MAKEMYTRIP LIMITED ANNOUNCES FISCAL 2020 FOURTH QUARTER AND FULL YEAR RESULTS

Financial Highlights for Fiscal 2020 Fourth Quarter and Full Year

(Year over Year (YoY) growth % are based on constant currency (1); please see table below for YoY growth % on actual basis)

  • Gross Bookings(5) in 4Q20 reached $1.2 billion and $6.1 billion in FY20.

  • Revenue was $104.9 million for 4Q20 and $511.5 million for FY20.

  • Adjusted Revenue(2) reached $137.2 million in 4Q20 and $723.4 million in FY20.

  • Operating Loss increased in 4Q20 and FY20 mainly due to non-cash one-off items, although we continued in our trajectory of narrowing down our Adjusted Operating Loss(3) in QoQ and YoY.

  • 4Q20 was partially marked by weak consumer travel demand due to a challenging macroeconomic environment caused by the COVID-19 pandemic.

Gurugram, India and New York, June 26, 2020 - MakeMyTrip Limited (NASDAQ: MMYT), India's leading online travel company, today announced its unaudited financial and operating results for its fiscal fourth quarter and full fiscal year ended March 31, 2020.

"MakeMyTrip entered the fiscal fourth quarter with continued focus on driving strong business growth coupled with narrowing of operating losses. However, our plans were disrupted by the unprecedented lockdown due to the COVID-19 pandemic starting to impact travel demand significantly from the month of March 2020 onwards." said Deep Kalra, Group Executive Chairman. "As the crisis unfolded and lockdown was imposed across the country, we quickly pivoted our short term plans to focus on conserving cash by reducing our spends. Our response to the COVID-19 pandemic have allowed us to remain resilient during these challenging times."

(in thousands except EPS)

Three months Ended

March 31, 2019

Three months Ended

March 31, 2020

YoY Change

YoY Change in constant currency(1)

Year Ended March 31, 2019

Year Ended March 31, 2020

YoY Change

YoY Change in constant currency(1)

Financial Summary as per IFRS

Revenue

$

120,177

$

104,946

-12.7 %

-9.8

%

$

486,011

$

511,529

5.3

%

6.6

%

Air Ticketing

$

41,693

$

35,845

-14.0 %

-11.1

%

$

166,714

$

174,361

4.6

%

6.1

%

Hotels and Packages

$

58,182

$

47,538

-18.3 %

-15.7

%

$

237,524

$

235,814

-0.7

%

0.3

%

Bus Ticketing

$

12,139

$

14,694

21.0 %

24.8

%

$

53,745

$

65,009

21.0

%

22.7

%

Others

$

8,163

$

6,869

-15.9 %

-12.7

%

$

28,028

$

36,345

29.7

%

31.4

%

Results from Operating Activities

$

(30,981 )

$

(330,258 )

$

(152,940

)

$

(429,410

)

Loss for the period

$

(40,393 )

$

(338,611 )

$

(167,883

)

$

(447,517

)

Diluted Loss per share

$

(0.39 )

$

(3.20 )

$

(1.61

)

$

(4.26

)

Financial Summary as per non-IFRS measures

Adjusted Revenue(2)

$

163,349

$

137,181

-16.0 %

-13.0

%

$

673,424

$

723,420

7.4

%

8.9

%

Air Ticketing

$

62,474

$

47,795

-23.5 %

-20.7

%

$

234,153

$

249,720

6.6

%

8.2

%

Hotels and Packages

$

76,856

$

65,377

-14.9 %

-11.8

%

$

351,615

$

360,116

2.4

%

3.9

%

Bus Ticketing

$

15,576

$

16,822

8.0 %

11.5

%

$

58,825

$

75,637

28.6

%

30.5

%

Others

$

8,443

$

7,187

-14.9 %

-11.7

%

$

28,831

$

37,947

31.6

%

33.3

%

Adjusted Operating Loss(3)

$

(18,427 )

$

(10,315 )

$

(98,789

)

$

(69,859

)

