Shanda (SNDA) has announced its unaudited financial results for the fourth quarter and for the full year ended December 31, 2004.
Shanda's revenues for the fourth quarter of 2004 increased 133.3% year-over-year, and 21.9% quarter-over-quarter to CNY453.1 million (US$54.7 million), and net revenues increased 134.2% year-over-year and 22.0% quarter-over-quarter to CNY430.9 million (US$52.1 million).
The company says online games revenues for the fourth quarter of 2004 increased 118.6% year-over-year and 20.7% quarter-over-quarter to CNY411.8 million (US$49.8 million), accounting for 90.9% of total revenues.
Other revenues for the fourth quarter, which primarily include revenues from online advertising, and other value-added services and products, increased 35.5% quarter-over-quarter to CNY41.3 million (US$5.0 million), accounting for 9.1% of total revenues.
Gross profit margin increased to 67.1% in the fourth quarter compared to 62.7% in the third quarter of 2004, while operating margin increased to 43.5% in the fourth quarter compared to 40.2% in the third quarter of 2004.
Net income for the fourth quarter of 2004 was CNY231.4 million (US$28.0 million), and diluted earnings per ADS were CNY3.12 (US$0.38).
Shanda completed the acquisition of an approximately 29% controlling stake of Actoz Soft Company, Ltd, a Korean developer, operator and publisher of online games, from certain shareholders of Actoz for approximately US$91.7 million, in an all cash transaction in early February 2005. In addition, in December 2004, Shanda purchased an additional amount of Actoz's shares on the KOSDAQ market equal to approximately 9% of Actoz's issued and outstanding shares at an aggregate cost of approximately US$14.4 million. In total, Shanda currently owns approximately 38% of Actoz and will be accounted for under equity method in 2005. Through this acquisition, Shanda solidified an important alliance with the supplier of one of its leading games, The Legend of Mir II. According to the user survey conducted by IDC, in late 2004, Mir II is the most popular online game in China.