Rediff revenue slides 32% to $3.67M in Q1 led by decline in Indian advertising revenue; Net loss widens
NASDAQ-listed Rediff.com has seen its revenue drop almost by a third to $3.67 million for the first quarter ended June 30, 2012 over the year ago period (and 21 per cent sequentially) led by sharp fall in India online advertising revenues. Net loss in the period increased marginally to $2.62 million.
The India online revenues was impacted by continued weakness in the banking, financial services, insurance and consumer electronics industries even as Rediff saw good traction in its ecommerce segment with increase transaction volumes and improved margins, the company said.
Total India revenues, which include online advertising revenues and fee-based revenues, declined 37 per cent over the corresponding quarter last year to $2.79 million. Within fee-based revenues, revenues from online shopping business increased 109 per cent in Rupee terms with a margin of 12 per cent, an increase of 100 basis points over the comparable year-ago period.
India online advertising revenues declined 45 per cent in dollar terms (34 per cent in Rupee terms) compared to the corresponding quarter last year and 34 per cent in dollar terms (28 per cent in Rupee terms) compared to the immediately preceding quarter. This was impacted by 22 per cent decrease in the value of the Indian Rupee vs. the U.S. dollar in the comparable year-over-year periods.
US publishing business also shrunk from $0.97 million to $0.88 million in the same period.
"The interplay of these trends and the effect of a falling Rupee vis-Ã -vis the US dollar is reflected in our results which shows a decline compared to the previous fiscal periods. Our long-term story has not changed and we remain confident that as the Indian broadband market grows and technology and infrastructure improves, Rediff will be well positioned for growth and enhanced bottom-line performance over the long-term," said Ajit Balakrishnan, chairman and CEO of Rediff.com.
Operating expenses for the comparable first quarter periods declined from $4.32 million in 2011 to $3.45 million in 2012, a decrease of approximately 20 per cent. Additionally, its operating EBITDA loss for the quarter ended June 30, 2012 was $2.27 million, compared to an operating EBITDA loss of $2.01 million for the corresponding quarter last year.
Balakrishnan added, "Our advertising clients and prospects are now looking for better, innovative and interactive solutions to their marketing problems, rather than simply paying for cheap online inventory. In response to their needs, we have made changes to our online advertising offerings, initially to some of our key clients, and re-trained our sales team and will now extend these new solutions to all our clients throughout the 23 cities we service today. Additionally, we continue to focus on growing our ecommerce, Local deals, Local TV and Mobile Mail offering, while continuously improving the user experience on the Rediff.com site."