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.

Fiscal Year 2011 Outlook

The company's long term outlook is optimistic. MakeMyTrip expects fiscal year 2011's revenue less service cost to be between $58 million and $61 million.

Deep Kalra, CEO and Founder, said "We believe MakeMyTrip is well positioned to capture the long term growth in travel services that comes with the growing Indian economy and its middle class. The expected roll out of broadband Internet services throughout the country will only continue to drive the popularity of e-commerce which will benefit online travel companies like MakeMyTrip for many years to come."

Conference Call

MakeMyTrip will host a conference call to discuss the company's results for the quarter ended September 30, 2010 beginning at 10:00 a.m. EST on November 15, 2010. To participate, please dial 1-866-242-1388 from within the U.S. or +65-6722-6342 from any other country. Thereafter, callers will be prompted to enter the participant passcode 20831925. A live webcast of the conference call will also be available through the Investor Relations section of the company's website at http://investors.makemytrip.com.

A telephonic replay of the conference call will be available for one week by dialing 1-866-214-5335 in the U.S. or by dialing +61 2 8235 5000 from any other country and using passcode 20831925. A one month replay of the live webcast will also be available at http://investors.makemytrip.com, shortly following the conclusion of the call.

About Non-IFRS Financial Measures

As certain parts of our revenues are recognized on a "net" basis and other parts of our revenue are recognized on a "gross" basis, we evaluate our financial performance based on revenue less service costs, which is a non-IFRS measure, as we believe that revenue less service cost reflects more accurately the value addition of the travel services that we provide to our customers. The presentation of this non-IFRS information is not meant to be considered in isolation or as a substitute for our consolidated financial results prepared in accordance with IFRS as issued by the IASB. Our revenue less service costs may not be comparable to similarly titled measures reported by other companies due to potential differences in the method of calculation.

The company believes that Adjusted operating profit and Adjusted net income are useful in measuring the results of the company. The IFRS measures most directly comparable to Adjusted operating profit and Adjusted net income are Results from operating activities and Income (Loss) for the period, respectively. The company believes that adjustments to these IFRS measures, including employee stock compensation costs, interest accretion on preference stock, one-time expenses such as IPO listing fees and gain or loss in fair market value of the embedded options within preference stock, provide investors and analysts a more accurate representation of the company's operating results.

Safe Harbor Statement

This release contains certain statements concerning the Company's future growth prospects and forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the company's current expectations, assumptions, estimates and projections about the company and its industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate," "believe," "estimate," "expect," "intend," "will," "project," "seek," "should" and similar expressions. Such statements include, among other things, quotations from management as well as MakeMyTrip's (MMYT) strategic and operational plans. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the slow-down of economic growth in India and the global economic downturn, general declines or disruptions in the travel industry, volatility in the trading price of MMYT's shares, MMYT's reliance on its relationships with travel suppliers and strategic alliances, failure to further increase MMYT's brand recognition to obtain new business partners and consumers, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in India and overseas, failure to successfully develop MMYT's corporate travel business, damage to or failure of MMYT's infrastructure and technology, loss of services of MMYT's key executives, and inflation in India and in other countries. These and other factors are more fully discussed in the "Risk Factors" section of MMYT's prospectus dated August 11, 2010, filed with the U.S. Securities and Exchange Commission. All information provided in this release is provided as of the date of issuance of this release, and MMYT does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About MakeMyTrip Limited and MakeMyTrip.com

MakeMyTrip Limited is the parent company of MakeMyTrip (India) Private Limited, India's largest online travel company and MakeMyTrip.com Inc. The company's services and products include air tickets, customized holiday packages, hotel bookings, railway tickets, bus tickets, car hire and facilitating access to travel insurance. Through its primary website, www.makemytrip.com, and other technology-enhanced platforms, the company provides access to all major domestic full-service and low-cost airlines operating in India, all major airlines operating to and from India, over 4,000 hotels in India and a wide selection of hotels outside India, Indian Railways and several major Indian bus operators.
 
MAKEMYTRIP LIMITED UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
     
 

As at March 31, 2010

As at September 30, 2010
(in USD)
Assets
Property, plant and equipment 3,748,180 3,870,429
Intangible assets 2,024,059 1,690,566
Trade and other receivables 413,488 464,064
Term deposits 1,295,489 1,517,576
Other non-current assets 124,126 115,505
Total non-current assets 7,605,342 7,658,140
 
Current tax assets 942,543 1,942,796
Trade and other receivables, net 12,036,039 13,679,800
Term deposits 13,175,915 14,800,805
Other current assets 7,532,087 10,814,327
Cash and cash equivalents 9,341,526 65,202,986
Total current assets 43,028,110 106,440,714
Total assets 50,633,452 114,098,854
 
Equity (Deficit)
Share capital 8,767 17,417
Share premium 11,356,522 110,381,639
Accumulated deficit (42,510,416 ) (43,029,888 )
Share based payment reserve 7,061,910 4,712,101
Foreign currency translation reserve (872,218 ) (762,661 )
Total equity (deficit) attributable to equity holders of the Company (24,955,435 ) 71,318,608
Non-controlling interest 4,390 4,774
Total equity (deficit) (24,951,045 ) 71,323,382
 
