class B ordinary
shares
Basic (0.43) 0.20 (1.62) 0.27
Diluted (0.43) 0.18 (1.62) 0.25
(Loss) Earnings per ADS
Basic (0.09) 0.04 (0.32) 0.05
Diluted (0.09) 0.04 (0.32) 0.05
Weighted average number of Class A and Class B ordinary shares outstanding:
Basic 94,816,906 82,861,457 94,980,072 82,796,866
Diluted 94,816,906 88,230,507 94,980,072 87,866,887
Weighted average number of ADSs outstanding:
Basic 474,084,530 414,307,285 474,900,360 413,984,330
Diluted 474,084,530 441,152,535 474,900,360 439,334,435
SouFun Holdings Limited
Reconciliation of GAAP and Non-GAAP Results
( in thousands of U.S. dollars, except share data and per share data)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
GAAP (loss) income (32,782) 22,312 (142,776) 29,788
from operations
Share-based 2,464 1,593 4,369 2,027
compensation expense
Non-GAAP (30,318) 23,905 (138,407) 31,815
(loss) income from
operations
GAAP net (40,602) 16,160 (154,302) 22,245
(loss) income
Withholding tax - 2,135 - 3,140
related to dividends
Investment income (1,355) (315) (1,355) (315)
Share-based 2,464 1,593 4,369 2,027
compensation expense
Non-GAAP net (39,493) 19,573 (151,288) 27,097
(loss) income
Net (loss)income (40,601) 16,166 (154,303) 22,273
attributable to
SouFun Holdings
Limited's
shareholders
Withholding tax - 2,135 - 3,140
related to dividends
Investment income (1,355) (315) (1,355) (315)
Share-based 2,464 1,593 4,369 2,027
compensation expense
Non-GAAP net (39,492) 19,579 (151,289) 27,125
(loss) income
attributable to
SouFun Holdings
Limited's
shareholders
GAAP (loss) earnings
per share for Class A
and Class B ordinary
shares:
Basic (0.43) 0.20 (1.62) 0.27
Diluted (0.43) 0.18 (1.62) 0.25
GAAP (loss) earnings
per ADS:
Basic (0.09) 0.04 (0.32) 0.05
Diluted (0.09) 0.04 (0.32) 0.05
Non-GAAP (loss) earnings
per share for Class A
and Class B ordinary
shares:
Basic (0.42) 0.24 (1.59) 0.33
Diluted (0.42) 0.22 (1.59) 0.31
Non-GAAP (loss)earnings per ADS:
Basic (0.08) 0.05 (0.32) 0.07
Diluted (0.08) 0.04 (0.32) 0.06
Weighted average
number of Class A and
Class B ordinary
shares outstanding:
Basic 94,816,906 82,861,457 94,980,072 82,796,866
Diluted 94,816,906 88,230,507 94,980,072 87,866,887
Weighted average number of ADSs outstanding:
Basic 474,084,530 414,307,285 474,900,360 413,984,330
Diluted 474,084,530 441,152,535 474,900,360 439,334,435
Three months ended Six months ended
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Non-GAAP Net (39,493) 19,573 (151,288) 27,097
(loss) income
Add back:
Interest expense 4,596 4,123 9,206 8,224
Income tax expenses 8,698 8,037 13,872 12,654
Depreciation expenses 4,906 3,356 9,208 6,429
Subtract:
Interest income (2,960) (6,664) (6,473) (14,708)
Adjusted EBITDA (24,253) 28,425 (125,475) 39,696
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SOURCE SouFun Holdings Limited
