BEIJING, Aug. 8, 2013 /PRNewswire/ -- SouFun Holdings Limited (NYSE: SFUN) ("SouFun"), the leading real estate Internet portal in China, announced today its unaudited financial results for the second quarter of 2013.

Second Quarter 2013 Highlights

• Revenue in the second quarter of 2013 was $144.1 million, a 48.6% increase from the corresponding period in 2012.
• Operating income in the second quarter of 2013 was $75.8 million, a 59.6% increase from the corresponding period in 2012. Non-GAAP operating income in the second quarter of 2013 was $77.6 million, a 59.2% increase from the corresponding period in 2012.
• Net income attributable to SouFun's shareholders was $55.4 million, or $0.67 per fully diluted share, representing a year-over-year increase of 67.5%. Non-GAAP net income attributable to SouFun's shareholders was $62.5 million, or $0.75 per fully diluted share, representing a year-over-year increase of 56.3%.

First Half 2013 Highlights

• Revenue in the first half of 2013 was $235.2 million, a 51.3% increase from the corresponding period in 2012.
• Operating income in the first half of 2013 was $113.0 million, an 83.1% increase from the corresponding period in 2012. Non-GAAP operating income in the first half of 2013 was $116.5 million, an 81.6% increase from the corresponding period in 2012.
• Net income attributable to SouFun's shareholders was $83.8 million, or $1.01 per fully diluted share, representing a year-over-year increase of 74.1%. Non-GAAP net income attributable to SouFun's shareholders was $95.7 million, or $1.15 per fully diluted share, representing a year-over-year increase of 76.9%.

"We are proud of delivering another solid quarter and our 12th straight growth quarter above our guidance since SouFun's IPO," said Vincent Mo, Executive Chairman of SouFun. "We will continue to focus on products and services and invest in new technologies that will enhance SouFun's websites and mobile applications for SouFun's future growth and create long-term value for our shareholders."

Second Quarter 2013 Results

Revenues

SouFun reported total revenues of $144.1 million for the second quarter of 2013, representing an increase of 48.6% from the corresponding period in 2012, primarily driven by the growth in listing service and SouFun membership service.

Revenue from marketing services was $58.9 million for the second quarter of 2013, an increase of 5.9% from $55.7 million for the corresponding period in 2012.

Revenue from e-commerce services was $45.0 million for the second quarter of 2013, an 84.2% increase from $24.4 million for the same period in 2012, primarily due to the expansion of SouFun membership services in Beijing, Shanghai and other cities, including Chengdu and Chongqing.

Revenue from listing services was $38.4 million for the second quarter of 2013, an increase of 147.3% from $15.5 million for the corresponding period in 2012, primarily due to the substantial growth in agency subscribers.

Revenue from other value-added services was $1.8 million for the second quarter of 2013, an increase of 30.8% from $1.4 million for the corresponding period in 2012.

Cost of Revenue

Cost of revenue was $26.1 million for the second quarter of 2013, an increase of 43.5 % from $18.2 million for the corresponding period in 2012. The increase in cost of revenue was mainly driven by the increase in staff costs and taxes.

Gross margin was 81.9% for the second quarter of 2013, compared to 81.2% for the corresponding period in 2012.

Operating Expenses and Income

Operating expenses were $42.4 million for the second quarter of 2013, an increase of 35.5 % from $31.3 million for the corresponding period in 2012.

Selling expenses were $23.0 million for the second quarter of 2013, an increase of 34.0% from $17.1 million for the corresponding period in 2012, primarily due to increased staff cost.

General and administrative expenses were $19.4 million for the second quarter of 2013, an increase of 37.4% from $14.1 million for the corresponding period in 2012, primarily due to increased staff cost.

Operating income was $75.8 million for the second quarter of 2013, an increase of 59.6% from $47.5 million for the corresponding period in 2012, driven by revenue growth and effective cost control.

Income tax expense was $24.7 million for the second quarter of 2013, a 40.2% increase compared to $17.6 million for the corresponding period in 2012, mainly driven by profit growth.

Net income attributable to SouFun's shareholders was $55.4 million for the second quarter of 2013, a 71.2% increase from $32.3 million for the corresponding period in 2012. Fully diluted earnings per share were $0.67 for the second quarter of 2013, a 67.5% increase from $0.40 for the corresponding period in 2012.

Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $80.7 million for the second quarter of 2013, an increase of 58.7% as compared to $50.8 million for the corresponding period in 2012.

As of June 30, 2013, SouFun had cash, cash equivalents, and short-term investments (excluding the available-for-sale security) of $273.4 million, compared to $143.6 million as of December 31, 2012. Cash flow from operating activities was $79.6 million for the second quarter of 2013, a 79.7% increase from $44.3 million for the same period in 2012.

