MakeMyTrip(MMYT) - 2023 Q1 - Quarterly Report

Fiscal 2023 First Quarter Results Announcement Financial Highlights MakeMyTrip reported a strong Q1 FY2023 recovery with gross bookings surging to $1.61 billion and revenue reaching $142.7 million, achieving operating profitability - CEO Rajesh Magow noted a strong recovery driven by summer holiday and pent-up leisure travel demand, despite high aviation fuel prices impacting international travel recovery[3] Q1 FY2023 Key Financial Metrics (vs. Q1 FY2022) | Metric | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Gross Bookings | $1.61 billion | $286.7 million | | Revenue | $142.7 million | $32.8 million | | Results from Operating Activities | $4.3 million profit | $19.5 million loss | | Adjusted Operating Profit | $16.5 million profit | $8.6 million loss | Business and Operating Environment Q1 FY2023 performance was significantly boosted by recovering travel demand due to summer holidays, higher vaccination rates, and lower COVID-19 infection rates, though long-term pandemic effects remain uncertain - Travel demand recovery in Q1 FY2023 was primarily driven by the summer holiday season, increased COVID-19 vaccination rates, and lower infection rates[6] - The company maintained its focus on cost optimization by leveraging a highly variable and efficient fixed cost structure[6] - Long-term uncertainty persists regarding the pandemic's effects, contingent on future virus mutations and their impact on the travel industry[7] Detailed Financial Performance Analysis Q1 FY2023 total revenue surged 334.7% to $142.7 million, achieving an operating profit of $4.3 million and narrowing the net loss to $10.0 million, while maintaining $464.8 million in cash and term deposits - Total revenue for Q1 FY2023 increased by 334.7% year-over-year to $142.7 million, driven by strong domestic travel demand recovery[8] - The company achieved an operating profit of $4.3 million from a prior-year loss of $19.5 million, with Adjusted Operating Profit reaching $16.5 million[19] - As of June 30, 2022, the company held $464.8 million in cash, cash equivalents, and term deposits, plus $130.1 million in credit facilities[23] Revenue and Adjusted Margin Analysis by Segment All segments showed remarkable year-over-year growth in Q1 FY2023, with Hotels and Packages leading at 638.9% revenue increase, and total Adjusted Margin reaching $156.2 million Segment Revenue and Adjusted Margin (Q1 FY2023 vs Q1 FY2022) | Segment | Revenue Q1'23 (USD thousands) | Revenue Q1'22 (USD thousands) | Adjusted Margin Q1'23 (USD thousands) | Adjusted Margin Q1'22 (USD thousands) | | :--- | :--- | :--- | :--- | :--- | | Air ticketing | 30,941 | 14,711 | 60,624 | 19,191 | | Hotels and packages | 84,045 | 11,374 | 66,925 | 12,253 | | Bus ticketing | 20,307 | 4,197 | 20,763 | 3,934 | | Others | 7,440 | 2,551 | 7,899 | 2,544 | | Total | 142,733 | 32,833 | 156,211 | 37,922 | Operating Expenses Analysis Operating expenses increased significantly with business recovery, notably marketing and sales promotion expenses surging 381.3% to $24.8 million due to higher variable costs and brand-building initiatives - Personnel expenses increased by 20.9% to $32.0 million, driven by annual wage increases and higher share-based compensation costs[15] - Marketing and sales promotion expenses surged by 381.3% to $24.8 million, reflecting increased variable costs and discretionary spending due to strong travel demand[16] - Other operating expenses grew by 179.3% to $31.5 million, primarily due to higher payment gateway charges and booking-related costs[17] - Depreciation and amortization expenses decreased by 6.4% to $6.9 million due to an increase in fully depreciated and amortized assets[18] Profitability and Earnings per Share Profitability dramatically improved, with net loss narrowing to $10.0 million and Adjusted Net Profit reaching $6.0 million, resulting in Adjusted Diluted Earnings per share of $0.05 - Net finance costs increased to $14.4 million from $5.4 million, primarily due to an $8.1 million foreign exchange loss from Indian Rupee depreciation against the U.S. dollar[20] Profitability and EPS (Q1 FY2023 vs Q1 FY2022) | Metric | Q1 FY2023 (in USD million) | Q1 FY2022 (in USD million) | | :--- | :--- | :--- | | Loss for the Period | ($10.0) | ($24.5) | | Adjusted Net Profit (Loss) | $6.0 | ($10.2) | | Diluted Loss per Share (in USD) | ($0.09) | ($0.22) | | Adjusted Diluted Earnings (Loss) per Share (in USD) | $0.05 | ($0.09) | Share Repurchase and Conference Call The $150 million share repurchase program was extended to November 30, 2023, with $136.0 million remaining authority, and no shares repurchased in Q1 FY2023 - The Board of Directors extended the share repurchase plan until November 30, 2023[25] - No shares were repurchased in Q1 FY2023, leaving approximately $136.0 million in remaining authority as of June 30, 2022[25] Non-IFRS Measures and Safe Harbor The company uses non-IFRS measures like Adjusted Margin and Adjusted Operating Profit for internal evaluation and peer comparison, while forward-looking statements are subject to significant risks including COVID-19 and economic volatility - Segment performance is evaluated using Adjusted Margin, which adjusts IFRS revenue for customer inducement costs and service acquisition costs to reflect value