Adjusted Net Loss(4)

$

(18,273 )

$

(18,342 )

$

(103,659

)

$

(86,509

)

Adjusted Diluted Loss per share(4)

$

(0.18 )

$

(0.17 )

$

(1.00

)

$

(0.82

)

Operating Metrics

Gross Bookings(5)

$

1,372,809

$

1,206,677

-12.1 %

-9.0

%

$ 5,446,144

$ 6,093,735

11.9

%

13.5

%

Air Ticketing

$

839,561

$

692,112

-17.6 %

-14.6

%

$ 3,214,545

$ 3,581,267

11.4

%

13.0

%

Hotels and Packages

$

338,966

$

316,723

-6.6 %

-3.2

%

$ 1,515,464

$ 1,626,732

7.3

%

8.8

%

Bus Ticketing

$

194,282

$

197,842

1.8 %

5.1

%

$

716,135

$

885,736

23.7

%

25.5

%

Unit Metrics

Air Ticketing - Flight segments(8)

10,205

8,637

-15.4 %

39,485

42,054

6.5

%

Hotels and Packages - Room nights(7)

6,141

6,107

-0.6 %

26,611

29,647

11.4

%

Standalone Hotels - Online(6) - Room nights(7)

5,993

5,983

-0.2 %

25,911

29,043

12.1

%

Bus Ticketing - Travelled tickets

17,111

18,582

8.6 %

61,464

78,582

27.9

%

%%%%

%%%%%

%%%%%

Notes:

  • (1) Constant currency refers to our financial results assuming constant foreign exchange rates for the current fiscal period based on the reporting for the historical average rate used in the prior year's comparable fiscal period.

  • (2) Represents IFRS revenue after adding back promotion expenses in the nature of customer discount, customer inducement/acquisition costs and loyalty program costs, which are reported as a reduction of revenue, and deducting the cost of acquisition of services primarily relating to sales to customers where the company acts as the principal. IFRS refers to International Financial Reporting Standards as issued by the International Accounting Standards Board.

  • (3) Results from operating activities excluding impairment of goodwill, employee share-based compensation costs, gain on disposal of an equity-accounted investee, amortization of acquisition related intangibles, merger and acquisitions related expenses and provision for litigations.

  • (4) Profit (Loss) for the period excluding impairment of goodwill, employee share-based compensation costs, amortization of acquisition related intangibles, merger and acquisitions related expenses, share of (profit) loss of equity-accounted investees, gain on disposal of an equity-accounted investee, impairment in respect of an equity-accounted investee, net change in value of financial liability in business combination, income tax expense (benefit) and provision for litigations.

  • (5) Represents the total amount paid by our customers for the travel services and products booked through us, including taxes, fees and other charges, net of cancellations, discounts and refunds.

  • (6) "Standalone Hotels - Online" refer to Standalone Hotels booked on desktops, laptops, mobiles and other online platforms.

  • (7) "Room nights," also referred to as "hotel-room nights," is the total number of hotel rooms occupied by a customer or group, multiplied by the number of nights that such customer or group occupies those rooms.

  • (8) "Flight segments" means a flight between two cities, whether or not such flight is part of a larger or longer itinerary.

Please see "About Non-IFRS Financial Measures" included within this release to understand the importance of the measures set forth in notes (1) to (8) above. Reconciliations of IFRS financial measures to non-IFRS financial measures, and operating results are included at the end of this release.

Other information

Impact of the COVID-19 Pandemic

During the quarter ended March 31 2020, the COVID-19 pandemic and thereafter various measures taken by government's globally and particularly in India, including lockdowns, travel restrictions and quarantine requirements, have had a significant negative impact on the travel industry. The impact of COVID-19 has drastically reduced travel demand in terms of consumer sentiment and their ability to travel, which has caused airlines and hotels in India and around the world to operate at significantly reduced service levels. The COVID-19 pandemic has also resulted in significant weakness in the macroeconomic environment and heightened volatility in financial markets. Our financial and operating results for the fourth quarter of the fiscal 2020 year were impacted by these conditions in the domestic and global economy and the travel industry, with the impact worsening toward the end of the quarter as India was put under lockdown with effect from March 25, 2020. Accordingly, our fiscal 2020 fourth quarter financial results reflect decreases in revenue in our air ticketing and hotels and packages segments and a slowdown in bus ticketing revenue growth.

