NASDAQ-listed Rediff.com has seen its revenue drop by almost a fifth to $4.64 million for the fourth quarter ended March 31, 2012 over the year ago period (and 4 per cent sequentially) led by 25 per cent decline (in dollar terms) in India online advertising revenues (16 per cent in rupee terms) on a year-over-year basis (7 per cent in dollar terms and 8 per cent in rupee terms sequentially).
Total India revenue, which includes fee-based and online advertising revenues, declined 23 per cent in dollar terms (14 per cent in rupee terms) and 4 per cent in dollar terms (6 per cent in rupee terms) for the same respective periods. India Online revenues were impacted by 11 per cent due to foreign currency fluctuations as the Indian rupee weakened vs the US dollar.
The Banking, Financial Services and Insurance (BFSI) sector, which accounts for a third of online display ad spends in India has reduced its spending in the quarter ended March 31, 2012, resulting in a decline in India online advertising revenues in the quarter. Other sectors, most notably the FMCG, auto and consumer electronics segment re-allocated advertising spend during the quarter from TV and print to online, though the increase was not enough to make up for a decline in spend in the BFSI sector, the company said.
While advertising revenue was down, Rediff reported 68 per cent year-over-year increase in ecommerce revenues, maintaining 11 per cent gross margin. "The growth in ecommerce revenues is attributed to our continued investments to improve search and browse functionalities, an addition of a voice based call-centre support and improvements in the efficiency of third-party logistics system. Lastly, we continue to invest in our Local Deals and Local TV ads businesses, which hold much long-term promise, but remain in the initial stages of growth," Rediff said.
Rediff scrip rose 2.4 per cent in early morning trades on NASDAQ after the results announcement.
The company's EBITDA improved by 7 per cent in dollar terms on a year-over-year basis and gross margins increased approximately 100 basis points over the fiscal fourth quarter last year and approximately 200 basis points sequentially. The operating EBITDA loss for the quarter ended March 31, 2012 was lower, at $1.20 million, as compared to an operating EBITDA loss of $1.29 million for the corresponding quarter last year.
But, for the full year ended March 31, 2012, Rediff's net loss widened 15 per cent to $7.55 million and total revenues decline 8.5 per cent to $19.94 million, with decline in both India online revenues and US publishing segment.