Perfect World Announces Second Quarter 2012 Unaudited Financial Results

Posted on 2012-08-28 14:53:47 BJT, by Perfect World

Perfect World Announces Second Quarter 2012 Unaudited Financial Results

Second Quarter 2012 Financial Results

Total Revenues

Total revenues were RMB676.4 million (USD106.5 million) in 2Q12, as compared to RMB718.5 million in 1Q12 and RMB779.6 million in 2Q11. 

Online game operation revenues, which include both domestic and overseas online game operations, were RMB626.4 million (USD98.6 million) in 2Q12, as compared to RMB665.1 million in 1Q12 and RMB712.1 million in 2Q11.  In the second quarter, there were no major new launches and the Company continued its focus on preparing for its upcoming new game launches and further enhancing the content of its portfolio in order to lengthen the life cycles of existing games and maintain long-term sustainable growth.  

The aggregate average concurrent users (ACU) for games under operation in mainland China was approximately 739,000 in 2Q12, as compared to 804,000 in 1Q12 and 890,000 in 2Q11.  The decrease from 1Q12 was mainly due to more stringent anti-cheating efforts adopted by the Company during the second quarter.

Licensing revenues were RMB46.9 million (USD7.4 million) in 2Q12, as compared to RMB49.2 million in 1Q12 and RMB61.8 million in 2Q11.  The decrease from 1Q12 was mainly due to a decrease in usage-based royalty fees in certain overseas markets in 2Q12.

Other revenues were RMB3.0 million (USD0.5 million) in 2Q12, as compared to RMB4.2 million in 1Q12 and RMB5.6 million in 2Q11. 

Cost of Revenues

The cost of revenues was RMB126.6 million (USD19.9 million) in 2Q12, as compared to RMB127.1 million in 1Q12 and RMB113.7 million in 2Q11.  

Gross Profit and Gross Margin

Gross profit was RMB549.8 million (USD86.5 million) in 2Q12, as compared to RMB591.4 million in 1Q12 and RMB665.9 million in 2Q11.  Gross margin was 81.3% in 2Q12, as compared to 82.3% in 1Q12 and 85.4% in 2Q11.  

Operating Expenses

Operating expenses were RMB394.6 million (USD62.1 million) in 2Q12, as compared to RMB356.6 million in 1Q12 and RMB345.5 million in 2Q11.  The increase in operating expenses from 1Q12 was due to increases in sales and marketing expenses, R&D expenses, and general and administrative expenses in 2Q12.

R&D expenses were RMB189.7 million (USD29.9 million) in 2Q12, as compared to RMB179.4 million in 1Q12 and RMB161.0 million in 2Q11.  The increase from 1Q12 was primarily due to an increase in staff cost.

Sales and marketing expenses were RMB121.8 million (USD19.2 million) in 2Q12, as compared to RMB101.4 million in 1Q12 and RMB121.4 million in 2Q11.  Advertising and promotional expenses were reduced to a lower level in 1Q12 as the Company typically slowed down promotional activities during Chinese New Year.

General and administrative ("G&A") expenses were RMB83.1 million (USD13.1 million) in 2Q12, as compared to RMB75.8 million in 1Q12 and RMB63.1 million in 2Q11.  The increase from 1Q12 was mainly due to an increase in professional fees.

Operating Profit

Operating profit was RMB155.2 million (USD24.4 million) in 2Q12, as compared to RMB234.8 million in 1Q12 and RMB320.4 million in 2Q11.  Non-GAAP operating profit was RMB172.5 million (USD27.1 million) in 2Q12, as compared to RMB256.6 million in 1Q12 and RMB348.0 million in 2Q11.

Total Other Income

Total other income was RMB38.9 million (USD6.1 million) in 2Q12, as compared to RMB21.0 million in 1Q12 and RMB30.9 million in 2Q11.  Due to the fluctuation of the euro against the U.S. dollar, a foreign exchange gain was realized in 2Q12 while a foreign exchange loss was realized in 1Q12. 

Income Tax Expense

Income tax expense was RMB38.1 million (USD6.0 million) in 2Q12, as compared to RMB47.8 million in 1Q12 and RMB38.6 million in 2Q11.  The decrease from 1Q12 was primarily a result of the change in the operating profit in 2Q12. 

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