Liabilities
Loans and borrowings 132,103 175,173
Employee benefits 437,444 515,768
Deferred income 1,852,679 1,418,964
Derivatives 48,382 --
Other non-current liabilities 447,295 490,239
Total non-current liabilities 2,917,903 2,600,144
 
Bank overdraft 3,996,066 8,222,523
Loans and borrowings 40,834,795 64,106
Trade and other payables 26,467,047 29,869,233
Deferred income 814,516 905,687
Other current liabilities 554,170 1,113,779
Total current liabilities 72,666,594 40,175,328
Total liabilities 75,584,497 42,775,472
Total equity and liabilities 50,633,452 114,098,854
 

 
       
MAKEMYTRIP LIMITED UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
For the three months ended September 30 For the six months ended September 30
2009 2010 2009 2010
(in USD)
Revenue
Air ticketing 7,338,839 10,280,659 15,155,500 20,270,185
Hotels and packages 9,383,824 13,020,721 23,941,950 36,243,065
Other revenue 241,783 527,069 494,008 1,037,982
Total revenue 16,964,446 23,828,449 39,591,458 57,551,232
 
Service cost
Procurement cost of hotel and packages services 7,856,997 10,960,564 20,217,398 30,824,182
Purchase of air tickets coupon 12,023 -- 771,503 --
Personnel expenses 2,419,140 3,357,443 11,194,050 6,813,045
Other operating expenses 6,115,025 8,731,378 12,111,601 17,426,625
Depreciation and amortization 382,896 453,815 747,417 902,815
Result from operating activities 178,365 325,249 (5,450,511 ) 1,584,565
 
Finance income 396,035 357,497 979,429 726,718
Finance costs 555,300 2,478,408 1,092,156 2,795,541
Net finance costs (159,265 ) (2,120,911 ) (112,727 ) (2,068,823 )
 
Profit (Loss) before tax 19,100 (1,795,662 ) (5,563,238 ) (484,258 )
Income tax expense -- -- (3,385 ) (1,209 )
Profit (Loss) for the period 19,100 (1,795,662 ) (5,566,623 ) (485,467 )
 
Other comprehensive income (loss)
Foreign currency translation differences on foreign operations 76,306 565,566 754,364 109,576
Defined benefit plan actuarial losses -- (33,640 ) -- (33,640 )
Other comprehensive income (loss) for the period, net of tax 76,306 531,926 754,364 75,936
Total comprehensive income (loss) for the period 95,406 (1,263,736 ) (4,812,259 ) (409,531 )
 
Profit (Loss) attributable to:
Owners of the Company 18,923 (1,795,736 ) (5,565,910 ) (485,837 )
Non-controlling interest 177 74 (713 ) 370
Profit (Loss) for the period 19,100 (1,795,662 ) (5,566,623 ) (485,467 )
 
Total comprehensive income (loss) attributable to:
Owners of the Company 95,235 (1,263,902 ) (4,811,676 ) (409,915 )
Non-controlling interest 171 166 (583 ) 384
Total comprehensive income (loss) for the period 95,406 (1,263,736 ) (4,812,259 ) (409,531 )
 
Earnings (Loss) per share
Basic 0.001 (0.07 ) (0.32 ) (0.02 )
Diluted   0.001     (0.07 )   (0.32 )   (0.02 )
 

MAKEMYTRIP LIMITED UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
               
Attributable to equity holders of the Company
 
(in USD)

Share capital

Share premium

Accumulated deficit

Share based payment reserve

Foreign currency translation reserve

Total

Non-controlling interest

Total equity (deficit)
 
Balance as at April 1, 2010 8,767 11,356,522 (42,510,416 ) 7,061,910 (872,218 ) (24,955,435 ) 4,390 (24,951,045 )
Total comprehensive income (loss) for the period
Profit/ (Loss) for the period -- -- (485,837 ) -- -- (485,837 ) 370 (485,467 )
 
Other comprehensive income (loss)
Foreign currency translation differences -- -- -- -- 109,557 109,557 19 109,576
Defined benefit plan actuarial gains (losses), net of tax -- -- (33,635 ) -- -- (33,635 ) (5 ) (33,640 )
Total other comprehensive income (loss) -- -- (33,635 ) -- 109,557 75,922 14 75,936
Total comprehensive income (loss) for the period -- -- (519,472 ) -- 109,557 (409,915 ) 384 (409,531 )
 
Transactions with owners, recorded directly in equity
Contributions by owners
Share-based payment -- -- -- 307,060 -- 307,060 -- 307,060
Issue of ordinary shares on exercise of share options 411 3,805,929 -- (2,656,869 ) -- 1,149,471 -- 1,149,471

