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The Chinese Internet portal Sina.com took a big step towards total profitability with the achievement of a pro forma profit of US$241,000 in the first quarter of its 2003 fiscal year.
"We are very pleased that Sina saw record growth in revenues, gross margins and profitability," said Daniel Mao, chief executive officer of the Internet company, at a press conference on its financial results yesterday.
The busines announced that Sina had, by the end of September, made its first pro forma profit of US$241,000, compared with a loss of US$2.9 million last year.
At the same time, its net losses were also cut by 89 per cent to US$559,000 in the period.
The NASDAQ-listed Internet portal also witnessed record high revenues of US$10 million during the past quarter.
Although Sina's main advertising driving force- the FIFA World Cup - ended in June and some analysts doubted its ability to maintain a steady growth of online advertising, the company beat the market estimation with US$6.5 million, up 11 per cent from the fourth quarter of its 2002 fiscal year.
"It is very exciting that we achieved such a growth without big events like the World Cup and we even expanded our lead over our major competitors," said Wang Yan, Sina.com's president.
Mobile communications services like short messaging services (SMS) and enterprise-targeted Sina.net were the two biggest factors in Sina's growth in the past quarter.
Its non-advertising revenues tripled year-on-year to US$3.9 million, mainly due to SMS and Sina.net.
The portal had US$95.6 million in cash reserves in the time period, US$2.5 million more than the previous quarter.
The company also launched a wireless dating service, which attracted more than 200,000 subscribers in less than two months.
Sina.com also plans to change the ending of its fiscal year from June to December.
The portal also announced that its director, Pehong Chen, had resigned from the audit committee of the board to be replaced by Yichen Zhang, deputy CEO of CITIC Capital in Hong Kong.
Sina's stocks rose by 9 per cent on Monday at US$3.14.
Sina's performance in the last quarter was greeted by the praise of a number of Chinese analysts.
Lu Weigang, a Beijing-based Internet analyst, believed that net profits for Sina will not be mere speculation this quarter.
He said the improvement of the environment for Internet businesses in China, especially growing awareness of the importance of online advertising and the successful use of SMS, are two most important factors for the growth of Sina and its counterparts on the NASDAQ stock market - Netease and Sohu.
Netease, which had achieved net profits in the second quarter of this year, will also announce its financial results for the third quarter today.
(China Daily November 6, 2002)
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