OnMobile Reports Fourth Quarter and Full Year Fiscal 2014 Results Stable Revenue; Net Margins Impacted by Significant Exceptional Charges

BANGALORE, India – May 29, 2014: OnMobile Global (“OnMobile”) today announced the results for the Fourth Quarter and Full Year FY2014 ended March 31, 2014. Revenue for Q4 FY2014 was Rs. 2,251 million, an increase of 22.3% y-o-y and a decline of 0.2% q-o-q. For the full year FY2014, the Revenue was Rs. 8,653 million, a growth of 19.3%.

Financials including OnMobile Live (OLI):
Financials excluding OLI:
Key Highlights (excluding OLI):
  • Robust international business portfolio with strengthening domestic business
    • Net Revenue increased 10.5% y-o-y in Q4 FY2014 to Rs. 2,035 million
  • EBITDA remained stable at Rs. 337 million at 16.6% margin in Q4 FY2014
    • Normalized for forex impact, EBITDA increased 8.7% q-o-q with 18.0% margin
  • Net Loss was Rs. 1,243 million, on account of exceptional items totaling Rs. 1,195 million and additional forex loss of Rs. 161 million mainly on account of depreciation of Argentinian Peso and Egyptian Pound
    • Completed the year end impairment review for the consolidated financial statements for FY2014, and as a result, the Company has written down the goodwill associated with the acquisition of Telisma from its balance sheet. This has resulted in a total non-cash impairment charge of Rs. 680 million. Telisma, a market leader in speech recognition, was acquired in 2008. This acquisition enabled the Company to win new customers in emerging markets. However, recently the market outlook for core products in its target markets has deteriorated and hence has resulted in impairment
    • In March, the Venezuelan Government introduced a new currency exchange process (SICAD II) which has resulted in a devaluation of their local currency against US Dollars at 49.81 Bolivars per USD as of 31st March 2014 as against the official exchange rate of 6.3 Bolivars per USD. Accordingly, the Company has used SICAD II exchange rate to re-measure the Venezuela operations and its net monetary assets. This has resulted in a forex loss of Rs. 161 million
    • Impacted by IP settlement with Synchronoss of Rs. 354 million, as part of Voxmobili divestment
Key Highlights (excluding OLI):
  • International business: Revenue increased 37.1% y-o-y, however declined 7.1% q-o-q and constituted 72% of the revenues during Q4 FY2014
    • Latin America: Revenue grew 2.7% y-o-y, declined 1.8% q-o-q
    • Other Emerging Markets: Revenues increased 7.2% y-o-y and decreased 3.3% q-o-q
    • Developed Markets:
      • Revenues showed a growth of 105.2% y-o-y and decreased 11.6% sequentially
      • OLI revenue of Rs. 216 million, an increase of 2.3% q-o-q. Due to changes in market and business scenarios, the timelines for achieving profitability have been right-shifted
    • India: Revenues showed stability and increased by 22.8% q-o-q to Rs. 641 million, partly on account of deferred revenues recognized during the quarter, while declining by 3.9% y-o-y

Q4 FY2014 Financial Highlights (excluding OLI)

  • Net Revenue remained flat q-o-q, while increasing 10.5% y-o-y to Rs. 2,035 million
    • Domestic revenues recorded a growth of 22.8% q-o-q to Rs. 641 million, partly on account of deferred revenues recognized during the quarter; however declined 3.9% y-o-y
    • International revenues recorded a decline of 8.4% q-o-q (mainly due to seasonality in our data products business and forex impact in Latam) and an increase of 18.7% y-o-y to Rs. 1,394 million (primarily driven by Europe and Asia businesses)
  • EBITDA declined 0.1% q-o-q and 3.6% y-o-y to Rs. 337 million at 16.6% margin
    • Impacted by increased content costs y-o-y in Europe and forex loss during the quarter
    • Normalized for forex impact, EBITDA increased 8.7% q-o-q with 18.0% margin
  • Net Profit was Rs. (1,243) million, as compared to Rs. 26 million in Q3 FY2014 and Rs. 108 million in Q4 FY2013
    • Impacted by IP settlement with Synchronoss of Rs. 354 million and impairment for Telisma of Rs. 680 million
    • Normalized for forex and exceptional items, Net Profit increased 68.9% q-o-q to Rs. 113 million

FY2014 Financial Highlights (excluding OLI)

  • Net Revenue increased 10.9% to Rs. 8,044 million
    • International revenues continued their robust growth trend and increased 30.0% to Rs. 5,731 million – majorly led by Europe and Latam regions
    • Domestic revenues declined 18.7% to Rs. 2,313 million
  • EBITDA decreased 2.7% to Rs. 1,453 million at 18.1% margin
    • Affected by increased content costs in Europe of Rs. 490 million and higher manpower costs on account of increments and new hires of Rs. 270 million
    • Excluding the forex impact, EBITDA declined by 7.9%
  • Net Profit for the year was Rs. (984) million as compared to Rs. 472 million last year
    • Impacted by forex losses and one-time expenses pertaining to IP settlement with Synchronoss regarding Voxmobili and Telisma impairment
    • Normalized for forex and exceptional items, Net Profit was Rs. 241 million, a decrease of 53.0% over FY2013

Other Highlights

  • The Board of Directors have recommended a Dividend of Rs. 1.50 per share payout, which represents 15% of the face value of Rs. 10 for each share
  • The Company has appointed Rajiv Pancholy as the Chief Executive Officer, effective June 2nd 2014. Press release attached

About OnMobile

OnMobile [NSE India: ONMOBILE], headquartered in Bangalore, India, and with offices in all regions of the world, delivers millions of music plays daily to mobile customers worldwide. Based on current deployments, OnMobile has the potential to reach more than 1.1 billion mobile users across several geographies. For further information, please visit www.onmobile.com

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