Mobile VAS company OnMobile Global has reported a 55% increase in content costs for the quarter ending September 30th 2008.
In Q2 of the 2008-09 fiscal, OnMobile reported a payout of Rs. 11.67 crores in Content Fees and Royalties, up from Rs. 7.53 crores in Q1.
Remember that OnMobiles deals with content providers from the South Indian Music Companies Association (SIMCA) became operational in July 2008, and perhaps these payouts are reflected in the increase in content costs as indicated below:
Financial Results
On a standalone basis (OnMobile Global, sans its subsidiaries), this quarter was much better for OnMobile – the company reported revenues of Rs. 79.35 crores, up from Rs. 64.56 crores the quarter before. One of our readers, “VAS Guy” had correctly pointed out in the comments earlier that OnMobile revenues had declined QoQ from Rs. 67 crores for the quarter ending March 2008. They are now back up. OnMobile has also reported an increase in EBITDA to Rs. 19.19 crores, up from Rs. 11.19 crores last quarter.
What’s not very welcome are the EBITDA margins – at 24.18%, they’re far lower than the EBITDA margins for mobile operators, which are typically around 40%. Still, for OnMobile Global, EBITDA margins improved this quarter 17.33% last quarter.
On a consolidated basis, OnMobile reported revenues of Rs. 97.46 crores, up from Rs. 77.85 crores last quarter. Net Profit was up 20.96%, at Rs. 18.35 crores. Note that employee costs are much higher at Rs. 30 crores at the consolidated level, compared to Rs. 17.61 crores at the standalone level. At the same time, of the Rs. 18.35 crores of consolidated profit, Rs. 17.38 crores is contributed by the standalone entity.
Telisma Acquisition Completed
During the quarter, OnMobile completed the acquisition of voice recognition company Telisma, for Rs. 84.37 crores.
Netherlands Subsidiary
OnMobile Global also incorporated OnMobile Europe B.V., Netherlands, a wholly owned subsidiary with an investment of Rs.12.18 lakhs.
Q209: Standalone Results, Consolidated Results
Q109: Financials, Release, Annual Report for 2007-08 | Analysis/Report
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4 Comments until now.
Nikhil,
Can you check if they are reporting content pass thru amount also as their revenue ?
If so, actual revenue could be lesser.
They could get into content rights and keep having fantastic topline QoQ.
Do you think anyone in VAS/Mobile content business will have revenues in these guy’s range?
what would be interesting to see also is the H1 2007 over H1 2006 and compare that with the 33% odd growth year on year. My guess is it was at least double. Given that mobile subscriber growth is at its highest in absolute terms it may indicate a more important trend that RBT penetration has peaked and the rate of growth has substantially reduced. It would also justify entering the expensive and difficult content business ;)
one of the analysts i discussed onmobile with last quarter was saying that they used to operate on ebitda margins of 60 percent, and wasnt happy with the decline…he was hoping that the adrbt would change things
Some time back there was a news that a patent had been filed for AD RBT. If that is done, the royalty payout on account of ADRBT will also there, thereby limiting the hopes from ADRBT.