Fang Holdings Limited releases Q1 2019 results

Fang Holdings Limited, a leading real estate Internet portal in China, has recently announced its unaudited financial results for the first quarter ended March 31, 2019.

First Quarter 2019 Highlights

• Total revenues were $51.9 million.
• Operating loss was $2.0 million. Non-GAAP income from operations was $0.04 million. A description of the adjustments from GAAP to non-GAAP operating income is detailed in the table captioned "Reconciliation of GAAP and Non-GAAP Results" following this press release.
• Net income attributable to Fang's shareholders was $13.4 million, which was primarily due to gains from the change in fair value of equity securities of $32.1 million, offset by the income tax expense of $12.6 million and interest expenses of US$6.0 million. Earnings per ADS was $0.03.
• Non-GAAP net loss attributable to Fang's shareholders was $9.9 million. Non-GAAP net loss per ADS was $0.03. A description of the adjustments from GAAP net income to non-GAAP net loss attributable to Fang's shareholders and fully diluted income per ADS is detailed in the table captioned "Reconciliation of GAAP and Non-GAAP Results" following this press release.
• Adjusted EBITDA was $6.9 million. A description of the adjustments from GAAP net income to Adjusted EBITDA is detailed in the table captioned "Reconciliation of GAAP and Non-GAAP Results" following this press release.

"China Index Holdings was successfully spun off from Fang and listed on NASDAQ," commented Jian Liu, CEO of Fang. "Fang will now focus more on its core internet advertising, listing, and leads business lines which are expected to grow for the year of 2019."

Fang completed the separation of its wholly-owned subsidiary, China Index Holdings Limited on June 11, 2019, and the presentation of Fang's unaudited financial results for the first quarter ended March 31, 2019 in this press release does not take into account the separation of CIH and its associated business and results of operations.

First Quarter 2019 Results

Revenues

Fang reported total revenues of $51.9 million in the first quarter of 2019, a decrease of 19.8% from $64.7 million in the corresponding period of 2018, mainly due to the decline in revenues from listing and e-commerce services.  

Revenue from marketing services was $17.2 million in the first quarter of 2019, which was stable compared to $17.3 million in the corresponding period of 2018.

Revenue from listing services was $21.4 million in the first quarter of 2019, a decrease of 20.1% from $26.7 million in the corresponding period of 2018, caused by the decreased number of paying members of listing services.

Revenue from value-added services was $8.7 million in the first quarter of 2019, an increase of 3.1% from $8.4 million in the corresponding period of 2018.

Revenue from financial services was $3.5 million in the first quarter of 2019, a decrease of 30.8% from $5.1 million in the corresponding period of 2018, mainly due to the decrease in average loan receivable balances.

Revenue from e-commerce services was $1.1 million in the first quarter of 2019, a decrease of 84.9% from $7.2 million in the corresponding period of 2018, primarily due to Fang's transformation back to a technology-driven open platform model.

Cost of Revenue

Cost of revenue was $11.5 million in the first quarter of 2019, a decrease of 44.4% from $20.6 million in the corresponding period of 2018, primarily due to optimization in our cost structure.

Operating Expenses

Operating expenses were $42.4 million in the first quarter of 2019, a decrease of 11.8% from $48.0 million in the corresponding period of 2018.

Selling expenses were $18.6 million in the first quarter of 2019, an increase of 12.9% from $16.4 million for the corresponding period of 2018, primarily driven by an increase in advertising and promotional expenses.

General and administrative expenses were $23.9 million in the first quarter of 2019, a decrease of 24.0% from $31.5 million for the corresponding period of 2018, caused by decrease in bad debts and staff costs.

Operating Loss

Operating loss was $2.0 million in the first quarter of 2019, compared to operating loss of $3.9 million in the corresponding period of 2018, caused by the decline of operating expenses.

Change in fair value of securities

Change in fair value of securities for the first quarter of 2019 was a gain of $32.1 million, compared to a loss of $42.2 million in the corresponding period of 2018, and the fluctuation was due to the increase in the market price of investment in equity securities.

Income Tax Expenses

Income tax expenses were $12.6 million in the first quarter of 2019, compared to income tax benefit of $4.2 million in the corresponding period of 2018.

Net Income/Loss and EPS

Net Income attributable to Fang's shareholders was $13.4 million in the first quarter of 2019, compared to net loss of $44.9 million in the corresponding period of 2018. Income per ordinary share and ADS were $0.15 and $0.03 in the first quarter of 2019, compared to loss of $0.51 and $0.10, respectively, in the corresponding period of 2018.

Adjusted EBITDA

Adjusted EBITDA, defined as GAAP net income before share-based compensation, investment income, realized gain on sale available-for-sale securities change in fair value of securities, income taxes, interest expenses, interest income and depreciation and amortization, was $6.9 million in the first quarter of 2019, compared to the $7.1 million in the corresponding period of 2018.

Cash

As of March 31, 2019, Fang had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $477.1 million, compared to $463.6 million as of December 31, 2018.

Business Outlook

Based on current operations and market conditions, Fang's non-GAAP net income is expected to be profitable for the fiscal year ending December 31, 2019. These estimates represent management's current and preliminary view, which are subject to change.

SOURCE Fang Holdings Limited

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