Business, Internet

Internet Revenue Drops For Chinese Job Recruitment Website 51job.com

It's a bad time to be investing in the Chinese Internet recruitment sector, as Chinese online job recruitment website company 51job Inc. announced its unaudited financial results for the second quarter of 2009 ended June 30, 2009, and showed a revenue slide for the quarter.

Total revenues decreased 11.6% over the second quarter of 2008 to CNY193.3 million, while gross margin improved to 59.8% compared with 54.9% year-on-year primarily due to the implementation of cost control and efficiency measures. Gross profit for the second quarter of 2009 decreased 4.2% to CNY109.6 million from CNY114.4 million for the same quarter of the prior year.

Rick Yan, president and CEOof 51job Inc., stated, "Our aggressive cost and expense management and focus on business process efficiency improvements yielded tangible results in the second quarter. We successfully drove margin expansion and delivered solid earnings despite challenging market conditions which continued to impact customer demand and revenues. Although spending per customer declined, we were pleased to see regained momentum in new customer acquisitions for our online business in the second quarter. The decisions and progress we have made to strengthen our operations and enhance our resource allocation this year reinforce our commitment to achieve sustainable growth and profitability for our shareholders over the long term."

Print advertising revenues for the second quarter of 2009 decreased 28.5% to CNY67.2 million compared with CNY93.9 million for the same quarter in 2008. The decrease was primarily due to a lower volume of print advertising pages in 51job Weekly, which was affected by a decline in market demand resulting from the continued impact of the global economic downturn and the slower economic growth environment in China.

Online recruitment services revenues for the second quarter of 2009 were CNY77.4 million, representing a 7.1% decrease from CNY83.3 million for the same quarter of the prior year. The decrease primarily resulted from lower average revenue per unique employer, which was partially offset by an increase in the number of unique employers using the company's online recruitment services.

Operating expenses for the second quarter of 2009 were CNY82.8 million compared with CNY84.1 million for the same quarter of 2008. Sales and marketing expenses for the second quarter of 2009 decreased 7.1% to CNY48.5 million from CNY52.2 million for the same quarter of the prior year primarily due to a decrease in advertising and promotion expenses and travel and entertainment expenses, which were partially offset by higher salary and benefits expenses compared to the same quarter in 2008.

Income from operations for the second quarter of 2009 was CNY26.8 million compared with CNY30.3 million for the same quarter of the prior year. The company's effective tax rate was an incredibly high 32.7% in the second quarter of 2009 compared with 36.3% in the second quarter of the prior year.

Net income for the second quarter of 2009 was CNY20.8 million compared with CNY19.3 million for the same quarter in 2008.

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