US-based home rental platform Airbnb’s Indian arm, Airbnb India, saw a significant improvement in its operating profits for the financial year ended March 31, 2019, despite a steep decline in profits, chiefly by keeping costs under control.
In FY19, the company reported EBITDA margins at nearly 14% against 9.51% in the previous year. Total expenditure reduced 7.5% during the same period. Its expenses stood at Rs 29 crore against Rs 32 crore in FY18, regulatory filings showed.
Within overall costs, other expenses reduced 24% to Rs 19 crore from Rs 25 crore in the previous year. However, there was no clarity on what constituted other expenses for the company. Except for other expenses and finance costs, all other cost heads -- employees, power and fuel and insurance costs registered an increase. Staff costs grew 35% to Rs 7.8 crore.
Despite improving its profitability, the company’s net profits were down 19% to Rs 1.7 crore while topline fell 6% to Rs 32 crore in FY19.
“Further, the business of the company looks positive and is poised for growth in future years,” the company said.
India remains a priority market for Airbnb, which has operations in 191 countries since its inception in 2008 by Rhode Island School of Design and Harvard graduates Brian Chesky, Joe Gebbia and Nathan Blecharczyk.
In February, the company said that over one million Indians used Airbnb globally and there has been a 115% increase in Indian listings.
In India, Airbnb competes with homegrown brands OYO and Treebo, Ctrip-backed MakeMyTrip and local unit of Netherland headquartered Booking.com.
In April 2019, Airbnb, which has a home sharing model, invested $75 million in Softbank-backed OYO for a minority stake in the franchise-based hotelier. On Tuesday, OYO posted losses of Rs 2,385 crore in FY19 as against Rs 360 crore in the previous year and 392% rise in revenues to Rs 9,028 crore.