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MakeMyTrip Limited Announces Strong Fiscal 2011 Second Quarter Results

Financial Highlights

  • Gross bookings (1) for Air ticketing and Hotels and packages combined increased by $51.2 million to $156.0 million, representing growth of 48.8% year over year.
  • Revenue increased by 40.5% year over year to $23.8 million. Revenue less service cost (2) increased by $3.8 million to $12.9 million, representing a growth of 41.5% year over year.
  • Net revenue margin (3) for Air ticketing was 7.4% and Hotels & packages net revenue margin was 11.9%.
  • Result from operating activities improved to $0.33 million, an increase of $0.15 million from the prior year's fiscal second quarter. Adjusted operating profit (4) improved to $0.48 million versus $0.18 million in the prior year's fiscal second quarter.
  • Loss for the period was $1.8 million, versus profit of $0.02 million in the prior year's fiscal second quarter. Adjusted net income (5) was $0.58 million, representing an increase of $0.30 million from the prior year's fiscal second quarter.

GURGAON, India and NEW YORK, Nov. 15, 2010 (GLOBE NEWSWIRE) -- MakeMyTrip Limited (Nasdaq:MMYT), India's leading online travel company, today announced its unaudited financial and operating results for its second fiscal quarter ended September 30, 2010. This is the company's first post-IPO publicly announced quarter. MakeMyTrip Limited successfully completed its initial public offering on August 17, 2010. The company is listed on the NASDAQ Global Market under the symbol "MMYT". "Our strong operating results in the latest quarter were achieved through the recognition of MakeMyTrip as a superior brand that offers innovative travel products and excellent customer booking experience in India's online travel market," said Deep Kalra, Chairman and CEO of MakeMyTrip. "Additionally, our successful initial public offering now provides MakeMyTrip with the ability to keep growing by investing in technology and strategic acquisitions that will enhance customers' experience and create long term shareholder value."

(in thousands except EPS) 3 Months Ended September 30, 2009 3 Months Ended September 30, 2010 YoY Change
Financial Summary as per IFRS    
Revenue $16,964.4 $23,828.4 40.5%
Revenue Less Service Cost (2) $9,095.4 $12,867.9 41.5%
Air Ticketing $7,326.8 $10,280.7 40.3%
Hotels & Packages $1,526.8 $2,060.2 34.9%
Other $241.8 $527.1 118.0%
Results from Operating Activities  $178.4 $325.2 82.4%
Adjusted Operating Profit (4) $178.4 $479.4 168.8%
Income (Loss) for the period  $19.1 ($1,795.7)  
Adjusted Net Income (Loss) (5) $282.1 $579.0 105.2%
Earning (Loss) per share $0.001 ($0.07)  
Adjusted Diluted Earning (Loss) per share (5) $0.01 $0.02  
       
Operating Metrics      
Gross Bookings $104,807.1 $155,988.0 48.8%
Air Ticketing $94,208.8 $138,613.3 47.1%
Hotels & Packages $10,598.3 $17,374.7 63.9%
Transactions      
Air Ticketing 460.8 620.9 34.7%
Hotels & Packages 22.2 31.4 41.3%
       
(1) Represents the total amount paid by our customers for the travel services and products booked through us, including taxes, fees and other charges, and are net of cancellations and refunds
(2) Represents IFRS revenue after deducting service costs. 
(3) Revenue less service cost as a percentage of gross bookings.
(4) Results from operating activities excluding employee share-based compensation costs.
(5) Profit (loss) for the period excluding employee share-based compensation costs, one time IPO costs relating to listing of existing shares, interest expense on the liability portion of preference shares and changes in the fair market value of embedded derivatives in the preference shares. 

Please see "About Non-IFRS Financial Measures" included within this release to understand the importance of the financial measures set forth in notes (2) to (5) above. Reconciliations of non-IFRS financial measures to IFRS operating results are included at the end of this release. 

Fiscal 2011 Second Quarter Financial Results

Revenue. We had revenue of $23.8 million in the quarter ended September 30, 2010, an increase of 40.5% over revenue of $17.0 million in the quarter ended September 30, 2009.

Air Ticketing. Revenue from our air ticketing business increased by 40.1% to $10.3 million in the quarter ended September 30, 2010 from $7.3 million in the quarter ended September 30, 2009. This was due to increase in gross bookings by 47.1% partially offset by reduction in net revenue margin from 7.8% in the quarter ended September 30, 2009 to 7.4% in the quarter ended September 30, 2010. Air ticketing net revenue margin in the quarter improved by 60 basis points from 6.8% in the previous quarter as our air bookings increased quarter to quarter, resulting from volume-related incentives from airlines, and increases in service fees and global distribution fees collected.

