Trip.com Group Limited Reports Unaudited Second Quarter and First Half of 2021 Financial Results

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SHANGHAI, Sept. 24, 2021 /PRNewswire/ — Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) (“Trip.com Group” or the “Company”), a leading one-stop travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management, today announced its unaudited financial results for the second quarter and first half of 2021.

Key Highlights for the Second Quarter of 2021

  • Our business has showed resilient recovery in the China domestic market.
    —    Total net revenue increased by 86% year over year and 43% quarter over quarter, driven by the strong recovery momentum of the China domestic market.
    —    Both our domestic hotel and air-ticket GMV increased by about 150% year over year. Compared with the same pre-COVID period in 2019, both domestic hotel and air ticketing reservations achieved double-digit growth in the second quarter.
    —    Staycation travel continues to serve as a major driver of domestic recovery with local hotel reservations growing nearly 80% versus pre-COVID period in 2019.
    —    Revenues from corporate travel management grew 141% year over year and 26% compared with the pre-COVID period in 2019.

“Overall, the Chinese domestic travel market has been encouraging, and we see great potential in international markets,” said James Liang, Executive Chairman. “Going forward, we will continue to be adaptive and responsive to the changing market conditions and the evolving demands of post-pandemic travelers.”

“Throughout the second quarter, we continued to focus on the domestic market in terms of supply chain, content capabilities, service quality, and technology advancement, to lay a solid foundation for new growth drivers beyond the pandemic,” said Jane Sun, Chief Executive Officer. “We also endeavor to maximize our social impacts while increasing the Company’s total value. We will keep improving as we strive towards our ideals.”

Second Quarter of 2021 Financial Results and Business Updates

The Company’s overall results for the second quarter of 2021 were negatively impacted by the COVID-19 pandemic, as well as subsequent outbreaks driven by new variants of COVID-19. However, benefiting from the general containment of the COVID-19 pandemic in China, the Company’s domestic business has continued to show a strong recovery, which has contributed to substantially all of its total revenue.

For the second quarter of 2021, Trip.com Group reported net revenue of RMB5.9 billion (US$912 million), representing an 86% increase from the same period in 2020, primarily due to the strong recovery of China’s domestic market. Net revenue for the second quarter of 2021 increased by 43% from the previous quarter, primarily due to the easement of China’s travel restrictions previously enhanced in January and February 2021.

Accommodation reservation revenue for the second quarter of 2021 was RMB2.5 billion (US$380 million), representing a 96% increase from the same period in 2020, and a 55% increase from the previous quarter, primarily due to the recovery of China’s domestic market.

Transportation ticketing revenue for the second quarter of 2021 was RMB2.1 billion (US$320 million), representing an 80% increase from the same period in 2020, and a 37% increase from the previous quarter, primarily due to the recovery of China’s domestic market.

Packaged-tour revenue for the second quarter of 2021 was RMB367 million (US$57 million), representing a 182% increase from the same period in 2020, and a 117% increase from the previous quarter, primarily due to the recovery of China’s domestic market.

Corporate travel revenue for the second quarter of 2021 was RMB390 million (US$60 million), representing a 141% increase from the same period in 2020, and a 55% increase from the previous quarter, primarily due to the recovery of China’s domestic market.

Gross margin was 79% for the second quarter of 2021, which increased from 72% for the same period in 2020 and 75% for the previous quarter.

Product development expenses for the second quarter of 2021 increased by 24% to RMB2.2 billion (US$345 million) from the same period in 2020, primarily due to an increase in product development personnel related expenses. Product development expenses stayed approximately the same from the previous quarter. Product development expenses for the second quarter of 2021 accounted for 38% of the net revenue.

Sales and marketing expenses for the second quarter of 2021 increased by 112% to RMB1.4 billion (US$217 million) from the same period in 2020 and increased by 47% from the previous quarter, primarily due to the increase in expenses relating to sales and marketing promotion activities. Sales and marketing expenses for the second quarter of 2021 accounted for 24% of the net revenue.

General and administrative expenses for the second quarter of 2021 increased by 39% to RMB713 million (US$110 million) from the same period in 2020, primarily due to a reversal of bad debt provision in the second quarter of 2020 for the Company’s travel suppliers reflecting the change in credit risk with travel industry recovery. Excluding the effect of bad debt provision, general and administrative expenses stayed flat from the same period in 2020. General and administrative expenses increased by 4% from the previous quarter. General and administrative expenses for the second quarter of 2021 accounted for 12% of the net revenue.

