Onmobile Global reported a net loss after tax of Rs 0.16 crore for the quarter ended June 30th 2015, down significantly from the Rs 23.88 crore loss it had reported for the same quarter last year.
The company reported consolidated revenues of Rs 201.8 crore for the quarter ended June 30, a marginal increase of 1.5% from Rs 198.78 crore from the same quarter last year and a drop of 5.7% from Rs 214 crore from the preceding quarter. Adjusting for revenue from Voxmobili, which the company sold last year, the year on year increase in revenue was 9.9%. Cash reserves for the company increased by Rs 22.8 crores, it said in a statement.
EBITDA grew by 124% year on year from Rs 15.6 crore in Q1 FY15 to Rs 35.1 crore in Q1 FY’16. “This growth is inclusive of new expenditure to support the development of new products and brand which is approximately 2 percentage points of EBITDA margin.”
According to the company, “Headcount optimization during the last financial year and quarter resulted in a reduction of manpower cost by 32.0% y-o-y and 2.0% q-o-q despite annual increments in Q1 FY’16.” Onmobile’s employee base at the end of June 2015 was 1,075.
Employee costs are now 28.3% of total costs. For context, two years ago, employee cost was 42.3% of total costs.
At 22% of total revenues, India business was approximately Rs 44.4 crores, down as much as 20.23% from approximately Rs 55.66 crore from the corresponding quarter last year, where it was around 28% of revenues. Quarter on quarter, the India business declined 13.55% from approximately Rs 51.36 crores, (around 76% of revenues). Please note that the Onmobile presentation says that India revenues were down 14.4 % quarter on quarter and 4.1% year on year, and we’ll update after we check with Onmobile.
Onmobile says that the sequential decline is due to higher than expected revenues in Q4, and due to “routine market fluctuations.” The company says that “underlying business in India continues to be healthy as evidenced by growth in subscriber base.”
International business accounted for 78% of the total revenues or Rs 157.42 crore, up around 10% year on year, and down 3.21% quarter on quarter. However, this includes Voxmobility revenues from last year. Excluding Voxmobili revenues, International business was up 3.3% year on year, and down 2.9% quarter on quarter.
Readers will note that OnMobile had sold Voxmobili to Synchronoss for $26 million in July last year, following an intellectual property violation case filed by Synchronoss, against Voxmobili, Onmobile Global and Onmobile USA LLC.
Latin America was a cause for concern, as revenue was down 9.7% quarter on quarter (8.6% in constant currency), and 21.7% (13% in constant currency) year on year.
The company renewed its Ringback Tones partnership with Telefonica / Movistar in Latin
America for four years. More importantly, this contract renewal was secured without any upfront fee (i.e. minimum guarantee). Onmobile says that it believes that not paying an upfront fee and accepting a lower revenue share is a better financial model for OnMobile. “As a consequence of this approach, FY16 will conclude the amortization cost relating to the upfront fee and the Depreciation cost in FY17 will be lower” by around Rs 72 crore.
Europe recorded a revenue growth of 63.1% year on year, and 3.2% quarter on quarter. The company launched “High-Definition (HD) Identity RBT service” for 4G Voice (Voice over LTE)
customers of Vodafone Spain. OnMobile now has the new service in two major operators in
Spain, including Telefonica.
In other Emerging Markets
Revenues grew by 7.3% year on year and down 1.6% quarter on quarter to Rs 34.9 crore. The company deployed its Ringback tone service in Malaysia. In Bangladesh, it crossed 3 million subscribers, and has 11.5% RBT penetration with one of the large operators in Bangladesh.
In Africa, Onmobile launched RBT in MTN Swaziland, taking its MTN deployments to 8 Countries.
Post this quarter, Onmobile launched a digital music store with Grameenphone. More on that here.