First Half 2013 Results

Revenues

SouFun reported total revenues of $235.2 million for the first half of 2013, representing an increase of 51.3% from the corresponding period in 2012, primarily driven by the growth in listing services and SouFun membership services.

Revenue from marketing services was $94.8 million for the first half of 2013, an increase of 5.4% from $89.9 million for the corresponding period in 2012.

Revenue from e-commerce services was $71.3 million for the first half of 2013, a 95.6% increase from $36.5 million for the same period in 2012, primarily due to the expansion of SouFun membership services in Beijing, Shanghai and other cities, including Chengdu and Chongqing.

Revenue from listing services was $65.3 million for the first half of 2013, an increase of 146.5% from $26.5 million for the corresponding period in 2012, primarily due to the substantial growth in agency subscribers.

Revenue from other value-added services was $3.8 million for the first half of 2013, an increase of 45.1% from $2.6 million for the corresponding period in 2012.

Cost of Revenue

Cost of revenue was $46.2 million for the first half of 2013, an increase of 32.9 % from $34.7 million for the corresponding period in 2012.  The increase in cost of revenue was primarily due to the increase in staff costs and business taxes.

Gross margin was 80.4% for the first half of 2013, improved from 77.7% for the corresponding period in 2012 as a result of effective cost control and revenue growth.

Operating Expenses and Income

Operating expenses were $76.2 million for the first half of 2013, an increase of 29.1 % from $59.0 million for the corresponding period in 2012.

Selling expenses were $41.7 million for the first half of 2013, an increase of 32.0% from $31.6 million for the corresponding period in 2012, primarily due to increased staff cost.

General and administrative expenses were $34.5 million for the first half of 2013, an increase of 25.7% from $27.4 million for the corresponding period in 2012, primarily due to increased staff cost.

Operating income was $113.0 million for the first half of 2013, an increase of 83.1% from $61.7 million for the corresponding period in 2012, driven by revenue growth and effective cost control.

Income tax expense was $36.4 million for the first half of 2013, an 86.1% increase compared to $19.6 million for the corresponding period in 2012. The increase was primarily due to a $15.2 million incremental tax expense driven by profit growth and a $1.6 million one-time tax benefit in the first half of 2012.

Net income attributable to SouFun's shareholders was $83.8 million for the first half of 2013, an increase of 78.7% from $46.9 million for the corresponding period in 2012. Fully diluted earnings per share were $1.01 for the first half of 2013, a 74.1% increase from $0.58 for the corresponding period in 2012.

Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $121.6 million for the first half of 2013, an increase of 78.0% as compared to $68.3 million for the corresponding period in 2012.

Cash flow from operating activities was $139.4 million for the first half of 2013, a 97.4% increase from $70.7 million for the same period in 2012.

Business Outlook

SouFun raises its total revenue guidance for 2013 from between $527.0 million and $538.0 million to between $538.0 million and $548.0 million, or from a year-over-year increase of between 22.5% and 25.0% to between 25.0% and 27.5%, despite uncertainties in China's property market for the second half of 2013. This forecast reflects SouFun's current and preliminary view, which is subject to change.

Conference Call Information

SouFun's management team will host a conference call on August 8, 2013 at 8 a.m. U.S. Eastern Daylight Time (8 p.m. Beijing/Hong Kong time).

The dial-in details for the live conference call are:

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 10:00 a.m. U.S. Eastern Daylight Time on August 8 through August 15, 2013. The dial-in details for the telephone replay are:

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 in China in terms of the number of page views and visitors to our websites in 2012.  Through SouFun's websites, it provides marketing, e-commerce, listing, and other value-added services for China's fast-growing real estate and home-related sectors. SouFun's Internet portal is highly focused on user experience, and supports SouFun's users in seeking information on the real estate and home-related sectors in China. SouFun currently maintains about 100 offices to focus on local market needs and its website and database contains real estate related content covering more than 320 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 revenue outlook for 2013 and statements regarding SouFun's strategic and operational plans and focus, current and future market positions the impact of government policies and China's real estate and home furnishings market. 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, current global economic conditions and their 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, 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 we have 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 and the related tax effects, as well as realized gain on available-for-sale security for the three months ended June 30, 2013, 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:

Mr. Hong Zhao
Vice President of Finance
SouFun Holdings Limited
Phone: +86-10-5631-8707
Email: hongzhao@soufun.com

Or

Ms. Yiwen Zhang
Investor Relations Manager
SouFun Holdings Limited
Phone: +86-10-5631 8659
E-mail: zhangyiwen@soufun.com

 

 

 

 

SOURCE SouFun Holdings Limited