The mobile devices business of Spice Mobility* (previously S Mobility) posted total revenues of Rs 498.02 crore for the quarter ended June 30, 2014, registering a 30.1% growth from Rs 382.9 crore revenues in the same quarter last year. The segment had posted revenues of Rs 421.6 crore in the previous quarter.
The company however posted a loss before tax of Rs 3.34 crore as compared to a profit of Rs 9.30 crore in the same quarter last year. In the previous quarter, it had posted a loss of Rs 17.93 crore.
Mobile devices continue to dominate Spice Mobility’s revenues, representing 91.7% of the company’s revenues for the quarter that was at Rs 541.3 crore for the quarter. In comparison, mobile devices segment accounted for 85.7% of the company’s revenues in the same quarter last year and 89.9% in the previous quarter.
For the financial year ended June 30, 2014, the segment posted revenues of Rs 1,919.7 crore, registering a 17.7% increase from Rs 1,631.2 crore in FY13. The net loss before tax however increased to Rs 15.91 crore for the fiscal as compared to Rs 0.44 crore loss in FY13.
Increased brand building expenses: Spice Mobility mentions that it continues to invest in brand building through increased media spends and better distribution infrastructure to grow its business. This has resulted in branding expense for the quarter increasing by 114.3% year-on-year (YoY) to Rs 24.47 crore from Rs 11.42 crore in the same quarter last year. On a quarterly basis, it increased by 12.7% from Rs 21.71 crore in the previous quarter.
This brand building investment impacted the company’s total profitability, with Spice Mobility reporting a net loss of Rs 18.62 crore for the quarter, as compared to a profit of Rs 9.91 crore in the same quarter last year. This is the second straight loss making quarter for the company after posting a loss of Rs 18.67 crore in the previous quarter.
Services Revenue Declines: The revenue from Spice Mobility’s services business further slid to Rs 44.79 crore for the quarter, down 29.9% from Rs 63.9 crore in the same quarter last year and down 8.1% from Rs 48.72 crore in the previous quarter.
The profit before tax also declined significantly to Rs 1.27 crore for the quarter, from Rs 9.28 crore profit in the same quarter last year and Rs 4.86 crore profit in the previous quarter. Services business currently represents only 8.25% of Spice Mobility’s revenues for the quarter, down from 14.3% contribution in the same quarter last year and 10.4% in the previous quarter.
For the financial year ended June 30, 2014, the segment posted revenues of Rs 198.5 crore, down from Rs 240.2 crore in FY13. It however posted a profit before tax of Rs 15.65 crore for the fiscal as compared to a loss before tax of 0.44 crore in FY13.
Share buyback: During the quarter, Spice Mobility completed its long-drawn buyback offering in May this year, buying 10.22 million shares for Rs 36.85 crore at a price of Rs 36.05 per share. This represented 61.42% of the maximum buyback size. Through this buyback, promoter group shareholding had increased to 74.36%.
Change in financial year: Spice Mobility mentions that the company board has decided to close the current financial year on March 31, 2015, in order to comply with Companies Act, 2013 due to which that current financial year FY15 will be of 9 months i.e. from July 01, 2014 to March 31, 2015.
Download – Financials
*Disclosure: Spice Digital is an advertiser with Medianama