addition[28][29] - Non-IFRS measures like Adjusted Operating Profit and Adjusted Net Profit exclude share-based compensation, amortization of acquired intangibles, and certain interest and tax expenses for decision-making and competitor comparison[31] - Forward-looking statements are subject to risks including economic slowdowns, travel industry disruptions, competition, and ongoing COVID-19 pandemic effects[36] Condensed Consolidated Interim Financial Statements (Unaudited) Statement of Financial Position As of June 30, 2022, total assets were $1.314 billion, total liabilities $440.3 million, and total equity $874.2 million, with cash and cash equivalents improving to $254.0 million Key Balance Sheet Items (in USD thousands) | Account | June 30, 2022 | March 31, 2022 | | :--- | :--- | :--- | | Total assets | 1,314,457 | 1,322,744 | | Cash and cash equivalents | 253,974 | 213,283 | | Total liabilities | 440,252 | 426,269 | | Total equity | 874,205 | 896,475 | Statement of Profit or Loss and Other Comprehensive Income Q1 FY2023 total revenue was $142.7 million, with operating activities yielding a $4.3 million profit, net loss narrowing to $10.0 million, but a total comprehensive loss of $35.2 million due to foreign currency translation Income Statement Summary (in USD thousands) | Account | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Total revenue | 142,733 | 32,833 | | Result from operating activities | 4,266 | (19,515) | | Loss for the period | (10,009) | (24,453) | | Total comprehensive loss for the period | (35,208) | (9,553) | | Diluted loss per share (in USD) | (0.09) | (0.22) | Statement of Changes in Equity Total equity decreased from $896.5 million to $874.2 million, primarily due to a $35.2 million total comprehensive loss, partially offset by $12.9 million from share-based payments - Total equity decreased by $22.3 million during the quarter, from $896.5 million to $874.2 million[45] - The equity decrease was primarily driven by a $10.1 million net loss and $24.9 million in negative foreign currency translation differences[45] Statement of Cash Flows Q1 FY2023 saw $8.3 million net cash used in operating activities, $49.7 million generated from investing activities, and a $40.5 million increase in cash and cash equivalents, ending at $253.8 million Cash Flow Summary (in USD thousands) | Activity | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Net cash (used in) operating activities | (8,321) | (31,845) | | Net cash generated from (used in) investing activities | 49,653 | (112,830) | | Net cash (used in) financing activities | (797) | (1,386) | | Increase (decrease) in cash and cash equivalents | 40,535 | (146,061) | | Cash and cash equivalents at end of period | 253,785 | 149,042 | Supplementary Financial Information Information About Reportable Segments This section details segment performance, reconciling IFRS revenue to Adjusted Margin, with Q1 FY2023 total Adjusted Margin at $156.2 million on $142.7 million revenue Reconciliation of Revenue to Adjusted Margin - Q1 FY2023 (in USD thousands) | Segment | Revenue | Add: Customer Inducement Costs | Less: Service Cost | Adjusted Margin | | :--- | :--- | :--- | :--- | :--- | | Air ticketing | 30,941 | 30,191 | 508 | 60,624 | | Hotels and packages | 84,045 | 23,966 | 41,086 | 66,925 | | Bus ticketing | 20,307 | 2,200 | 1,744 | 20,763 | | All other segments | 7,440 | 467 | 8 | 7,899 | | Total | 142,733 | 56,824 | 43,346 | 156,211 | Reconciliation of IFRS to Non-IFRS Measures This section reconciles IFRS results to non-IFRS metrics, showing Q1 FY2023 IFRS operating profit of $4.3 million adjusted to $16.5 million Adjusted Operating Profit, and IFRS net loss of $10.0 million to $6.0 million Adjusted Net Profit Reconciliation of Operating Profit (in USD thousands) | Description | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Results from operating activities (IFRS) | 4,266 | (19,515) | | Add: Acquisition related intangibles amortization | 3,334 | 3,493 | | Add: Employee share-based compensation costs | 8,869 | 7,444 | | Adjusted Operating Profit (Loss) | 16,469 | (8,578) | Reconciliation of Net Profit (in USD thousands) | Description | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Profit (Loss) for the period (IFRS) | (10,009) | (24,453) | | Add: Adjustments (amortization, share-based costs, etc.) | 16,007 | 14,245 | | Adjusted Net Profit (Loss) | 5,998 | (10,208) | Selected Operating and Financial Data Q1 FY2023 operating metrics showed massive year-over-year growth, with Air Ticketing flight segments growing to 9.6 million and total gross bookings reaching $1.61 billion, a 462% increase Key Operating Metrics (in thousands) | Unit Metric | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Air Ticketing – Flight segments | 9,592 | 2,466 | | Hotels and Packages – Room nights | 6,566 | 1,462 | | Bus Ticketing – Travelled tickets | 18,719 | 4,150 | Gross Bookings (in USD thousands) | Segment | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Air Ticketing | 987,323 | 180,095 | | Hotels and Packages | 388,550 | 60,750 | | Bus Ticketing | 236,602 | 45,869 | | Total | 1,612,475 | 286,714 | Adjusted Margin % | Segment | Q1 FY2023 | Q1 FY2022 | | :--- | :--- | :--- | | Air Ticketing | 6.1% | 10.7% | | Hotels and Packages | 17.2% | 20.2% | | Bus Ticketing | 8.8% | 8.6% |