MakeMyTrip on Friday reported a 5.3% increase in its top-line financial year ending March 31, 2020, to USD 511.5 million compared to USD 486 million in the previous year. The Gurugram and New York-headquartered firm reported a loss of USD 523 million for the financial year 2019-20, in comparison to USD 241.8 million a year ago.
The organisation reported a 10-fold increase in operating loss to USD 330.2 million for the fourth quarter of FY20 over USD 30.9 million in the corresponding quarter of FY19.
During the fourth quarter of FY20, revenue from all operations, other than the bus-ticketing was affected due to travel restrictions enforced in February due to COVID-19. MakeMyTrip’s revenue from bus ticketing business increased by 21.0% to USD 14.7 million in Q4 FY20, from USD 12.1 million in the quarter ended March 31, 2019.
The company also said that business will be fully impacted due to travel restrictions, as India entered a nationwide lockdown on March 25.
MakeMyTrip started implementing cost-saving measures from April 2020
Company CFO Mohit Kabra, during an analyst call, said that the company has reduced fixed costs to ensure it has liquidity of USD 168 million available to survive in the next two years in a zero-revenue scenario. “We have managed to reduce our fixed costs from USD 16 million per month to USD 10 million per month,” Kabra said during the call. That included 100% of salary cuts for group executive chairman and group CEO and 50% salary cuts for the other senior management team members. The company also laid-off 350 employees from its holiday package team due to the sector’s setback.
They are also reducing information technology infrastructure costs, administrative and office costs, and marketing and advertising spend. The company has also claimed to have reduced its reliance on outsourced manpower through call centers 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 will also be shutting down company-owned offline retail stores, having added 150 franchised stores before Covid-19 impacted the business. During the analyst call, Group Executive Chairman Deep Kalra repeated 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 fundraising, which served as an assurance.
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