As the impact from the COVID-19 pandemic worsened towards the end of the reported quarter, the Indian Government imposed a lockdown across the country. As travel came to a standstill under the lockdown, we also observed significant declines in our stock price and market capitalization. In the fourth quarter of fiscal year 2020, we performed a quantitative assessment of goodwill and, following that assessment, we recorded an impairment charge of our goodwill amounting to $272.2 million primarily related to our Goibibo business, which we had acquired in fiscal year 2017. This non-cash charge does not affect our long-term operating plans for the Goibibo brand or the way our management views our operating performance during the reported quarter. We plan to continue driving synergies across our portfolio of multiple brands on the path of disciplined and financially sustainable growth while making appropriate investments to drive online penetration in various travel segments to support the long-term growth of our company, including the Goibibo brand.

We currently expect the impact of the COVID-19 pandemic on our financial results to be greater in the first quarter of the fiscal 2021 year because India's nationwide lockdown began on March 25, 2020 and most travel services were largely shutdown during April and May 2020. As a result, our results of operations for the first quarter of fiscal year 2021 will reflectthe impact of the pandemic on the full quarter as compared to the partial impact reflected in our financial results for the quarter ended March 31, 2020. The extent of the effects of the COVID-19 pandemic on our business, results of operations, cash flows and growth prospects are highly uncertain and will ultimately depend on future developments. These include, but are not limited to, the severity, extent and duration of the pandemic and its impact on the travel industries and consumer spending more broadly. Even if economic and operating conditions for our business improve, we cannot predict the long-term effects of the pandemic on our business or the travel industries as a whole.

Beginning in April 2020, we have implemented various cost saving measures in response to current market conditions. These include compensation cuts of up to 100% of salary for our Group Executive Chairman and Group CEO, approximately 50% salary reductions for the rest of the senior management team and smaller reductions for the rest of our managerial positions. We have also significantly ramped down our outsourced teams at our call centers and our offline team managing corporate events. We are optimizing our IT infrastructure costs, our office costs and various other general and administrative expense. Apart from reductions in fixed costs, we are also reducing our variable costs including marketing and sales promotions and payment gateway costs. We have also cancelled all discretionary spends such as events, trainings and brand building. We expect most of these cost saving measures to remain in place at least through the beginning of the second quarter of the 2021 fiscal year. In light of our shift in focus away from offline sales channels as well as continuing effort to optimize fixed costs, we are also closing our company-owned offline retail stores in India.

We are cautiously optimistic of some recovery from the second quarter of the 2021 fiscal year as nationwide restrictions are gradually easing, including resumption of domestic flights from May 25, 2020 and various other travels services since June 8, 2020.

The following risk factor reflects our current and preliminary view on the impact of COVID-19 and related risks. This risk factor, as reviewed and updated, will be included in our forthcoming Annual Report on Form 20-F for the year ended March 31, 2020.

The COVID-19 pandemic has had, and is expected to continue to have, a material adverse impact on the travel industry and our business, financial condition, results of operations and cash flows.

An outbreak of a novel strain of coronavirus, COVID-19, was identified in Wuhan, China in December 2019 and was subsequently recognized as a pandemic by the World Health Organization on March 11, 2020. The COVID-19 pandemic has severely restricted the level of economic activity around the world, and the travel and tourism sector is one of the sectors that have been impacted most severely. In response to the COVID-19 pandemic, the government in India and governments in many countries and regions have implemented containment measures, such as imposing restrictions on travel and business operations and advising or requiring individuals to drastically limit the time spent outside of their homes. The ability to travel has been curtailed by city, state and national border closures, mandated travel restrictions and limited operations of airlines and hotels. Many of our customers and suppliers, including hotels and airlines, have drastically curtailed their service offerings or ceased operations entirely. These measures are being continuously re-evaluated by the relevant authorities, and whether these measures are eased, continued or increased is outside of our control or ability to predict.

