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Monday, 29 June, 2020, 10 : 04 AM [IST]

MMT narrows adjusted operating cash loss to USD 5.5mn in Q4; adjusted revenue falls 13%

Online travel portal MakeMyTrip on Friday announced narrowing its adjusted operating cash loss to USD 5.5 million for the quarter ended March 31. The fourth quarter of FY’20 was partially marked by weak consumer travel demand due to a challenging macroeconomic environment caused by the COVID-19 pandemic, reports Payal Ganguly in Tech Circle.

The company reported a Adjusted Revenue increase of 7.4% (8.9% in constant currency) to USD 723.4 million for the year ended March 31, 2020 from USD 673.4 million during the same period in 2019.

The company reported a 10-fold increase in operating loss to USD 330.2 million for the fourth quarter of FY20 over USD 30.9 million in the corresponding quarter of FY19.

During the fourth quarter of FY20, all lines of revenue other than the bus-ticketing suffered a setback from the corresponding quarter previous year due to travel restrictions which were put in place in view of the Covid-19 pandemic by end of February.

According to MakeMyTrip, revenue from bus ticketing business increased by 21.0% to USD 14.7 million in Q4 FY20, from USD 12.1 million in the quarter ended March 31, 2019.

India entered a nationwide lockdown on March 25, so it is likely that the full impact of the travel restrictions on business will be seen in the first quarter of FY21, the company said. 

During an analyst call, company CFO Mohit Kabra said that the company has reduced fixed costs to ensure it has a liquidity of USD 168 million available to keep the company afloat in the next two years in a zero revenue scenario. 

“We have managed to reduce our fixed costs from USD 16 million per month to USD 10 million per month,” Kabra said during the call. 

According to the presentation made by MakeMyTrip, the company started implementing cost-saving measures from April 2020, including 100% of salary cuts for group executive chairman and group CEO. Other senior management team members saw 50% salary reductions. Earlier this month, the company also laid-off 350 employees from its holiday package team due to a slowdown in the sector. 

Other measures taken by the company to reduce fixed costs include reducing information technology infrastructure costs, administrative and office costs and reducing marketing and advertising spends. The company also said that it managed to reduce its reliance on outsourced manpower through call centres by ‘repurposing’ existing staff and relying on the chat platform.

“We expect most of these cost saving measures to remain in place at least through the beginning of the second quarter of the 2021 fiscal year,” the company said in its presentation. 

MakeMyTrip also announced shutting down company-owned offline retail stores as part of the austerity measures, stating that it had added 150 franchised stores before Covid-19 impacted the business.

During the analyst call, Group Executive Chairman Deep Kalra reiterated that when China’s C-Trip acquired the shares of the largest shareholder, Naspers in the company in April 2019, it had pledged to support any further fundraise, which served as an assurance. (Source: Tech Circle)

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