Income tax expense for the second quarter of 2021 was RMB97 million (US$15 million), compared to RMB201 million in the same period in 2020 and RMB41 million in the previous quarter. The change in our effective tax rate was primarily due to the non-taxable income of the fair value changes in equity securities investments and exchangeable senior notes.

Net loss attributable to Trip.com Group’s shareholders for the second quarter of 2021 was RMB647 million (US$100 million), compared to net loss attributable to Trip.com Group’s shareholders of RMB476 million in the same period in 2020 and net income attributable to Trip.com Group’s shareholders of RMB1.8 billion in the previous quarter. Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense), non-GAAP net income attributable to Trip.com Group’s shareholders was RMB728 million (US$112 million), compared to non-GAAP net loss attributable to Trip.com Group’s shareholders of RMB1.2 billion in the same period in 2020 and non-GAAP net loss attributable to Trip.com Group’s shareholders of RMB204 million in the previous quarter.

Adjusted EBITDA for the second quarter of 2021 was RMB916 million (US$142 million), compared to RMB124 million in the same period in 2020 and RMB-216 million in the previous quarter. Adjusted EBITDA margin was 16% for the second quarter of 2021, compared to 4% in the same period in 2020 and -5% in the previous quarter.

Diluted loss per ordinary share and per ADS was RMB1.02 (US$0.16) for the second quarter of 2021. Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes, non-GAAP diluted earnings per ordinary share and per ADS were RMB1.13 (US$0.18) for the second quarter of 2021. Each ADS currently represents one ordinary share of the Company.

As of June 30, 2021, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB75.4 billion (US$11.7 billion).

Conference Call

Trip.com Group’s management team will host a conference call at 8:00PM EST on September 23, 2021 (or 8:00AM CST on September 24, 2021) following this announcement.

The conference call will be available live on Webcast and for replay at: https://investors.trip.com. The call will be archived for twelve months on our website.

All participants must pre-register to join this conference call using the Participant Registration link below:

https://s1.c-conf.com/diamondpass/10016512-wu23h2.html

Upon registration, each participant will receive details for this conference call, including dial-in numbers, passcode and a unique access PIN. To join the conference, please dial the number provided, enter the passcode, followed by your PIN.

A telephone replay of the call will be available after the conclusion of the conference call until October 1, 2021.

The dial-in details for the replay:
International dial-in number: +61-7-3107-6325
Passcode: 10016512

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “future,” “intend,” “plan,” “believe,” “estimate,” “is/are likely to,” “confident” or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Trip.com Group’s strategic and operational plans, contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, severe or prolonged downturn in the global or Chinese economy, general declines or disruptions in the travel industry, volatility in the trading price of Trip.com Group’s ADSs or shares, Trip.com Group’s reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in the relevant jurisdictions where Trip.com Group operates, failure to successfully develop Trip.com Group’s existing or future business lines, damage to or failure of Trip.com Group’s infrastructure and technology, loss of services of Trip.com Group’s key executives, adverse changes in economic and political policies of the PRC government, inflation in China, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Trip.com Group’s affiliated Chinese entities and the contractual arrangements among Trip.com Group, its affiliated Chinese entities and their shareholders, and other risks outlined in Trip.com Group’s filings with the U.S. Securities and Exchange Commission or the Stock Exchange of Hong Kong Limited. All information provided in this press release and in the attachments is as of the date of the issuance, and Trip.com Group does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

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About Non-GAAP Financial Measures

To supplement Trip.com Group’s unaudited condensed consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), Trip.com Group uses Non-GAAP financial information related to adjusted net income attributable to Trip.com Group’s shareholders, adjusted EBITDA, adjusted EBITDA margin and adjusted diluted earnings per ordinary share and per ADS, each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, “Compensation-Stock Compensation” and its share-based compensation charges are not tax deductible, and fair value changes of equity securities investments and exchangeable senior notes, net of tax, recorded under ASU 2016-1. Trip.com Group’s management believes the Non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.

Non-GAAP information is not prepared in accordance with GAAP, does not have a standardized meaning under GAAP, and may be different from Non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using Non-GAAP financial measures is that Non-GAAP measures exclude share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes that have been and will continue to be significant recurring expenses in Trip.com Group’s business for the foreseeable future.

Reconciliations of Trip.com Group’s Non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

About Trip.com Group Limited

Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) is a leading one-stop travel platform globally, integrating a comprehensive suite of travel products and services and differentiated travel content. It is the go-to destination for travelers in China, and increasingly for travelers around the world, to explore travel and get inspired, to make informed and cost-effective travel bookings, and to enjoy hassle-free, on-the-go support and share travel experience. Founded in 1999 and listed on Nasdaq in 2003, the Company operates under a portfolio of brands, including Ctrip, Qunar, Trip.com and Skyscanner.

