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Onmobile’s revenues down 6.48% YoY in Q4 FY16 due to currency fluctuations

OnMobile Global

Net losses at Onmobile Global narrowed in the quarter ended March 2016 (Q4 FY16). The mobile VAS and ring back tone company reported a loss of Rs 6.11 crore compared to the net loss of Rs 7.63 crore in the preceding quarter and from Rs 14.59 crore in the same quarter last year.

Revenues in the company declined marginally 3.32% to Rs 200.12 crore compared to Rs 207 crore the preceding quarter. Onmobile had reported revenues Rs 214 crore in the same quarter last year, a decline of 6.48%. Cash reserves for the company increased 15.31% to Rs 320.9 crore from Rs 278.3 crore in the preceding quarter.

Revenues and profitability were hit due to foreign currency fluctuations again. This time, the Egyptian government devalued the country’s currency and as a result, Onmobile incurred a cost of Rs 3.28 crore. The Venezuela Government introduced a new foreign currency exchange system which resulted in devaluation of Venezuelan Bolivar Fuerte and a cost of Rs 80 lakh. In the preceding quarter, the Argentinian government devalued Argentine Peso (ARS) which led to a foreign exchange loss of Rs 0.65 crore.

EBITDA decreased by 3.2% q-o-q to Rs 38.1 crore. Employee costs decreased 1.99% from the preceding quarter to Rs 51.49 crore. Employee costs were 25.78% of total costs. For context, three years ago, employee cost was 40% of total costs.

India business

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At 22% of total revenues, India business was Rs 44.9 crore, down 2.3%  sequentially from Rs 45.9 crore and down 13.5% y-o-y.

Onmobile secured a 3 year deal with Reliance Communications to provide Ringback Tones to its customers on GSM and CDMA networks across India.

International business

International business accounted for 78% of the total revenues or Rs 156.09 crore, up 14.8% y-o-y and down 3.6% sequentially.

Developed markets: Europe recorded a revenue growth of 4.4% q-o-q and 10.4% y-oy. Last quarter, Onmobile signed a CVAS contract with a major operator in Russia. “This will enable us to provide our CVAS services in Russia apart from laying a foundation for future opportunities in this region,” the company added.

Latin America: Revenue down by 21.9% q-o-q and 38.0% y-o-y respectively.

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Other emerging markets: Revenues down by 3.6% q-o-q and grew by 14.8% y-o-y to Rs 40.7 crore. In Asia, revenue grew by 11.7% q-o-q and 65.9% y-o-y. Middle East and Africa, revenue down by 12.8% q-o-q and 7.3% y-o-y. Onmobile crossed 2 million subscriber base in the month of March with 11.8% penetration in a major operator in Nigeria.

Share buyback

In February, Onmobile had announced buyback of shares amounting to Rs 70 crore subject to a maximum of 5.6 million shares. At the end of May the total buyback stood at 2.9 Mn shares with an outflow of Rs 34.24 crore.

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