Every journey begins with a small step, but Chinese Internet travel company eLong Inc.'s just-reported unaudited financial results for the second quarter ended June 30, 2009, show that with a year-on-year gross revenue and profit increase of only 1%, the company's long flight to great growth is being done with baby steps.
Net income in the second quarter was CNY9.5 million compared to net loss of CNY20.3 million in the prior year period, driven primarily by an increase of CNY14.3 million in operating income and a decrease of CNY19.5 million in foreign currency exchange losses, partially offset by a decrease of CNY2.9 million in interest income and an increase of CNY1.1 million in income tax expense.
"In the second quarter of 2009, we delivered eLong's highest ever quarterly operating income of CNY6.4 million. We are also delighted to have delivered positive net income for two consecutive quarters, and believe these results demonstrate that our turnaround is gaining momentum." said Guangfu Cui, CEO of eLong.
Operating income for eLong.com in the second quarter was CNY6.4 million compared to operating loss of CNY7.9 million in the prior year period, driven primarily by decreases in sales and marketing and general and administrative expenses.
Hotel commissions decreased 6% for the second quarter of 2009 compared to the prior year quarter, primarily due to lower commission per room night, which was partially offset by higher volume. Commission per room night decreased 8% year-on-year primarily due to lower average daily rates, partially offset by an increase in hotel commission rates. Room nights booked through eLong in the second quarter increased 1% year-on-year to 980,000.
Air ticketing commissions increased 19% for the second quarter of 2009 compared to the prior year quarter, driven by a 24% increase in air segments to 510,000, partially offset by a decrease of 3% in the average ticket price compared to the prior year quarter.
Total operating expenses decreased 21% for the second quarter of 2009 compared to the second quarter of 2008. Total operating expenses were 63% of net revenue, a decrease of 18 percentage points compared to the prior year quarter.
The online travel company currently expects net revenues for the third quarter of 2009 to be within the range of CNY88 million to CNY97 million, equal to an increase of 5% to 15% compared to the third quarter of 2008.