For further information, please contact:

Investor Relations
Trip.com Group Limited
Tel: +86 (21) 3406-4880 X 12229
Email: iremail@trip.com

Trip.com Group Limited

Unaudited Consolidated Balance Sheets

(In millions, except share and per share data)

December 31, 2020

June 30, 2021

June 30, 2021

RMB (million)

RMB (million)

USD (million)

(unaudited)

(unaudited)

(unaudited)

ASSETS

Current assets:

Cash, cash equivalents and restricted cash

19,415

27,696

4,290

Short-term investments

24,820

35,286

5,465

Accounts receivable, net 

4,119

5,339

827

Prepayments and other current assets 

9,657

10,377

1,607

Total current assets

58,011

78,698

12,189

Property, equipment and software

5,780

5,605

868

Intangible assets and land use rights

13,344

13,177

2,041

Right-of-use asset

987

1,014

157

Investments (Includes held to maturity time deposit and
financial products of RMB15,357 million and RMB12,388
million as of December 31,2020 and June 30, 2021,
respectively)

47,943

47,039

7,285

Goodwill

59,353

59,353

9,193

Other long-term assets

436

413

64

Deferred tax asset

1,395

1,706

264

Total assets

187,249

207,005

32,061

LIABILITIES

Current liabilities:

Short-term debt and current portion of long-term debt

33,665

40,967

6,345

Accounts payable

4,506

6,577

1,019

Advances from customers

7,605

7,595

1,176

Other current liabilities

12,593

13,431

2,080

Total current liabilities

58,369

68,570

10,620

Deferred tax liability

3,574

3,534

547

Long-term debt

22,718

22,713

3,518

Long-term lease liability

618

608

94

Other long-term liabilities

403

250

39

Total liabilities

85,682

95,675

14,818

SHAREHOLDERS’ EQUITY

Total Trip.com Group Limited shareholders’ equity

100,354

110,395

17,098

Non-controlling interests

1,213

935

145

Total shareholders’ equity

101,567

111,330

17,243

Total liabilities and shareholders’ equity

187,249

207,005

32,061

Trip.com Group Limited

Unaudited Consolidated Statements of Income/(Loss)

(In millions, except share and per share data)

Three Months Ended

Six Months Ended

June 30, 2020

March 31, 2021

June 30, 2021

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2021

RMB (million)

RMB (million)

RMB (million)

USD (million)

RMB (million)

RMB (million)

USD (million)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Revenue:

Accommodation reservation 

1,254

1,580

2,455

380

2,409

4,035

625

Transportation ticketing 

1,150

1,506

2,066

320

3,543

3,572

553

Packaged-tour 

130

169

367

57

653

536

83

Corporate travel

162

252

390

60

288

642

99

Others

466

602

614

95

1,003

1,216

188

Total revenue

3,162

4,109

5,892

912

7,896

10,001

1,548

Less: Sales tax and surcharges

(3)

(1)

(2)

(0)

(6)

(3)

(0)

Net revenue

3,159

4,108

5,890

912

7,890

9,998

1,548

Cost of revenue

(872)

(1,034)

(1,223)

(189)

(2,092)

(2,257)

(350)

Gross profit

2,287

3,074

4,667

723

5,798

7,741

1,198

Operating expenses:

Product development **

(1,801)

(2,225)

(2,226)

(345)

(3,497)

(4,451)

(689)

Sales and marketing **

(661)

(952)

(1,402)

(217)

(2,044)

(2,354)

(365)

General and administrative **

(513)

(684)

(713)

(110)

(2,455)

(1,397)

(216)

Total operating expenses

(2,975)

(3,861)

(4,341)

(672)

(7,996)

(8,202)

(1,270)

(Loss)/income from operations

(688)

(787)

326

51

(2,198)

(461)

(72)

Interest income 

603

418

472

73

1,116

890

138

Interest expense

(461)

(407)

(418)

(65)

(908)

(825)

(128)

Other income/(expense)

1,766

2,508

(848)

(131)

(2,060)

1,660

257

Income/(loss) before income tax
expense and equity in income of
affiliates

1,220

1,732

(468)

(72)

(4,050)

1,264

195

Income tax (expense)/benefit

(201)

(41)

(97)

(15)

53

(138)

(21)

Equity in (loss)/income of affiliates

(1,491)

74

(94)

(15)

(1,812)

