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CDC Corporation H1 2011 Loss Exceeds USD 23 Mln

CDC, 9/02/11

Chinese global enterprise software and new media company CDC Corporation (Nasdaq: CHIND) today announced its financial results for H1 2011. Revenue for H1 2011 rose 1.7% YoY to USD 158.95 mln.

Net loss attributable to the controlling interest for H1 2011 was USD 23.35 mln, compared to USD 11.99 mln in H1 2010.

Revenue from enterprise software subsidiary CDC Software (Nasdaq: CDCS) grew 5.5% YoY to USD 108.76 mln.

Revenue from CDC Global Services was USD 31.13 mln, down 3.4% YoY.

Revenue from CDC Games fell 26.9% YoY to USD 11.03 mln. The decrease in revenue for the first six months of this year was largely attributed to a reduction in the number of games offered and less promotional and marketing spending on existing games, compared to the same period last year. At the end of the first quarter of 2011, CDC Games introduced an expansion pack, "Tyrannis" for its licensed 3D MMORPG EVE Online. On June 30, 2011, CDC Games launched Yulgang 6.0, known as "Blood War," a major new version release of its 3D MMORPG Yulgang. Since the launch of Yulgang 6.0, CDC Games has reported an increase in peak concurrent users (PCU) of more than 10 percent.

For the past several years, CDC Games has experienced significant delays in the continued development and launch of its free-to-play licensed MMORPG Lord of the Rings Online (LOTRO). Since initially licensing this game, CDC Games has invested approximately USD 10 mln in licensing, development and other costs related to it, including a USD 4 mln initial non-refundable license fee. CDC Games has received notification from the game's developer, North American-based game developer Turbine, that the failure to launch LOTRO constituted an event of default under the terms of the licensing agreement. Turbine has also asserted that the license agreement for LOTRO has been terminated. CDC Games is currently in settlement discussions regarding the license for LOTRO, but does not currently believe that settlement discussions will permit it to retain future licensing rights for LOTRO.

Revenue from Chinese internet portal China.com (8006.HK) rose 34% YoY to USD 8.03 mln.

To view CDC's full earnings report, please click here.

Keywords: CDC Games EVE Online free-to-play Lord of the Rings Online Turbine Yulgang enterprise software Internet portal loss revenue software MMORPG CDC Corporation PCU CDC Software expansion pack 8006.HK China.com CDCS CDC Global Services CHIND H1 2011 profit licensed game 3D game online gaming fiscal report

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