Le Lézard
Classified in: Tourism and vacations, Science and technology, Business, Covid-19 virus
Subjects: ERN, CCA, ERP

Tuniu Announces Unaudited Second Quarter 2020 Financial Results


NANJING, China, Aug. 28, 2020 /PRNewswire/ -- Tuniu Corporation (NASDAQ: TOUR) ("Tuniu" or the "Company"), a leading online leisure travel company in China, today announced its unaudited financial results for the second quarter ended June 30, 2020.

"After nearly six months of downturn caused by the COVID-19 outbreak, we are encouraged to see that China's domestic travel market is finally showing signs of recovery. We will continue to uphold our 'Customer First' principle in order to provide the best possible products and services to satisfy pent-up customer demand. Furthermore, we have adjusted our product strategy to focus on innovative and premium products in order to meet customers' more exacting standards in the post COVID-19 era. In cooperation with our industry partners, we are committed to providing our customers with superior travel experiences." Mr. Donald Dunde Yu, Tuniu's founder, Chairman and Chief Executive Officer, said, "In the second quarter our operating expenses continued to decline on a sequential basis. In the second half of the year, we expect to see the gradual recovery of revenues alongside the increasingly positive impact of our cost control measures."

Second Quarter 2020 Results

Net revenues were RMB34.0 million (US$4.8 million[1]) in the second quarter of 2020, representing a year-over-year decrease of 93.5% from the corresponding period in 2019. The decrease was primarily due to the negative impact brought by the outbreak and spread of COVID-19.

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB7.0651 on June 30, 2020 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/default.htm.

[2] On January 24, 2020, the Ministry of Culture and Tourism of the People's Republic of China issued a notice requiring travel agencies, including online travel agencies throughout the country to suspend the operation of organized tours and the provision of a combination of flight and hotel bookings.

Cost of revenues was RMB26.3 million (US$3.7 million) in the second quarter of 2020, representing a year-over-year decrease of 90.8% from the corresponding period in 2019. As a percentage of net revenues, cost of revenues was 77.3% in the second quarter of 2020, compared to 55.2% in the corresponding period in 2019.

Gross margin was 22.7% in the second quarter of 2020, compared to a gross margin of 44.8% in the second quarter of 2019. The decrease was primarily due to the decline in net revenues impacted by the outbreak and spread of COVID-19.

Operating expenses were RMB158.1 million (US$22.4 million) in the second quarter of 2020, representing a year-over-year decrease of 63.4% from the corresponding period in 2019. Share-based compensation expenses and amortization of acquired intangible assets, which were allocated to operating expenses, were RMB19.1 million (US$2.7 million) in the second quarter of 2020. Non-GAAP[3] operating expenses, which excluded share-based compensation expenses and amortization of acquired intangible assets, were RMB138.9 million (US$19.7 million) in the second quarter of 2020, representing a year-over-year decrease of 63.7%.

[3] The section below entitled "About Non-GAAP Financial Measures" provides information about the use of Non-GAAP financial measures in this press release, and the table captioned "Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release reconciles Non-GAAP financial information with the Company's financial results under GAAP.

Loss from operations was RMB150.3 million (US$21.3 million) in the second quarter of 2020, compared to a loss from operations of RMB199.2 million in the second quarter of 2019. Non-GAAP loss from operations, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB131.0 million (US$18.5 million) in the second quarter of 2020.

Net loss was RMB154.6 million (US$21.9 million) in the second quarter of 2020, compared to a net loss of RMB167.2 million in the second quarter of 2019. Non-GAAP net loss, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB135.3 million (US$19.1 million) in the second quarter of 2020.

Net loss attributable to ordinary shareholders was RMB147.6 million (US$20.9 million) in the second quarter of 2020, compared to a net loss attributable to ordinary shareholders of RMB168.0 million in the second quarter of 2019. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses and amortization of acquired intangible assets, was RMB128.3 million (US$18.2 million) in the second quarter of 2020.

As of June 30, 2020, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1.6 billion (US$225.2 million). The COVID-19 pandemic has negatively impacted our business operation and cash flows for the second quarter of 2020, which could continue to impact on subsequent periods. Based on our liquidity assessment and management actions, we believe that our available cash, cash equivalents and maturity of investments will be sufficient to meet our working capital requirements and capital expenditures in the ordinary course of business for the next twelve months.

