Rediff Q3 Revenue Down 4% Sequentially, 23% Y-o-Y; One-time Gain Helps Cut Losses

Rediff Q3 Revenue Down 4% Sequentially, 23% Y-o-Y; One-time Gain Helps Cut Losses

NASDAQ-listed Rediff.com India Ltd, has reported decline in revenues in both the US publishing business as well as India online revenues for the quarter ended December 31, 2011 over the year ago period while sequentially revenues remained almost flat compared to the previous quarter ended September 30.

India online revenues(which includes fee-based and online advertising revenues from its websites) remained at the same level sequentially and declined 7 per cent on a year on year basis in rupee terms.  However, a 14 per cent decline in the Indian Rupee as compared to the US dollar led to 18 per cent decline in India revenue in dollar terms to $3.89 million. Rediff's third quarter US revenues (revenues from the Rediff India Abroad website and from the printed newspapers India Abroad and India in New York) remained at the same level sequentially and declined by 19 per cent on year on year basis to $0.92 million.

Total revenues stood at $4.81 million compared to $5.9 million in Q3 FY11 while net loss shrunk by a third to $1.2 million largely due to a one time gain of $0.75 million from sale of investment during the quarter. Excluding the one time gain, net loss for the quarter ended December 31, 2011 was $1.95 million compared to a net loss of $1.80 million for the same quarter in 2010.

Despite the reduction in revenues, operating EBITDA remained almost at the same level at (-)$1.73 million.

The firm said in its core online advertising business, Rediff continues to be a leading player and commands 34 per cent reach among Indian Internet users, as per ComScore Media Metrix. "Several sectors in which our advertisers operate are going through difficult times, especially the financial services, insurance and telecom sectors. However, we remain positive about the long term growth opportunity presented by the Indian Internet market, and even more so today, based on the broadband and 3G initiatives by both government and industry. While still in the infant stages of deployment, we are seeing increased activity in the market today," the company said.

Rediff said it sees opportunities for growth in adjacent markets and have made investments in some key businesses, namely e-commerce and daily deals, paid mail service for SMEs and local TV advertising.

In the ecommerce and deals market, it said it focusing on service, delivery and operational process improvements.

E-com: The branded products are now visible upfront and discoverable through search and suggest features for ecommerce and it has also activated a toll free number for shoppers.

Deals: Similarly, in the deals business, it is now showcasing 6-8 deals in each of the 42 cities that it operates in. Of the 72 categories, deals in key categories like restaurants, travel, hobby and personal care are grouped together upfront to aide discovery. The deals offered are priced in the Rs 1,000 to Rs 3,000 range and provide 30 per cent to 70 per cent discounts.

Paid mail: In the paid mail business, Rediff has introduced a new product for SMEs which enables them to create a website for their business with a domain name of their choice without any IT support. Additionally, customers can offer email on mobile for their employees while retaining administrative controls, get the email on their business domain among other features like photo sharing, ecommerce enabled site with payment gateway and logistics support.

Local TV: In the local TV advertising business, Rediff provide ads across three TV channels and across 12 multi-system operators or large cable network firms in 7 cities, namely - Mumbai, Delhi, Pune, Ahmedabad, Surat, Bangalore and Baroda - with an average coverage of 70 per cent in these cities.

Commenting on the newer businesses Rediff added that each of the early stage markets requires investments including, manpower and marketing to be able to execute the strategy of positioning Rediff for the future. Its investments in the last few quarters have been aimed at strengthening the sales team and it has added 65 employees to expand the reach across 42 cities for key businesses including online media sales, ecommerce and deals, hosting solutions and local TV advertising.

Rediff said it continues to strengthen the core offerings and the recent launch of Rediff Real Time News Search is a step in this direction. The service delivers fresh, recent results relating to news, people and events as it happens, within minutes of the actual news event taking place and within milliseconds of a query made. This complements Rediff's core online news offering.

The company added that its cash balance stood at $ 25 million, as of December 31, 2011, and it will continue to invest approximately $2.0 - $2.5 million per quarter in its businesses. "With our cash on hand, we believe we have sufficient working capital to meet our immediate liquidity needs and to execute on our strategy, including investments in product development, sales diversification and the entrance into new markets," the company said.

As of September 2011, Rediff's cash balance was $29.4 million, down from $36.92 million in March 2011.

Tags
Rediff.com
Share this Post