Convertible and redeemable preference shares converted to ordinary shares at initial public offering
6,162 41,179,783 -- -- -- 41,185,945 -- 41,185,945
Issue of ordinary shares through initial public offering, net of issuance costs 2,077 54,039,405 -- -- -- 54,041,482 -- 54,041,482
Total contributions by owners 8,650 99,025,117 -- (2,349,809 ) -- 96,683,958 -- 96,683,958
 
Balance as at September 30, 2010   17,417   110,381,639   (43,029,888 )   4,712,101     (762,661 )   71,318,608     4,774     71,323,382  
 
   
MAKEMYTRIP LIMITED UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
 

For the six months ended September 30
2009 2010
(in USD)
Profit/(loss) for the period (5,566,623 ) (485,467 )
Adjustments for Non Cash Items 7,484,316 3,285,872
Change in working capital 2,563,166 (4,775,488 )
Net cash from (used in) operating activities 4,480,859 (1,975,083 )
Net cash from (used in) investing activities 5,269,350 (525,457 )
Net cash from (used in) financing activities (66,029 ) 54,207,299
Increase (Decrease) in cash and cash equivalents 9,684,180 51,706,759
Cash and cash equivalents at beginning of the period (2,442,385 ) 5,345,460
Effect of exchange rate fluctuations on cash held (435,323 ) (71,756 )
Cash and cash equivalents at end of the period   6,806,472     56,980,463  
 
 

MAKEMYTRIP LIMITED RECONCILIATION OF IFRS TO NON-IFRS FINANCIAL MEASURES
                     
Three months ended September 30
(in USD) Air ticketing Hotels and packages Others Total
2009 2010 2009 2010 2009 2010 2009 2010
 
Revenue 7,338,839 10,280,659 9,383,824 13,020,721 241,783 527,069 16,964,446 23,828,449
 
Less:
Service cost 12,023 -- 7,856,997 10,960,564 -- -- 7,869,020 10,960,564
Revenue less service cost 7,326,816 10,280,659 1,526,827 2,060,157 241,783 527,069 9,095,426 12,867,885
 
 
Six months ended September 30
Air ticketing Hotels and packages Others Total
2009 2010 2009 2010 2009 2010 2009 2010
 
Revenue 15,155,500 20,270,185 23,941,950 36,243,065 494,008 1,037,982 39,591,458 57,551,232
 
Less:
Service cost 771,503 -- 20,217,398 30,824,182 -- -- 20,988,901 30,824,182
Revenue less service cost   14,383,997   20,270,185     3,724,552   5,418,883     494,008   1,037,982     18,602,557   26,727,050
 
       
 
Reconciliation of Adjusted Operating Profit (Loss)

For the three months ended September 30

For the six months ended September 30
(Unaudited) 2009 2010 2009 2010
(in USD)
Result from operating activities as per IFRS 178,365 325,249 (5,450,511 ) 1,584,565
Add: Employee share-based compensation costs -- 154,109 6,606,273 307,060
Adjusted Operating Profit (Loss) 178,365 479,358 1,155,762 1,891,625
 
 
 
Reconciliation of Adjusted Net Income (Loss)

For the three months ended September 30

For the six months ended September 30
(Unaudited) 2009 2010 2009 2010
(in USD)
Income (Loss) for the period as per IFRS 19,100 (1,795,662 ) (5,566,623 ) (485,467 )
Add: Employee share-based compensation costs -- 154,109 6,606,273 307,060
Add: IPO cost related to listing of existing shares -- 2,086,583 -- 2,086,583
Less: Gain on change in fair market value of derivatives (10,574 ) (11,681 ) (76,696 ) (48,382 )
Add: Interest accretion on preference stock 273,606 145,657 542,887 426,291
Adjusted Net Income (Loss) 282,132 579,006 1,505,841 2,286,085
 
Adjusted Earning (Loss) per share
Basic 0.02 0.02 0.09 0.11
Diluted   0.01     0.02     0.08     0.10  
 
       
MAKEMYTRIP LIMITED OPERATING DATA
 
For the three months ended September 30 For the six months ended September 30
2009 2010 2009 2010
(in thousands, except percentages)
Number of transactions
Air ticketing 460.8 620.9 811.2 1,211.4
Hotels and packages 22.2 31.4 48.3 74.0
 
Revenue less service cost:
Air ticketing 7,326.8 10,280.7 14,384.0 20,270.2
Hotels and packages 1,526.8 2,060.2 3,724.6 5,418.9
Other revenue 241.8 527.1 494.0 1,038.0
9,095.4 12,867.9 18,602.6 26,727.1
Gross Bookings
Air ticketing 94,208.8 138,613.3 183,748.2 285,093.2
Hotels and packages 10,598.3 17,374.7 26,711.2 45,538.8
104,807.1 155,988.0 210,459.4 330,632.0
Net revenue margins
Air ticketing 7.8 % 7.4 % 7.8 % 7.1 %
Hotels and packages 14.4 % 11.9 % 13.9 % 11.9 %
Combines net revenue margin for air ticketing and hotels and packages   8.4 %   7.9 %   8.6 %   7.8 %

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