Chinese travel service provider Inc said it posted an unaudited third quarter net loss of 40.5 mln yuan, compared with a net loss of 723,000 yuan a year ago.

The net loss was due to a one-off non-cash writedown of goodwill and intangibles of 17.5 mln yuan relating to the acquisition of Ray Time in November 2004 and an unrealized foreign exchange loss of 23.4 mln yuan due to the revaluation of the yuan in July, the company said in a statement.

The foreign exchange loss was partly offset by interest income of 8.4 mln yuan.

The Nasdaq-listed company said total revenues increased 56 pct year-on-year to 59.4 mln yuan from 38 mln yuan in the same period last year.

In the fourth quarter, eLong expects to see total revenues of between 59 mln yuan and 62 mln yuan.

Excluding the impact of the writedown in goodwill and intangibles in the third quarter, the company also said it expects its operating loss to increase in the fourth quarter as it continues to invest in its businesses.

Hotel commissions per room night were RMB62 in the third quarter of 2005, up 11% from RMB56 in the corresponding period a year ago and up 3% from RMB60 in the second quarter.

As of September 30, 2005, eLong offered its customers a choice of hotel rooms at discounted rates in almost 3,000 hotels in 280 cities across China as compared to almost 2,800 hotels in 230 cities at the end of the second quarter of 2005.

Revenues from air ticketing during the third quarter of 2005 totaled RMB7.5 million, an increase of 121% from RMB3.4 million year-over-year, and an increase of 50% from RMB5.0 million sequentially. Volume in air ticket sales continued to grow with 198,000 air tickets sold in the third quarter, more than double the air tickets sold in the corresponding period a year ago and 47% higher than the 135,000 sold in the second quarter.

Other travel revenue in the third quarter of 2005 was RMB4.0 million, an increase from RMB322,000 year-over-year, and a decrease of 22% from RMB5.1 million sequentially.

Gross margins in the third quarter were 80% as compared to 82% in the corresponding period a year ago and 78% in the second quarter.

Sales and marketing expenses were RMB26.2 million in the third quarter of 2005, an increase of 38% from RMB19.0 million year-over-year, and remained almost flat from RMB26.1 million in the second quarter.