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OnMobile Global faced a challenging quarter, as it reported a net loss of Rs 124.3 crore for the quarter ended March 31, 2014, due to exceptional items totalling Rs 111.95 crore and a forex loss of Rs 16.1 crore following the depreciation of Argentinian Peso and Egyptian Pound.

The exceptional items include a goodwill non-cash impairment charges of Rs 68 crore arising from the Telisma acquisition and an IP settlement worth Rs 35.4 crore with Synchronoss as part of the Voxmobili divestment. Remember that Synchronoss had earlier filed a lawsuit, alleging that Voxmobili and Onmobile USA LLC had infringed some of its patents.

Without these exceptional items, the company would’ve reported a profit of Rs 3.75 crore, which is still lower than Rs 10.8 crore profit reported in the same quarter last year. The EBITDA also declined by 3.6% to Rs 33.7 crore for the quarter, from Rs 35 crore in the same quarter last year.

The net revenues however increased by 10.5% year-on-year (YoY) to Rs 203.5 crore for the quarter, from Rs 184.1 crore in the previous quarter.  Note that these do not include revenue figures for OnMobile Live (previously Livewire).

Including OnMobile Live revenues, the company posted a net loss of Rs 139.5 crore for the quarter, as compared to a net profit of Rs 10.8 crore. The total revenues was almost flat at Rs 225.1 crore from Rs 225.5 crore in the same quarter last year.

FY13 results: These exceptional items also impacted OnMobile’s profitability for the financial year ended March 31, 2014, with the company reporting a loss of Rs 98.4 crore, as compared to a profit of Rs 47.2 crore in FY13.

The EBITDA also declined marginally by 2.7% to Rs 145.3 crore from Rs 149.3 crore in the same quarter last year. The net revenue however increased by 10.9% YoY to Rs 804.4 crore from Rs 725.3 crore in FY13.

Including OnMobile Live revenues, the company posted a net loss of Rs 132 crore for the quarter, as compared to a net profit of Rs 47.2 crore. The total revenues was up 19.3% to Rs 865.3 crore from Rs 725.3 crore in FY13.

India

In what seems to be an encouraging sign, India revenues grew by 22.8% quarter-on-quarter (QoQ) to Rs 64.1 crore, even though it declined by 3.9% YoY. OnMobile mentions that this was partly because of deferred revenues being recognized during the quarter. India currently account for only 28% of OnMobile’s revenues for the quarter.

For the full year 2013, the domestic revenues however declined by 18.7% YoY to Rs 231.3 crore. Note that OnMobile’s domestic revenues were impacted by the TRAI’s double confirmation guidelines last year, which had led to a 60% drop in VAS activations in the industry.

International

Year on year, international revenues increased by 18.7% to Rs 139.4 crore for the quarter and contributed 72% of OnMobile’s net revenues. Quarter on quarter though, the revenues declined by 8.4% primarily because of seasonality in its data products business and forex impact in Latin America (Latam) region. Including OnMobile Live revenues, the revenues grew by 37.1% YoY to Rs 161 crore but declined by 7.1% QoQ.

The revenue for Latin America region grew by 2.7% YoY to Rs 48.8 crore but declined by 1.8% QoQ, whereas the revenue for other emerging markets increased by 7.2% YoY to Rs 34.1 crore but declined by 3.3% QoQ.

For FY13, the International revenues increased by 30% to Rs. 573.1 crore, primarily led by Europe and Latin America regions. Including OnMobile Live revenues, the revenues grew by 43.8% YoY to Rs 634 crore but declined by 7.1% QoQ.

OnMobile Revenue Geography

LatAm revenues grew by 23% to Rs 205.4 crore for FY13 while the revenues from other emerging markets increased by 11.4% to Rs 141.7 crore, with Africa & Middle East region showing 12.6% revenue growth.

Europe saw a robust growth with revenues growing by 82.5% YoY to Rs 187.1 crore in FY14. On a quarterly basis, Europe revenues increased by 72.6% YoY although it declined by 15.9% QoQ.

OnMobile Live

OnMobile’s developed market segment revenues grew by 48.4% YoY to Rs 56.4 crore for Q4-FY14. Including OnMobile Live, the revenue grew by 105.2% to Rs 78.1 crore for Q4-FY14. OnMobile Live was at Rs 21.6 crore for the quarter, up 2.3% QoQ.

For FY13, the segment revenues grew by 53.3% to Rs 226 crore. Including OnMobile Live, the revenues grew by 94.6% to Rs 286.9 crore. OnMobile Live was at Rs 60.9 crore for the year.

OnMobile Live reported a net loss of Rs 15.01 crore for Q4-FY14, up 37% from Rs 10.96 crore loss in the previous quarter. For the full year FY14, OnMobile Live posted a net loss of Rs 33.55 crore. The company mentions that the timelines for achieving profitability in OnMobile Live has been “right-shifted due to changes in market and business scenarios”.

Products

Once again, OnMobile hasn’t provided any information on products and their deployment, but the dependancy on RBT continues to increase, with the segment contributing for 59% of OnMobile’s revenues for FY14, up from 58% in FY13.

What’s also worth noting is that Voice & Text Services’s contribution has increased to 30% for FY14, up from 25% in FY13, while ‘Data and Others’ contribution has declined to 11% in FY14 from 17% in FY13.

OnMobile Revenue Products

Content Costs: Content costs also has almost doubled to Rs 129.86 crore for FY14, from Rs 69.87 crore in FY13. For the quarter Q4-FY14, the content costs increased to Rs 39.40 crore, up from Rs 35.45 crore in the previous quarter and Rs 11.85 crore in the same quarter last year.

New CEO: OnMobile has also appointed Rajiv Pancholy as the CEO of OnMobile Global. Pancholy will be taking over from OnMobile co-founder Mouli Raman who had stepped down as the Managing Director and Chief Executive Officer of the company earlier this month.

It’s worth noting that OnMobile has witnessed a series of key resignations in the past quarter, including CFO Rajesh Kunnath and from what sources tell us, is largely a board-run company now.

Open Offer: Earlier this month, Onmobile Systems Inc had also completed the acquisition of an additional 10.16% in Onmobile Global, buying 11.9 million shares (11,900,000 shares) for Rs 47.6 crore. This increased its stake in the company to 43.46%, from 33.31% earlier.

Other Details

Net Cash: OnMobile has a net cash of Rs 35.7 crore as of March 31, 2014, down significantly from Rs 151.8 crore as of March 31, 2013. The total cash & cash equivalents is at Rs 124 crore, down from Rs 200.9 crore.

Total Debt: OnMobile has total debt of Rs 88.3 crore as of March 31, 2014, up from Rs 49.1 crore as of March 31, 2013.

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