Business Outlook

Tuniu's business has been significantly and negatively impacted by the outbreak and spread of COVID-19 since January 2020. As a result of the continued influence by COVID-19, for the third quarter of 2020, the Company expects to generate RMB85.3 million to RMB170.5 million of net revenues, which represents 80% to 90% decrease year-over-year, and 151% to 401% increase quarter-over-quarter. This forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change.

Conference Call Information

Tuniu's management will hold an earnings conference call at 8:00 am U.S. Eastern Time, on August 28, 2020, (8:00 pm, Beijing/Hong Kong Time, on August 28, 2020) to discuss the second quarter 2020 financial results.

To participate in the conference call, please dial the following numbers:

US:           

+1-888-346-8982

Hong Kong:    

+852-301-84992

Mainland China: 

4001-201203

International:   

+1-412-902-4272

Conference ID:

Tuniu 2Q 2020 Earnings Call

A telephone replay will be available one hour after the end of the conference through September 3, 2020. The dial-in details are as follows:

US:        

+1-877-344-7529

International: 

+1-412-317-0088

Replay Access Code:

10147497

Additionally, a live and archived webcast of the conference call will also be available on the Company's investor relations website at http://ir.tuniu.com.

About Tuniu

Tuniu (Nasdaq:TOUR) is a leading online leisure travel company in China that offers a large selection of packaged tours, including organized and self-guided tours, as well as travel-related services for leisure travelers through its website tuniu.com and mobile platform. Tuniu covers over 420 departing cities throughout China and all popular destinations worldwide. Tuniu provides one-stop leisure travel solutions and a compelling customer experience through its online platform and offline service network, including a dedicated team of professional customer service representatives, 24/7 call centers, extensive networks of offline retail stores and self-operated local tour operators. For more information, please visit http://ir.tuniu.com.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Tuniu may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Tuniu's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but are not limited to the following: Tuniu's goals and strategies; the growth of the online leisure travel market in China; the demand for Tuniu's products and services; its relationships with customers and travel suppliers; the Company's ability to offer competitive travel products and services; Tuniu's future business development, results of operations and financial condition; competition in the online travel industry in China; relevant government policies and regulations relating to the Company's structure, business and industry; the impact of the COVID-19 on Tuniu's business operations, the travel industry and the economy of China and elsewhere generally; and the general economic and business condition in China and elsewhere. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Tuniu does not undertake any obligation to update such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement the Company's unaudited consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), the Company has provided non-GAAP information related to cost of revenues, research and product development expenses, sales and marketing expenses, general and administrative expenses, other operating income, total operating expenses, loss from operations, net loss, net loss attributable to ordinary shareholders, net loss per ordinary share attributable to ordinary shareholders-basic and diluted and net loss per ADS-basic and diluted, which excludes share-based compensation expenses, amortization of acquired intangible assets and impairment of acquired intangible assets. We believe that the non-GAAP financial measures used in this press release are useful for understanding and assessing underlying business performance and operating trends, and management and investors benefit from referring to these non-GAAP financial measures in assessing our financial performance and when planning and forecasting future periods. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP Results" set forth at the end of this press release.

A limitation of using non-GAAP financial measures excluding share-based compensation expenses, amortization of acquired intangible assets and impairment of acquired intangible assets is that share-based compensation expenses, amortization of acquired intangible assets and impairment of acquired intangible assets have been ? and will continue to be ? significant recurring expenses in the Company's business. You should not view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies.

(Financial Tables Follow)

Tuniu Corporation

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands, except per share information)



