Online travel agent (OTA) MakeMyTrip has recorded a 95.5% annual fall in its revenues in the first quarter of the financial year 2021 due to pandemic and resultant travel restrictions. The company made just $6.4 Mn versus $141.7 Mn in the quarter ended June 30, 2019.
In its recently released financial statement, the company highlighted that there was a 91.6% fall in revenue from air ticketing, fall of 98.4% from hotel and packages, 98.4% decrease from bus ticketing revenues and a loss of 88.9% from other sources.
However, MakeMyTrip has managed to do better in terms of reducing its operating losses. The company has reported an operating loss of $34.6 Mn in the first quarter of the financial year 2021, representing an improvement of $8.3 Mn from $42.9 Mn recorded in the same quarter last year. The company’s adjusted operating loss was at $21.3 Mn in the same time period versus the $29.2 Mn in the previous year. This reflected an improvement of $7.9 Mn year-on-year (YoY).
The red marks in MakeMyTrips come as no shocker as its operations were severely affected due to the pandemic which wrecked the first quarter between April to June. The Indian government had barred all domestic and international flights between March 24 to May 22, 2020, which hit aviation companies and online ticketing companies.
This travel ban left both OTA’s like MakeMyTrip and aviation companies under the burden to refund hefty ticketing amounts without having any cash flow. During the lockdown additional tickets worth INR 180 Cr were booked between March 25 to May 3 across all private air carriers, according to media reports. Indigo contributed to almost 50% of tickets worth INR 90 to 95 Cr. Meanwhile, the train travel revenues continue to dry as full services are yet to resume.
Commenting on the financial performance, MakeMyTrip founder Deep Kalra, said, “MakeMyTrip is very well-positioned competitively, operationally and financially to begin its business recovery following India’s prolonged nationwide lockdown, which was in full effect in April and most of May.”
“During the lockdown, we restructured our operating costs, rightsized our staffing needs, further enhanced our online experiences and unified our platforms to drive greater user experiences with greater development efficiencies. Additionally, in order to increase our balance sheet strength, we have secured credit and guarantee facilities of approximately $100 million,” he added.
The company had laid off nearly 350 employees, company’s founder Kalra and CEO Rajesh Magow had told the employees in a letter. The internal email, shared with Inc42, told employees that over the past two months, MMT has analysed impact closely and have spent considerable time thinking about the path to business recovery.
“As a result, it’s become agonisingly clear that there are certain lines of business (LoBs) that are far deeply affected and will take much longer than the others to recover,” Kalra and Magow said.
In terms of yearly performance, the company had recorded revenue of $511.52 Mn in FY20, a YoY of 5.3% from $486.11 Mn in FY19. The company’s loss for the year has grown nearly 3x from $167.83 Mn in FY19 to $447.57 Mn in FY20. The company’s gross bookings have grown 11.9% YoY from $5.44 Bn to $6.09 Bn.