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Hit by coronavirus, Trip.com turns a loss with revenues down 42% in Q1

Trip.com predicts a steeper drop in revenue for the second quarter as it refocuses on the domestic Chinese market.

Source: Unspalsh

Trip.com (NASDAQ: TCOM), the world’s largest online travel agency reported Thursday net revenue of RMB 4.7 billion (USD 669 million) during Q1, indicating a 42% year-on-year (YoY) plunge, as the global travel industry reels from the COVID-19 pandemic.

For the first quarter ended March 31, net loss attributable to shareholders was RMB 5.4 billion (USD 754 million), versus 2019’s net income of RMB 4.6 billion (USD 643 million). The non-GAAP net loss was USD 312 million YoY.

The Shanghai-based company’s stock slipped in after-hours trading session by 4.3% to USD 24.25 per share, although the revenue result beat Bloomberg analysts’ consensus.

“The COVID-19 pandemic has brought significant challenges to the global travel industry,” said Trip.com’s executive chairman James Liang in the statement. “However, it is encouraging that by now, we have seen stabilization or recovery of travel activities in many of the markets where we operate.”

In the short term, Trip.com will focus on its domestic market, as travel picks up within China while cross-border trips face a slew of cancellations and restrictions, Liang said in a recent interview with local tech media outlet 36Kr.

In the reviewed quarter, Trip.com’s revenue from accommodation reservations was down by 62% YoY, or 61% QoQ, to RMB 1.2 billion (USD 163 million). Transportation ticketing revenue was RMB 2.4 billion (USD 338 million) with a YoY decrease of 29%, packaged-tour revenue declined by 50% to RMB 523 million (USD 74 million), and the revenue of the corporate travel segment also shrank 47% YoY to RMB 126 million (USD 18 million).

As of March 31, the company’s balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposits and financial products was RMB 68.2 billion (USD 9.6 billion). The firm said its cash flow and reverse will be sufficient to cope with the further impact of the coronavirus.

Trip.com’s CEO Jane Sun said on March 19 that the company had already processed millions of cancellations since the outbreak began, amounting to a total transaction value of over RMB 31 billion (USD 4.38 billion).

In a bid to boost the firm’s business, Liang began livestreaming to promote products. His first livestream on March 23 attracted more than 510,000 viewers, generating more than RMB 10 million (USD 1.4 billion)  in sales, KrASIA reported.

The company predicts net revenues to decrease by approximately 67% to 77% YoY for the second quarter of 2020.