 December 31, 2019 


 June 30, 2020 


 June 30, 2020 


 RMB 


 RMB 


 US$ 







ASSETS






Current assets






     Cash and cash equivalents

295,463


527,934


74,724

     Restricted cash 

327,052


85,904


12,159

     Short-term investments

1,305,386


976,996


138,285

     Accounts receivable, net

529,983


364,146


51,542

     Amounts due from related parties

65,108


50,998


7,218

     Prepayments and other current assets  

1,300,284


899,562


127,324

Total current assets

3,823,276


2,905,540


411,252







Non-current assets






     Long-term investments

1,305,612


557,446


78,901

     Property and equipment, net

223,340


197,230


27,916

     Intangible assets, net

166,267


112,602


15,938

     Land use right, net

98,774


97,744


13,835

     Operating lease right-of-use assets, net

105,839


54,945


7,777

     Goodwill

232,007


232,007


32,838

     Other non-current assets

83,923


60,147


8,514

     Long-term amounts due from related parties

557,582


552,328


78,177

Total non-current assets

2,773,344


1,864,449


263,896

Total assets

6,596,620


4,769,989


675,148







LIABILITIES AND SHAREHOLDERS' EQUITY






Current liabilities






     Short-term borrowings

203,845


50,602


7,162

     Accounts and notes payable 

1,311,963


998,689


141,355

     Amounts due to related parties

29,755


27,913


3,951

     Salary and welfare payable

112,511


52,836


7,478

     Taxes payable

12,207


2,255


319

     Advances from customers

1,113,879


229,856


32,534

     Operating lease liabilities, current

57,490


35,451


5,018

     Accrued expenses and other current liabilities

907,119


897,505


127,034

Total current liabilities

3,748,769


2,295,107


324,851







Non-current liabilities






     Operating lease liabilities, non-current

54,718


37,551


5,315

     Deferred tax liabilities

23,658


22,029


3,118

     Long-term borrowings

9,689


19,403


2,746

     Other non-current liabilities

10,947


10,947


1,550

Total non-current liabilities

99,012


89,930


12,729

Total liabilities

3,847,781


2,385,037


337,580







Mezzanine equity






Redeemable noncontrolling interests

37,200


37,261


5,274







Shareholders' equity






     Ordinary shares

249


249


35

     Less: Treasury stock

(310,942)


(308,146)


(43,615)

     Additional paid-in capital

9,113,512


9,118,231


1,290,602

     Accumulated other comprehensive income

293,784


301,604


42,689

     Accumulated deficit*

(6,385,974)


(6,754,555)


(956,045)

Total Tuniu's shareholders' equity

2,710,629


2,357,383


333,666

Noncontrolling interests

1,010


(9,692)


(1,372)

Total Shareholders' equity

2,711,639


2,347,691


332,294

Total liabilities and shareholders' equity

6,596,620


4,769,989


675,148













*On 1 January 2020, the Company adopted ASU No. 2016-13 (ASU 2016-13), "Financial Instruments ? Credit Losses", and recognized a
cumulative-effect adjustment to the opening retained earnings at the adoption date.

 

Tuniu Corporation

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(All amounts in thousands, except per share information)



 Quarter Ended 


 Quarter Ended 


 Quarter Ended 


 Quarter Ended 


 June 30, 2019 


 March 31, 2020 


 June 30, 2020 


 June 30, 2020 


 RMB 


 RMB 


 RMB 


 US$ 









Revenues








     Packaged tours

429,482


120,240


12,563


1,778

     Others

90,848


53,741


21,461


3,038

Net revenues

520,330


173,981


34,024


4,816

Cost of revenues

(287,330)


(81,460)


(26,292)


(3,721)

Gross profit

233,000


92,521


7,732


1,095









Operating expenses








     Research and product development

(80,197)


(51,026)


(20,647)


(2,922)

     Sales and marketing

(224,582)


(124,698)


(84,255)


(11,926)

     General and administrative

(134,389)


(133,860)


(60,952)


(8,627)

     Other operating income

6,925


1,574


7,774


1,100

Total operating expenses

(432,243)


(308,010)


(158,080)


(22,375)

Loss from operations

(199,243)


(215,489)


(150,348)


(21,280)

Other income/(expenses)








     Interest and investment income, net

36,645


21,852


7,061


999

     Interest expense

(6,970)


(10,499)


(9,627)


(1,363)

     Foreign exchange gains/(losses), net

1,090


(877)


(4,184)


(592)

     Other income/(loss), net

586


(1,718)


1,323


187

Loss before income tax expense

(167,892)


(206,731)


(155,775)


(22,049)

Income tax benefit

738


817


934


132

Equity in income of affiliates

-


744


215


30

Net loss

(167,154)


(205,170)


(154,626)


(21,887)

Net loss attributable to noncontrolling interests

(444)


(3,629)


(7,073)


(1,001)

Net income/(loss) attributable to redeemable noncontrolling
interests

245


(81)


142


20

Net loss attributable to Tuniu Corporation

(166,955)


(201,460)


(147,695)


(20,906)

(Accretion on)/Reversal of redeemable noncontrolling interests

(1,033)


(81)


81


11

Net loss attributable to ordinary shareholders

(167,988)


(201,541)


(147,614)


(20,895)









Net loss

(167,154)


(205,170)


(154,626)


(21,887)

Other comprehensive income/(loss):








     Foreign currency translation adjustment, net of nil tax

7,110


8,091


(271)


(38)

Comprehensive loss

(160,044)


(197,079)


(154,897)


(21,925)









