Update: During the earnings conference call, Rediff Chairman and CEO Ajit Balakrishnan summarized the financial performance: “We did $25 million in revenue, and at the operating level, we earned $6 million in cash. That works out to around 25% on $25 million. Of this, $6 million, we spent $5 million in Capex and $1 million in taking stake in companies like Eterno. Because we took a large one time writedown, mostly to do with India Abroad because the value of newspapers in the US has dramatically declined, and we were advised to reflect the market condition in its valuation. By the end of March 2009, we had $46 million in cash, compared to $59 million at the beginning of the year. Of that difference, $14 million is an exchange loss – not cash used. In Rupee terms, we started the year with Rs. 236 crores, and ended March with Rs. 232 crores.”
Financials | Release
Original Story: Losses for Nasdaq listed Rediff.com (REDF) have more than tripled to $8.86 million from a loss of $2.75 million last quarter: revenues declined to $4.49 million for the Quarter ending March 31st 2008, down 15 percent from $5.3 million last quarter, and 50.4% from $9.06 million in Q4 last year, which was Rediffs best quarter in recent memory.
A significant part of this loss has been attributed to an exceptional item, given the downturn in the newspaper business in the US, which impacts their publication India Abroad. “The quarter and fiscal year end results also include a non-cash goodwill and intangible asset impairment charge of $6.9 million, prelating primarily to an impairment of goodwill arising from our acquisition of the print newspaper ‘India Abroad’ in the United States in 2001, Rediff Chairman and CEO Ajit Balakrishnan has said. He adds that “revenue numbers for the quarter were also adversely impacted by a 25% year on year average depreciation of the Indian Rupee vis-à-vis the US dollar.” This hasn’t affected Rediffs cash position.
The slowdown in travel, jobs, matrimonial, shopping, consumer finance and real estate continues to afflict online advertising revenues. Both revenues and gross margins have been affected.
The company expects operating expenses to increase by an average of about $1.0 to 1.5 million per quarter over the next three to four quarters, as well as some revenue loss in the short run from eliminating ads on their international website’s home page.
