Online travel firm MakeMyTrip posted net losses of $62.3 Mn for the quarter ended September 30, 2017. The online travel company had posted a net loss of $39.5 Mn for the corresponding period of the previous financial year. However the company’s revenue stood at $152.9 Mn for Q2 2017-18, up almost 84% from the $83.1 Mn for the same period a year ago.
In its SEC filings announcing unaudited financial results for quarter ended 30 September, 2017, MakeMyTrip stated that the financial and operating results for the fiscal 2018 second quarter include the financial and operating results of ibibo Group Holdings (Singapore) Pte. Ltd. and its subsidiaries (“ibibo Group”) which it acquired on January 31, 2017. Hence the results may not be comparable.
Commenting on the results, MakeMyTrip Group Chairman and Group CEO Deep Kalra stated “The strong results delivered in the fiscal second quarter reflect the successful execution of our strategy to deliver high growth with increased operational efficiency leveraging increasing scale. We also embarked on a comprehensive multi brand strategy to leverage the strengths of our various brands in differentiated customer segments and travel services.”
As far as the rise in revenue is concerned, it came on the back of rising revenues from all segments. For instance, the revenue from air ticketing business of the company rose by 71.2% to $40.3 Mn for the September quarter from $23.6 Mn for the same period a year ago, MakeMyTrip said.
Similarly, for the Hotels and Packages business, revenue rose to $98.3 Mn, up 70.5% for this quarter, compared to $57.6 Mn for the same quarter a year ago. The other revenue of the company stood at $14.3 Mn for this quarter compared to $1.9 Mn for the same period a year ago.
MakeMyTrip: Rising Expenses Led To An Increase In Net Loss
However increased expenses are one of the main reasons the Gurugram-headquartered company has been incurring massive losses. In the first quarter of this year, marketing and sales promotion-related spendings of MakeMyTrip surged from $52.7 Mn to over $133 Mn. In this second quarter, the marketing and sales promotion expenses increased by 139.8% to $115.9 Mn for the quarter from $48.4 Mn in the corresponding period previous year.
The company stated in the filings that “Primary drivers of this year on year increase include significant customer inducement and acquisition programs expenses incurred to accelerate growth in our standalone hotel booking business and increases in brand advertising expenses that was incurred in the quarter ended September 30, 2017 and the consolidation of marketing and sales promotion expenses of the ibibo Group.”
Image Credits: MakeMyTrip SEC Filings
Additionally, the company stated that other operating expenses increased by 62.3% to $28.3 Mn in the quarter ended September 30, 2017 from $17.4 Mn in the quarter ended September 30, 2016, primarily as a result of an increase in payment gateway charges and outsourcing expenses in line with the growth in its business and contribution of other operating expenses of the ibibo Group.
While MakeMyTrip continued its loss making streak this quarter on account of operating expenses rising after the MakeMyTrip-Ibibo merger was completed in February 2017, the online travel portal did also post some significant positives this quarter. Besides the rise in revenues, Room nights for MMT India standalone hotels booked online increased by 185.9% year-on-year (Y-o-Y) in this Q2 2017-18 while flight segments for air ticketing business increased by 64.6% YoY in this quarter. MakeMyTrip also invested in the $10 Mn Series B funding of GoFro, an online holiday deals marketplace in this quarter.