OnMobile_logo

OnMobile Global has posted a net loss of 12.1 crore for the quarter ended June 30, 2014, as compared to a profit of Rs 14.1 crore in the same quarter last year.

This loss was primarily due to a 141.5% increase year-on-year (YoY) in its content costs to Rs 418.3 crore from Rs 173.2 crore in the same quarter last year. The company mentions that it was impacted by increased content costs in Europe and a forex loss of Rs 3.9 crore. This was partly offset by savings in operating expenses.

Note that OnMobile had posted a net loss of Rs 124.3 crore in the previous quarter. This however included a goodwill non-cash impairment charges of Rs 68 crore arising from the Telisma acquisition and the Synchronoss IP settlement of Rs 35.4 crore, as part of the Voxmobili divestment. Without these exceptional items, the company would’ve reported a profit of Rs 3.75 crore.

Net revenues: The net revenues also declined by 4.1% YoY to Rs 182 crore for the quarter, down from Rs 189.7 crore in the same quarter last year. On a sequential basis, it declined by 10.6% from Rs 203.5 crore in the previous quarter. It’s worth noting these do not include revenue figures for OnMobile Live (previously Livewire).

Including OnMobile Live revenues, the company posted a net loss of Rs 23.9 crore for the quarter, as compared to 14.1 crore profit in the same quarter last year. The net revenue was up 4.8% YoY to Rs 198.8 crore for the quarter, from Rs 189.7 crore.

India

After an encouraging previous quarter which saw a 22.8% YoY increase in revenues, India revenues struggled again with the company posting a 28.1% YoY decline to Rs 46.3 crore. OnMobile however notes that India has been stable from the last quarter in terms of key performance indicators.

OnMobile mentions that it also migrated the RBT services for a major operator with around 240,000 connections during the quarter.

International

The international revenues increased by 21.7% YoY to Rs 152.5 crore for the quarter and contributed 72% of OnMobile’s net revenues for the quarter. Quarter on quarter though, the revenues declined by 5.3%.

The revenues for Latin America region was at Rs 51.2 crore for the quarter, flat YoY but down 4.9% QoQ. Whereas, the revenue for other emerging markets was at Rs 32.5 crore for quarter, down 4.6% YoY and 4.7% QoQ.

Developed markets however saw a robust growth to Rs 68.7 crore, up 72.3% YoY but down 12% QoQ. This was driven by significant growth in Europe revenues which grew by 53.9% YoY to Rs 46.4 crore.

OnMobile Live: OnMobile Live reported a net loss of Rs 11.8 crore for the quarter, an improvement from Rs 15.01 crore loss in the previous quarter. In the previous quarter, OnMobile had mentioned that the timelines for achieving profitability in OnMobile Live has been “right-shifted due to changes in market and business scenarios”.

The segment posted total revenues of Rs 16.8 crore for the quarter, registering a 22.2% decline QoQ.

Business Highlights

– RBT services went live for MTN in Rwanda. A SMS subscription services also went live with an operator in Qatar.

– OnMobile signed a contract for RBT, Music and CVAS services with an operator in Malaysia.

– It rolled out RBT services for an operator in Bangladesh and migrated around 1 million subscribers. Earlier this month, it signed a five year agreement to deploy RBT & IVR solutions for Bangladesh telco Robi.

– OnMobile completed the sale of VoxMobili SA to Synchronoss Technologies for $26 million. Remember OnMobile had also recently settled an intellectual property violation case filed by Synchronoss, against Voxmobili, Onmobile Global and Onmobile USA LLC.

– OnMobile CEO Rajiv Pancholy had been appointed as the managing director of the company, while OnMobile co-founder Mouli Raman had resigned from the board. Pancholy had been appointed as the OnMobile CEO in May this year after OnMobile co-founder Mouli Raman had stepped down as the Managing Director and Chief Executive Officer earlier in the same month.

– OnMobile had appointed Francois Charles Sirois as an additional director on the board. Sirois is the president and CEO of OnMobile Systems Inc, which is the largest shareholder in OnMobile Global. Earlier in the day, the company also expanded (pdf) its board to appoint Nancy Cruickshank and Bruno Ducharme as non-executive additional directors to the board.

Products

In terms of products, RBT continues to dominate OnMobile Global’s revenues, with the segment representing 62% of the company’s revenues for the quarter. The segment had also accounted for 62% of OnMobile’s revenues in the same quarter last year.

OnMobile Products Q1FY15

Voice & Text Services’s contribution has increased to 28% for the quarter, up from 27% in Q1-FY14, while ‘Data and Others’ contribution has declined to 10% for the quarter from 11% in Q1-FY14.

– Net Cash: OnMobile has a net cash of Rs 61.3 crore as of June 30, 2014, up significantly from Rs 35.7 crore as of March 31, 2014. The total cash & cash equivalents is at Rs 146.3 crore, up from Rs 124 crore in the previous quarter.

– Total Debt: OnMobile has total debt of Rs 85 crore as of June 30, 2014, down from Rs 88.3 crore as of March 31, 2014.

Download: Financials | Presentation