MakeMyTrip posts tenfold rise in Q4 operating loss at $330 million

MK Digital Line
Online travel company MakeMyTrip on Friday reported a 5.3% increase in its top line for the financial year ending March 31, 2020 to $511.5 million compared to $486 million in the previous year.

The Gurugram and New York-headquartered firm posted a total comprehensive loss of $523 million for the financial year 2019-20, compared to $241.8 million a year ago.

The company reported a 10-fold increase in operating loss to $330.2 million for the fourth quarter of FY20 over $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 $14.7 million in Q4 FY20, from $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 $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 $16 million per month to $10 million per month,” Kabra said during the call.

MakeMyTrip also announced shutting down company-owned offline retail stores as part of the austerity measures, stating that it had added 150 franchisee 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.

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