The measures implemented to contain the COVID-19 pandemic have had, and are currently expected to continue to have, a significant negative effect on our business, financial condition, results of operations and cash flows. In the fourth quarter of 2020, we have experienced, and expect to continue to experience, a significant decline in travel demand resulting in significant customer cancellations and refund requests and reduced new orders relating to international and domestic travel and lodging. We observed a significant decrease in supply of domestic transportation tickets and international air tickets in response to comprehensive containment measures in India and internationally regions. In the fourth quarter of fiscal year 2020, as a result of the significant negative impact related to COVID-19 pandemic on the travel industry and our stock price and market capitalization, we concluded that sufficient indicators existed to require us to perform a quantitative assessment of goodwill and, following that assessment, we recorded an impairment charge of our goodwill amounting to $272.2 million primarily related to our Goibibo business, which we had acquired in fiscal year 2017.

Beginning in April 2020, we have implemented various cost saving measures in response to current market conditions. These include compensation cuts of up to 100% of salary for our Group Executive Chairman and Group CEO, approximately 50% salary reductions for the rest of the senior management team and smaller reductions for the rest of our managerial positions. We have also significantly ramped down our outsourced teams at our call centers and our offline team managing corporate events. We are optimizing our IT infrastructure costs, our office costs and various other general and administrative expense. Apart from reductions in fixed costs, we are also reducing our variable costs including marketing and sales promotions and payment gateway costs. We have also cancelled all discretionary spends such as events, trainings and brand building. We expect most of these cost saving measures to remain in place at least through the beginning of the second quarter of the 2021

fiscal year. In light of our shift in focus away from offline sales channels as well as continuing effort to optimize fixed costs, we are also closing our company-owned offline retail stores in India.

Our business and the travel industry in general is particularly sensitive to reductions in personal and business-related discretionary spending levels. The COVID-19 pandemic could continue to impede global economic activity, even as restrictions are lifted, leading to decreased per capita income and disposable income, increased and prolonged unemployment or a decline in consumer confidence, all of which could significantly reduce discretionary spending by individuals and businesses on travel. In turn, that could have a negative impact on demand for our services and could lead us, our suppliers or our competitors to reduce prices or offer incentives to attract travelers, despite already operating in a highly competitive industry. Such circumstances or developments could have a material adverse impact on our business, financial condition, results of operations and cash flows. We cannot reasonably estimate the impact of COVID-19 on our future revenues, results of operations, cash flows, liquidity or financial condition, but such impacts have been and will likely continue to be significant for the foreseeable future.

Share Repurchase

On November 6, 2012, our Board of Directors authorized the Company to purchase outstanding ordinary shares, par value $0.0005 per share, of the Company. On January 22, 2016, our Board of Directors authorized the Company to increase the share repurchase plan to an amount aggregating up to $150 million at a price per ordinary share not exceeding $21.50 until November 30, 2021. There were no repurchases pursuant to the share repurchase plan during the fiscal 2020 fourth quarter. As of March 31, 2020, we had remaining authority to repurchase up to approximately $136.0 million of our outstanding ordinary shares.

