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 due to non-cash one-off impairment including goodwill impairment cost and other operating expenses. The company narrowed its adjusted operating cash loss to $5.5 million for the quarter ending March 31, 2020. The total adjusted revenue for the quarter fell to $137.2 million from $163.3 million in the corresponding quarter last year.
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.
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 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.
Note: The article was changed to reflect that the 10-fold increase in the company's Q4 losses in fiscal 2020 over corresponding quarter in 2019 was incurred due to goodwill impairment and other operating expenses.