Chinese online game developer The9 Limited announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008, and showed that net income plummeted by 55% from the previous quarter due to an impairment charge.
While net revenues for fiscal year 2008 increased by 33% to CNY1.71 billion from CNY1.28 billion for fiscal year 2007, the end of last year proved problematic as revenues were CNY405.1 million, representing a 1% decrease from CNY408.4 million in the third quarter of 2008 and 4% decrease from CNY423.7 million in the fourth quarter of 2007. For fiscal year 2008, net income was CNY348.3 million, a 45% increase from CNY240.9 million for fiscal year 2007, but The9's net income for the fourth quarter was CNY44.4 million, representing a huge decrease of 55% from CNY98.4 million in the third quarter 2008 and 48% from CNY86.0 million in the fourth quarter 2007.
The decrease in net income compared with the third quarter of 2008 and the fourth quarter of 2007 was primarily due to an impairment charge of CNY24.0 million to reflect the full impairment of an investment in an online game development company in Korea.
Fully diluted earnings per share and per ADS for fiscal year 2008 was CNY12.57, a 44% increase over CNY8.72 in fiscal year 2007.
Jun Zhu, chairman and CEO of The9 stated, "Despite the global financial crisis started late last year, we still achieved remarkable financial results in 2008. Blizzard Entertainment's World of Warcraft continued to enjoy high popularity and tremendous growth. We maintained high peak concurrent users level of around one million starting the second quarter of 2008 and the average concurrent users level has improved by 25% from 360,000 in 2007 to 449,000 in 2008."
As at December 31, 2008, the company's total cash and cash equivalents and short term investment were CNY2.22 billion, compared to CNY2.24 billion as at September 30, 2008 and CNY2.22 billion as at December 31, 2007.