Fiscal 2020 Fourth Quarter Financial Results

Revenue. We generated revenue of $104.9 million in the quarter ended March 31, 2020, a decrease of 12.7% (9.8% in constant currency) over revenue of $120.2 million in the quarter ended March 31, 2019. Our Total Adjusted Revenue decreased by 16.0% (13.0% in constant currency) to $137.2 million in the quarter ended March 31, 2020 from $163.3 million in the quarter ended March 31, 2019, as a result of a decrease of 23.5% (20.7% in constant currency) in our Adjusted Revenue - air ticketing, a decrease of 14.9% (11.8% in constant currency) in our Adjusted Revenue - hotels and packages, and a decrease of 14.9% (11.7% in constant currency) in our Adjusted Revenue - others, partially offset by an increase of 8.0% (11.5% in constant currency) in our Adjusted Revenue - bus ticketing, each as further described below. Adjusted Revenue also includes promotion expenses of $58.2 million in the quarter ended March 31, 2020 and $81.4 million in the quarter ended March 31, 2019, recorded as a reduction of revenue. The decrease in Revenue and Total Adjusted Revenue was primarily due to the impact of the COVID-19 pandemic (as further discussed herein), including lower travel demand beginning in March 2020 and travel restrictions and nationwide lockdown orders implemented in India in March 2020.

For further information on this non-IFRS financial measure, see - "About Non-IFRS Financial Measures" elsewhere in this release.

For the three months ended March 31

Hotels and

Air ticketing

packagesBus ticketingOthers

Total

201920202019

20202019202020192020

2019

2020

(Amounts in USD thousands)

Revenue as per IFRS

41,69335,84558,18247,53812,13914,6948,1636,869120,177104,946

Add: Promotion expenses recorded as a reduction of revenue

21,05512,05555,59041,9134,4533,81531941581,41758,19862,74847,900113,77289,45116,59218,5098,4827,284201,594163,144

Less: Service cost as per IFRS Adjusted Revenue __________________

274

10536,91624,0741,0161,687

39(1)

97(1)38,245(1)25,963(1)

62,47447,79576,85665,37715,57616,8228,4437,187163,349137,181

(1) Loyalty program costs amounting to $1.4 million have been excluded from service cost (three months ended March 31, 2019: $0.5 million) relating to "Others", and have been included in marketing and sales promotion expenses.

Air Ticketing. Revenue from our air ticketing business decreased by 14.0% (11.1% in constant currency) to $35.8 million in the quarter ended March 31, 2020 from $41.7 million in the quarter ended March 31, 2019. Adjusted Revenue from our air ticketing business decreased by 23.5% (20.7% in constant currency) to $47.8 million in the quarter ended March 31, 2020,from $62.5 million in the quarter ended March 31, 2019. Adjusted Revenue - air ticketing includes promotion expenses of $12.1 million in the quarter ended March 31, 2020 and $21.1 million in the quarter ended March 31, 2019, recorded as a reduction of revenue. These promotion expenses added back to Adjusted Revenue, with the consequent increase in marketing and sales promotion expenses, is intended to reflect the way we view our ongoing business. Under IFRS, these promotion expenses are required to be recorded as a reduction of revenue. This decrease in Adjusted Revenue - air ticketing was due to a decrease in gross bookings of 17.6% (14.6% in constant currency) primarily driven by a 15.4% decrease in the number of air ticketing flight segments year over year, primarily due to the impact of the COVID-19 pandemic, including lower travel demand beginning in March 2020 and travel restrictions and nationwide lockdown orders implemented in India in March 2020. Further, our Adjusted Revenue margin (defined as Adjusted Revenue as a percentage of gross bookings) was 6.9% in the quarter ended March 31, 2020 compared to 7.4% in the quarter ended March 31, 2019, and 7.2% in the quarter ended December 31, 2019. The marginal decline in Adjusted Revenue Margin was primarily attributable to less supplier incentives earned, caused by the decline in air travel demand due to COVID-19.

