Chinese website operator Sina Corporation just announced its preliminary, unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008, a period in which revenues declined quarter-over-quarter and the future still seems dim.
Charles Chao, CEO of Sina, stated: "The spillover of the global financial crisis into post-Olympic China has had a negative impact on the Chinese brand advertising market. Such impact has been severe in the first quarter of 2009, as many of our advertising customers have experienced delays in their budgeting process or advertising campaigns. Although we have seen significant rebound in market demand since the end of February, it is too soon to assess the overall growth trend for brand advertising in China for the rest of 2009."
For the fourth quarter, Sina.com's net revenues increased 44% year-over-year and declined 4% quarter-over-quarter to USD101.5 million, exceeding the company's previous guidance between USD98.0 million and USD101.0 million. Advertising revenues grew 39% year-over-year and decreased 9% quarter-over-quarter to USD69.5 million, and non-advertising revenues increased 56% year-over-year and 10% quarter-over-quarter to USD32.0 million. GAAP net income increased 46% year-over-year and 17% quarter-over-quarter to USD25.6 million.
For the full 2008 fiscal year, net revenues increased 50% year-over-year to USD369.6 million. Sina.com's advertising revenues grew 53% year-over-year to USD258.5 million, while non-advertising revenues increased 44% year-over-year to USD111.1 million. GAAP net income increased 54% year-over-year to USD88.8 million.
On December 22, 2008, Sina.com announced that it entered into a definitive agreement with Focus Media Holding Limited to acquire substantially all of the assets of Focus Media's digital out-of-home advertising networks, including LCD display network, poster frame network and certain in-store network. The transaction is intended to combine the new media platform of the two companies in China to provide more effective and integrated marketing solutions to customers. The transaction is subject to customary closing conditions and certain regulatory approvals and is expected to be completed in the first half of 2009.
Based on the December 22, 2008, announcement, Sina will issue 47 million newly issued ordinary shares to Focus Media as consideration for the acquired assets. Focus Media will then distribute Sina shares to its shareholders shortly after the closing.
As of December 31, 2008, Sina's cash, cash equivalents and short-term investments totaled USD603.8 million, compared to USD478.0 million at the end of last year. Cash flow from operating activities for the fourth quarter of 2008 was USD46.9 million, compared to USD31.9 million for the same period last year and USD26.9 million for last quarter. For fiscal 2008, cash flow from operating activities was USD124.1 million, compared to USD89.1 million for fiscal 2007.
The company estimates that its total revenues for the first quarter of 2009 will be between USD73 million and USD77 million, with advertising revenues to be between USD43 million and USD46 million and non-advertising revenues to be between USD30 million and USD31 million.