Hotels and Packages. Revenue from our hotels and packages business increased by 38.8% to $13.0 million in the quarter ended September 30, 2010 from $9.4 million in the quarter ended September 30, 2009. Our Revenue less service cost (2) increased by 34.9 % to $2.1 million in the quarter ended September 30, 2010 from $1.5 million in the quarter ended September 30, 2009. This was due to increase in gross bookings by 63.9% partially offset by reduction in net revenue margin from 14.4% in the quarter ended September 30, 2009 to 11.9% in the quarter ended September 30, 2010 as net revenue margins normalized from levels experienced in fiscal 2010 when travel suppliers provided us favorable rates during the slowdown in India's economy. Hotels & packages net revenue margins remained unchanged at 11.9% quarter to quarter.

Other Revenue. Our other revenue increased by 118.0% to $0.5 million in the quarter ended September 30, 2010 from $0.2 million in the quarter ended September 30, 2009, primarily due to increase in sale of rail tickets.

Total Revenue less Service Cost. Our total revenue less service cost increased by 41.5% to $12.9 million in the quarter ended September 30, 2010 from $9.1 million in the quarter ended September 30, 2009 as a result of a 40.3% increase in our air ticketing revenue less service cost, as well as a 34.9% increase in our hotels and packages revenue less service cost.

Personnel Expenses. Personnel expenses increased to $3.4 million in the quarter ended September 30, 2010 from $2.4 million in the quarter ended September 30, 2009, mainly as a result of annual wage increases and increases in average employee headcount year over year in the quarter ended September 30, 2010 as a result of overall increase in business and due to employee share-based compensation costs of $0.2 million in quarter ended September 30, 2010 as against $0 in quarter ended September 30, 2009.

Other Operating Expenses. Other operating expenses increased by 42.8% to $8.7 million in the quarter ended September 30, 2010 from $6.1 million in the quarter ended September 30, 2009, primarily as a result of increase in payment gateway charges, advertising and business promotion expenses and outsourcing fees in line with the growth in our business.

Results from Operating Activities. As a result of the foregoing factors, our results from operating activities improved to an income of $0.3 million in the quarter ended September 30, 2010 from an income of $0.2 million in the quarter ended September 30, 2009. Excluding the effects of our employee share-based compensation costs for both quarters ended September 30, 2010 and 2009, we would have recorded an operating profit of $0.5 million in the quarter ended September 30, 2010 and $0.2 million in the quarter ended September 30, 2009.

Finance Costs. Our finance costs increased to $2.5 million in the quarter ended September 30, 2010 from $0.6 million in the quarter ended September 30, 2009, primarily due to one-time initial public offering costs related to our listing of existing shares of $2.1 million in the current quarter, partially offset by decrease in foreign exchange loss due to strengthening of the Indian rupee versus US dollar.

Profit (Loss) for the period. As a result of the foregoing factors, including the effects of our employee share-based compensation costs and a one-time charge related to the listing of our existing shares in our initial public offering of $2.1 million in the current quarter, our loss for the quarter ended September 30, 2010 was $1.8 million as compared to a profit of $0.02 million in the quarter ended September 30, 2009.  Excluding the effects of employee share-based compensation costs for both fiscal years 2010 and 2009, the one-time charge related to the listing of our existing shares in our initial public offering of $2.1 million in the current quarter, interest accrued on the liability portion of preference shares and changes in fair market value of embedded derivatives in the preference shares, we would have recorded a net profit of $0.6 million in the quarter ended September 30, 2010 and a net profit of $0.3 million in quarter ended September 30, 2009.

Earnings (loss) per share. Diluted loss per share was $0.07 for the quarter ended September 30, 2010 as compared to earnings per share of $0.001 in the corresponding quarter in the prior fiscal year. The loss in the current quarter was mainly as a result of interest accrued on the liability portion of preference shares, one time charges related to our initial public offering listing expenses of $2.1 million, employee share-based compensation costs as mentioned in the preceding paragraph and increase of 12.3 million shares primarily from conversion of all outstanding preferred shares prior to our initial public offering and share option exercise by certain selling shareholders at the time of the offering. Adjusted for these items, diluted earnings per share was $0.02 in the quarter ended September 30, 2010, compared to $0.01 in the quarter ended September 30, 2009.

Contingencies

During the year ended March 31, 2009, a general industry wide audit was initiated by the Mumbai Zonal Unit of Directorate General of Excise Intelligence & Customs (regulatory authority) on various travel agencies across India with regard to compliance with service tax rules and regulations by travel companies in India. Pursuant to the audit conducted by the service tax authorities, the company received a notice during the quarter ended September 30, 2010 relating to a demand of service tax on certain matters, some of which are industry-wide issues and involve complex interpretation of law. Based on legal advice received, the company believes that it has a strong case in its favor and is in the process of preparing an appropriate response to the notice issued by the service tax authorities. However, at present no reliable estimate can be made of the amount of the obligation, if any.

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