OnMobile's domestic revenues slump 31.8% in Q2; profit declines due to LiveWire losses
The country's largest mobile value added service (VAS) firm OnMobile Global saw a sharp decline in net profit for the second quarter as operating performance deteriorated due to recent acquisition of LiveWire and a decline in domestic revenues.
The company reported net revenues of Rs 225 crore, up 25.2 per cent over the year-ago period and a 18.6 per cent rise from the previous quarter ended June 30.
The international business grew 65.1 per cent to Rs 174.5 crore, partly due to the addition of LiveWire into its operations. International revenue was primarily driven by North America (upon consolidation of LiveWire) and Europe. International revenues contributed 78 per cent of net revenues, up from 59 per cent in the same period last year. Excluding LiveWire, net revenues were up 15.1 per cent to Rs 206.9 crore. The firm had completed the acquisition of US-based VAS firm LiveWire during last quarter.
However, the domestic business performed poorly. It saw a 31.8 per cent fall in revenues due to the implementation of TRAI Consent Gateway guidelines.
On a sequential basis, international revenues increased 39.3 per cent compared with Q1 FY14 while India revenues declined by 21.5 per cent in the same period.
From an earnings perspective, EBITDA declined by 3.6 per cent to Rs 33.5 crore on account of loss of Rs 2.4 crore of LiveWire. Net profit declined from Rs 6.2 crore to Rs 1.5 crore on account of net loss of Rs 8.5 crore of LiveWire.
Excluding LiveWire, EBITDA increased 3.3 per cent to Rs 35.9 crore and adjusted for one-time expenses, EBITDA rose 12.5 per cent. Net profit increased by 60.9 per cent to Rs 10 crore.
On a sequential basis, EBITDA declined by a fifth to Rs 33.5 crore while net profit declined from Rs 14.1 crore to Rs 1.5 crore on account of net loss of Rs 8.5 crore reported by LiveWire.
From an operations standpoint, it migrated ring back tones (RBT) in another large operator in Spain. With this, OnMobile will reach over 90 per cent mobile subscriber base in Spain.
It also launched RBT services with an operator in Qatar.
The firm, which has been hit by corporate governance issues related to its co-founder and former chief, further strengthened its board by appointing two independent directors.
(Edited by Joby Puthuparampil Johnson)