Hotels and Packages. Revenue from our hotels and packages business decreased by 18.3% (15.7% in constant currency) to $47.5 million in the quarter ended March 31, 2020, from $58.2 million in the quarter ended March 31, 2019. Our Adjusted Revenue - hotels and packages decreased by 14.9% (11.8% in constant currency) to $65.4 million in the quarter ended March 31, 2020 from $76.9 million in the quarter ended March 31, 2019. Adjusted Revenue - hotels and packages includes promotion expenses of $41.9 million in the quarter ended March 31, 2020 and $55.6 million in the quarter ended March 31, 2019, recorded as a reduction of revenue. These promotion expenses added back to Adjusted Revenue, with the consequent increase in marketing and sales promotion expenses, is intended to reflect the way we view our ongoing business. Under IFRS, these promotion expenses are required to be recorded as a reduction of revenue. Gross bookings decreased by 6.6% (3.2% in constant currency) primarily driven by a 0.6% decrease in the number of hotel-room nights year over year primarily due to the impact of the COVID-19 pandemic, including lower travel demand beginning in March 2020 and travel restrictions and nationwide lockdown orders implemented in India in March 2020. Our Adjusted Revenue margin in the quarter ended March 31, 2020 was 20.6% as compared to 22.5% in the quarter ended December 31, 2019 and 22.7% in the quarter ended March 31, 2019. The decrease in Adjusted Revenue margin was primarily due to a decrease in margins from our suppliers in line with a shift in our pricing strategy in the hotels and packages business.

Bus Ticketing. Revenue from our bus ticketing business increased by 21.0% (24.8% in constant currency) to $14.7 million in the quarter ended March 31, 2020, from $12.1 million in the quarter ended March 31, 2019. Adjusted Revenue from our bus ticketing business increased by 8.0% (11.5% in constant currency) to $16.8 million in the quarter ended March 31, 2020 from $15.6 million in the quarter ended March 31, 2019. Adjusted Revenue - bus ticketing includes promotion expenses of $3.8 million in the quarter ended March 31, 2020 and $4.5 million in the quarter ended March 31, 2019, recorded as a reduction of revenue. These promotion expenses added back to Adjusted Revenue, with the consequent increase in marketing and sales promotion expenses, is intended to reflect the way we view our ongoing business. Under IFRS, these promotion expenses are required to be recorded as a reduction of revenue. Gross bookings increased by 1.8% (5.1% in constant currency) driven by a 8.6% increase in the number of bus tickets travelled year over year, which reflects the continued offline to online shift within this travel segment, partially offset by the impact of COVID-19 pandemic, including lower travel demand beginning in March 2020 and travel restrictions and nationwide lockdown orders implemented in India in March 2020. Our Adjusted Revenue margin was 8.5% in the quarter ended March 31, 2020, which remained at the similar level of 8.6% in the quarter ended December 31, 2019, but increased from 8.0% in the quarter ended March 31 2019.

Other Revenue. Other revenue decreased by 15.9% (12.7% in constant currency) to $6.9 million in the quarter ended March 31, 2020, from $8.2 million in the quarter ended March 31, 2019. Our Adjusted Revenue - others has decreased to $7.2 million in the quarter ended March 31, 2020 from $8.4 million in the quarter ended March 31, 2019. This was primarily due to lower insurance income, partially offset by higher advertisement income and other ancillary revenues in the quarter ended March 31, 2020. Our Other Revenue and Adjusted Revenue - others for the quarter ended March 31, 2020 reflects the impact of the COVID-19 pandemic, including lower travel demand beginning in March 2020 and travel restrictions and nationwide lockdown orders implemented in India in March 2020. Adjusted Revenue - others includes promotion expenses of $0.4 million in the quarter ended March 31, 2020 and $0.3 million in the quarter ended March 31, 2019, recorded as a reduction of revenue. These promotion expenses added back to Adjusted Revenue, with the consequent increase in marketing and sales promotion expenses, is intended to reflect the way we view our ongoing business. Under IFRS, these promotion expenses are required to be recorded as a reduction of revenue.

Personnel Expenses. Personnel expenses increased by 22.1% to $34.5 million in the quarter ended March 31, 2020 from $28.2 million in the quarter ended March 31, 2019. The increase reflects annual wage increases implemented in earlier quarters of fiscal year 2020. Excluding employee share-based compensation costs for the fourth quarter of both fiscal years 2020 and 2019, personnel expenses as a percentage of Adjusted Revenue increased by 3.6%, reflecting the decline in Adjusted Revenue and annual wage increases described above.

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MakeMyTrip Limited published this content on 26 June 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 June 2020 10:23:08 UTC