(20)

(3)

Net (loss)/income

(472)

1,765

(659)

(102)

(5,809)

1,106

171

Net loss attributable to non-controlling
interests

12

15

12

2

20

27

4

Accretion to redemption value of
redeemable non-controlling interests

(16)

(40)

Net (loss)/income attributable to
Trip.com Group Limited

(476)

1,780

(647)

(100)

(5,829)

1,133

175

(Losses)/earnings per ordinary share *

– Basic

(0.80)

2.95

(1.02)

(0.16)

(9.75)

1.76

0.27

– Diluted

(0.80)

2.88

(1.02)

(0.16)

(9.75)

1.73

0.27

(Losses)/earnings per ADS *

– Basic

(0.80)

2.95

(1.02)

(0.16)

(9.75)

1.76

0.27

– Diluted

(0.80)

2.88

(1.02)

(0.16)

(9.75)

1.73

0.27

Weighted average ordinary shares outstanding *

– Basic

599,749,816

604,596,792

635,476,056

635,476,056

597,903,192

644,666,248

644,666,248

– Diluted

599,749,816

629,540,722

635,476,056

635,476,056

597,903,192

656,483,984

656,483,984

** Share-based compensation included in Operating expenses above is as follows:

  Product development 

252

151

181

28

431

332

51

  Sales and marketing 

41

22

34

5

71

56

9

  General and administrative 

195

121

151

23

328

272

42

* The change in ADS ratio proportionate to the Share Subdivision from eight ADSs representing one ordinary share to one ADS representing one Share, effective on March 18, 2021. Basic
and diluted earnings/(losses) per ordinary share (GAAP and Non-GAAP) and weighted average ordinary shares outstanding (GAAP and Non-GAAP) for the three months ended June 30, 2020
and for the six months ended June 30, 2020 have been retrospectively adjusted for the Share Subdivision that became effective on March 18, 2021.

Trip.com Group Limited

Reconciliation of  GAAP and Non-GAAP Results

(In millions, except % and per share data)

Three Months Ended

Six Months Ended

June 30, 2020

March 31, 2021

June 30, 2021

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2021

RMB (million)

RMB (million)

RMB (million)

USD (million)

RMB (million)

RMB (million)

USD (million)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Net (Loss)/income

(472)

1,765

(659)

(102)

(5,809)

1,106

171

Less: Interest income

(603)

(418)

(472)

(73)

(1,116)

(890)

(138)

Add: Interest expense

461

407

418

65

908

825

128

Add: Other (income)/expense

(1,766)

(2,508)

848

131

2,060

(1,660)

(257)

Add: Income tax expense/(benefit)

201

41

97

15

(53)

138

21

Add: Equity in loss/(income) of affiliates

1,491

(74)

94

15

1,812

20

3

(Loss)/income from operations

(688)

(787)

326

51

(2,198)

(461)

(72)

Add: Share-based compensation

488

294

366

56

830

660

102

Add: Depreciation and amortization

324

277

224

35

615

501

78

Adjusted EBITDA

124

(216)

916

142

(753)

700

108

Adjusted EBITDA margin

4%

-5%

16%

16%

-10%

7%

7%

Net (loss)/income attributable to Trip.com Group Limited

(476)

1,780

(647)

(100)

(5,829)

1,133

175

Add: Share-based compensation

488

294

366

56

830

660

102

Add: (Gain)/loss from fair value changes of equity securities
investments and exchangeable senior notes

(1,194)

(2,367)

1,053

163

1,805

(1,314)

(203)

Add: Tax effects on fair value changes of equity securities investments
and exchangeable senior notes

27

89

(44)

(7)

(182)

45

7

Non-GAAP net (loss)/income attributable to Trip.com Group
Limited

(1,155)

(204)

728

112

(3,376)

524

81

Weighted average ordinary shares outstanding- Diluted-non GAAP *

599,749,816

604,596,792

645,021,131

645,021,131

597,903,192

656,483,984

656,483,984

Non-GAAP Diluted (losses)/income per share *

(1.93)

(0.34)

1.13

0.18

(5.65)

0.80

0.12

Non-GAAP Diluted (losses)/income per ADS *

(1.93)

(0.34)

1.13

0.18

(5.65)

0.80

0.12

Notes for all the condensed consolidated financial schedules presented:

Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.4566 on June 30, 2021 published by the Federal Reserve Board.

Cision View original content:https://www.prnewswire.com/news-releases/tripcom-group-limited-reports-unaudited-second-quarter-and-first-half-of-2021-financial-results-301383778.html

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