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OnMobile posts net loss of Rs 1 cr due to demonetization, foreign currency losses

OnMobile Global posted a net loss of Rs 1 crore for the quarter ended December 2016 (Q3 FY17) compared to the net loss of Rs 12.5 crore in the same quarter last year. The company had posted a net profit of Rs 4.1 crore in the preceding quarter. The mobile VAS company was back to profitability in Q1FY17 after steadily narrowing losses.

Revenues stood at Rs 180.5 crore a decline of 12.7% from Rs 206.8 crore in the same quarter last year. Sequentially, revenues saw a degrowth of 3.5% from Rs 187.1 crore. Revenue was down due to the demonetization in India, devaluation of the Egyptian Pound and poor performance in Brazil.

EBITDA also continue to decline. On a year-on-year basis, EBITDA was down 35.2% to Rs 25.2 crore.  Employee costs decreased 4.6% from the preceding quarter to Rs 50.3 crore and costs were down 6.5% on a YoY basis.

India business:

At 24% of total revenues, India business was Rs 43.3 crore, a marginal decline from the preceding quarter. Onmobile mentioned that its contract with Vodafone for ring-back tones and other services was renewed for a further period of 2 years effective January 2017.  It renewed an agreement for providing SMS and WAP services to BSNL for a period of one year.

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International business

International business was stable at 76% of total revenue during the quarter.

Europe: Recorded a strong revenue growth of 7.5% q-o-q. OnMobile signed a new agreement with TIM Italy to provide CVAS services. These services were launched in December 2016.

Latin America: Revenue down by 37.4% q-o-q. This was primarily due shutting down of non-core business such as Football in the region and the inability reach a long-term arrangement with telecom operator Vivo, Brazil.

Other emerging markets: Revenue down by 16.8% q-o-q in Asia. In the Middle East and Africa, revenue was down by 7.4% q-o-q mainly due to devaluation in the Egyptian Pound.

Other developments:

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In August, OnMobile entered into a deal with US-based carrier Sprint for their ringback tone service. It recently also launched ONMO, a B2C platform that offers a suite of mobile apps and services.

Download: Financials | Presentation 

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