Chinese Internet travel website eLong.com (LONG) reported its unaudited financial results for the first quarter ended March 31, 2008 and says net loss from continuing operations worsened year-on-year by CNY31.7 million to CNY32.6 million, driven primarily by a CNY28.3 million increase in unrealized foreign exchange losses and a CNY4.1 million decrease in interest income compared to the prior year quarter, caused by the appreciation of the Renminbi and lower U.S. interest rates.
The company's total gross revenues increased 25% year-on-year to CNY81.4 million and net revenues increased 24% year-on-year to CNY76.7 million.
"While we are pleased with the 24% year-on-year net revenue growth that we achieved in the first quarter, there is more work to be done," said CEO Guangfu Cui in a statement. "Going forward, we will continue to focus on building a strong team, improving customer experience through the website and call center, and building a strong eLong brand via effective marketing programs."
Hotel commissions for the first quarter of 2008 increased 17% year-on-year primarily due to higher room volume. Room nights booked through eLong increased 16% to 875,000, while commission per room night was CNY0.8 higher than the prior year quarter, at CNY65.4.
Air ticketing commissions for the first quarter of 2008 increased 63% year-on-year, driven by a 31% increase in air segments to 428,000, and an increase of 75 basis points in the average percent commission to 5.5% or CNY46 per air ticket. The quarter also benefited from a higher average ticket price, which increased 7.3% year-on-year, to CNY828.
Gross margin in the first quarter was 69% compared to 71% in the prior year period driven by the growth of lower margin air revenues. Total operating expenses increased 15% for the first quarter of 2008 compared to the first quarter of 2007. Operating expenses were 74% of net revenues decreasing by 5 percentage points compared to the first quarter of the prior year.
eLong expects net revenues for the second quarter of 2008 to be within the range of CNY79 million to CNY88 million, an increase of 6% to 18% from the second quarter of 2007.