Loss per share








Net loss per ordinary share attributable to ordinary shareholders -
basic and diluted

(0.45)


(0.54)


(0.40)


(0.06)

Net loss per ADS - basic and diluted*

(1.35)


(1.62)


(1.20)


(0.18)

Weighted average number of ordinary shares used in computing
basic and diluted loss per share

369,343,738


370,055,731


370,145,186


370,145,186









Share-based compensation expenses included are as follows:








     Cost of revenues

1,827


207


189


27

     Research and product development

4,112


2,136


832


118

     Sales and marketing

1,519


205


147


21

     General and administrative

8,723


2,025


1,759


249

Total

16,181


4,573


2,927


415









*Each ADS represents three of the Company's ordinary shares.







 

Reconciliations of GAAP and Non-GAAP Results

(All amounts in thousands, except per share information)












 Quarter Ended June 30, 2020


 GAAP  


 Share-based 


Amortization of acquired 


Impairment of acquired


 Non-GAAP 


 Result 


 Compensation 


  intangible assets 


  intangible assets 


 Result 











Cost of revenues

(26,292)


189


-


-


(26,103)











Research and product development

(20,647)


832


782




(19,033)

Sales and marketing

(84,255)


147


14,915


-


(69,193)

General and administrative

(60,952)


1,759


709




(58,484)

Other operating income

7,774


-


-




7,774

Total operating expenses

(158,080)


2,738


16,406


-


(138,936)











Loss from operations

(150,348)


2,927


16,406


-


(131,015)











Net loss

(154,626)


2,927


16,406


-


(135,293)











Net loss attributable to ordinary
shareholders

(147,614)


2,927


16,406


-


(128,281)











Net loss per ordinary share attributable to ordinary
shareholders - basic and diluted

(0.40)








(0.35)

Net loss per ADS - basic and diluted

(1.20)








(1.05)











Weighted average number of ordinary shares used in
computing basic and diluted loss per share

370,145,186








370,145,186






















 Quarter Ended March 31, 2020


 GAAP  


 Share-based 


Amortization of acquired 


Impairment of acquired


 Non-GAAP 


 Result 


 Compensation 


  intangible assets 


  intangible assets 


 Result 











Cost of revenues

(81,460)


207


-


-


(81,253)











Research and product development

(51,026)


2,136


933




(47,957)

Sales and marketing

(124,698)


205


22,050


9,554


(92,889)

General and administrative

(133,860)


2,025


709




(131,126)

Other operating income

1,574


-


-




1,574

Total operating expenses

(308,010)


4,366


23,692


9,554


(270,398)











Loss from operations

(215,489)


4,573


23,692


9,554


(177,670)











Net Loss

(205,170)


4,573


23,692


9,554


(167,351)











Net loss attributable to ordinary shareholders

(201,541)


4,573


23,692


9,554


(163,722)











Net loss per ordinary share attributable to ordinary
shareholders - basic and diluted

(0.54)








(0.44)

Net loss per ADS - basic and diluted

(1.62)








(1.32)











Weighted average number of ordinary shares used in
computing basic and diluted loss per share

370,055,731








370,055,731






















 Quarter Ended June 30, 2019


 GAAP  


 Share-based 


Amortization of acquired 


Impairment of acquired


 Non-GAAP 


 Result 


 Compensation 


  intangible assets 


  intangible assets 


 Result 











Cost of revenues

(287,330)


1,827


-


-


(285,503)











Research and product development

(80,197)


4,112


513


-


(75,572)

Sales and marketing

(224,582)


1,519


34,163


-


(188,900)

General and administrative

(134,389)


8,723


704


-


(124,962)

Other operating income

6,925


-


-


-


6,925

Total operating expenses

(432,243)


14,354


35,380


-


(382,509)











Loss from operations

(199,243)


16,181


35,380


-


(147,682)











Net loss

(167,154)


16,181


35,380


-


(115,593)











Net loss attributable to ordinary shareholders

(167,988)


16,181


35,380


-


(116,427)











Net loss per ordinary share attributable to ordinary
shareholders - basic and diluted

(0.45)








(0.32)

Net loss per ADS - basic and diluted

(1.35)








(0.96)











Weighted average number of ordinary shares used in
computing basic and diluted loss per share

369,343,738








369,343,738





















*Basic net loss per ordinary share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the periods. Diluted net loss per ordinary share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary
shareholders by the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods, including the dilutive effect of share-based
awards as determined under the treasury stock method.

SOURCE Tuniu


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