MakeMyTrip reports $5.2M loss in Q3, decline in commission stumps air ticketing revenues
NASDAQ-listed online travel services firm MakeMyTrip (MMT) reported 5.5 per cent decline in its revenues less service costs which stood at $22.3 million for the third quarter ended December 31, 2012 over the year-ago period. The OTA also saw pressure on its bottom-line with net loss of $5.2 million against a marginal net profit in Q3 FY12. Overall revenues, however, rose 18.6 per cent to $63.8 million.
Decline in revenues less service costs (a crucial metric for OTAs) was led by sharp fall in sales from its key revenue earner air ticketing, which declined 22 per cent (17.2 per cent in constant currency) to $13.5 million.
Hotels and packages, which has higher margins but is smaller contributor of revenues, saw 47 per cent growth (52.4 per cent in constant currency) to $7.8 million. Other businesses comprising train ticketing and bus ticking recorded marginal growth.
"MakeMyTrip has gained significant market share in both the air ticketing and hotels and packages business during this past high season quarter," said Deep Kalra, chairman and CEO of MakeMyTrip.
Air Ticketing: Revenue from air ticketing business decreased by 33.7 per cent (29 per cent in constant currency) to $14.3 million in the quarter ended December 31, 2012 from $21.6 million in the quarter ended December 31, 2011. Revenue less service costs decreased by 22 per cent to $13.5 million in the quarter. The materially higher airfares caused the gross bookings to grow by 31.1 per cent (38.4 per cent in constant currency) year on year but the decline in revenue less service costs was mainly due to decrease in net revenue margin to 5.3 per cent from 9 per cent a year ago, mainly due to reduction in airline commission.
Hotels and Packages: Revenue from hotels and packages business increased 55.2 per cent (61.3 per cent in constant currency) to $48.6 million in the quarter. Its revenue less service costs increased by 47 per cent (52.4 per cent in constant currency) to $7.8 million including contribution from Hotel Travel Group that it acquired last quarter. This was due to increase in gross bookings by 61.1 per cent (67.2 per cent in constant currency) which was partly offset by decrease in net revenue margin from 12.1 per cent in the quarter ended December 31, 2011 to 11.1 per cent in the quarter ended December 31, 2012.
Other Revenue: Other revenue inched up to $1 million in the quarter ended December 31, 2012 from $0.9 million in the quarter ended December 31, 2011, primarily due to increases in the sale of online bus tickets and miscellaneous income, but was partially offset by decrease in sale of rail tickets.
(Edited by Prem Udayabhanu)