Makemytrip : Announces Fiscal 2021 Fourth Quarter and Full Year Financial & Operating Results

MAKEMYTRIP LIMITED ANNOUNCES FISCAL 2021 FOURTH QUARTER AND FULL YEAR RESULTS

Financial Highlights for Fiscal 2021 Fourth Quarter and Full Year

• Gross Bookings in 4Q21 reached $759.2 million and $1,635.4 million in FY21.
• Revenue was $79.2 million for 4Q21 and $163.4 million for FY21.
• Air Ticketing Revenue improved to $24.2 million in 4Q21 versus $18.2 million in 3Q21. Adjusted Margin(2) for Air Ticketing increased to $38.2 million in 4Q21 versus $26.0 million in 3Q21.
• Hotels and Packages Revenue improved to $38.1 million in 4Q21 versus $24.4 million in 3Q21. Adjusted Margin(2) for Hotels and Packages increased to $35.6 million in 4Q21 versus $25.2 million in 3Q21.
• Bus Ticketing Revenue improved to $11.8 million in 4Q21 versus $10.1 million in 3Q21. Adjusted Margin(2) for Bus Ticketing increased to $11.0 million in 4Q21 versus $9.0 million in 3Q21.
• Other Revenue improved to $5.1 million in 4Q21 versus $4.1 million in 3Q21. Adjusted Margin(2) for Others increased to $5.2 million in 4Q21 versus $4.1 million in 3Q21.
• Results from Operating Activities was a profit of $0.3 million in 4Q21 versus a loss of $330.3 million in 4Q20. Our Results from Operating Activities were a loss of $67.7 million for FY21 versus a loss of $429.4 million for FY20.
• Adjusted Operating Profit(2) was $11.1 million in 4Q21 versus Adjusted Operating Loss(2) of $10.3 million in 4Q20 and profit of $5.2 million in 3Q21, reflecting an improvement of $5.9 million QoQ. Adjusted Operating Loss(2) was $18.0 million for FY21 versus a loss of $69.9 million for FY20.

Gurugram, India and New York, May 25, 2021 - MakeMyTrip Limited (NASDAQ: MMYT), India's leading online travel company, today announced its unaudited financial and operating results for its fiscal fourth quarter and full fiscal year ended March 31, 2021.

"MakeMyTrip continued to leverage the domestic travel recovery momentum for most part of the reported fiscal fourth quarter. The company also bolstered its liquidity with a convertible note issuance." said Deep Kalra, Group Executive Chairman. "While near term challenges will persist due to the rapid onset of a second COVID-19 wave in India since April 2021, we are well positioned to emerge as a stronger player in India's travel market post pandemic with continued focus on cost discipline."

Other information

Impact of the COVID-19 Pandemic

The impact of the global COVID-19 pandemic has severely impacted travel demand in terms of affecting consumers' sentiment and their willingness to travel, which has caused airlines and hotels in India and around the world to operate at significantly reduced service levels throughout much of calendar year 2020. The COVID-19 pandemic had also resulted in significant weakness in the macroeconomic environment and heightened volatility in financial markets. Our financial and operating results for the fourth quarter of the fiscal 2021 and full fiscal year 2021 were severely impacted by these conditions in the domestic and global economy and the travel industry.

Our business started to recover gradually following the end of India's prolonged nationwide lockdown, which was in full effect in April 2020 and most of May 2020. As the impact from the COVID-19 pandemic started to wane initially from second quarter of fiscal year 2021, our domestic business began to rebound even with limited domestic travel, demonstrating the resilience and strong pent up demand of the domestic travel market. Our revenue in the third and fourth quarter of fiscal year 2021 recovered to 38.7% and 75.5%, respectively, of revenue generated in the third and fourth quarter of fiscal year 2020. With the commencement of a phased rollout of vaccines in India from January 16, 2021, we witnessed significant recovery in domestic travel demand, with significant sequential quarter on quarter improvements across all our lines of business. However, towards the end of the fourth quarter of fiscal year 2021, India witnessed a rapid resurgence of daily recorded case counts, resulting in a second wave of COVID-19 pandemic.

We currently expect the impact of the second wave of COVID-19 pandemic on our financial results to be greater in the first quarter of the fiscal 2022 year as several state governments in India have imposed lockdowns and travel demand has been significantly impacted during April and May 2021. The extent of the effects of the COVID-19 pandemic on our business, results of operations, cash flows and growth prospects remain uncertain and would be dependent on future developments. These include, but are not limited to, the severity, extent and duration of the pandemic, its impact on the travel industries and consumer spending, rates of vaccination and the effectiveness of vaccinations against various mutations of the COVID-19 virus. While many countries have begun the process of vaccinating their residents against COVID-19, the large scale and challenging logistics of distributing the vaccines, efficacy of the vaccines against new variants of the virus, etc. may contribute to delays in economic recovery. We are cautiously optimistic of some domestic travel recovery starting from the second quarter of the fiscal year ending March 31, 2022.

Fiscal 2021 Fourth Quarter Financial Results

Revenue. We generated revenue of $79.2 million in the quarter ended March 31, 2021, a decrease of 24.5% (23.1% in constant currency(1)) over revenue of $104.9 million in the quarter ended March 31, 2020, primarily as a result of a decrease of 32.4% (31.3% in constant currency) in our Revenue - air ticketing, a decrease of 19.9% (18.4% in constant currency) in our Revenue - hotels and packages, a decrease of 19.6% (18.0% in constant currency) in our Revenue - bus ticketing, and a decrease of 25.3% (23.4% in constant currency) in our Revenue - others, each as further described below. The decrease in revenue was primarily due to the continued impact of the COVID-19 pandemic, including lower travel demand due to travel restrictions. Our revenue in the current reported quarter increased from $56.8 million in the quarter ended December 31, 2020; an improvement of $22.4 million quarter on quarter due to gradual recovery in travel demand.

The table below summarizes our segment profitability in terms of revenue and Adjusted Margin in each segment. For more information, see "Information About Reportable Segments" in our condensed consolidated financial statements included elsewhere in this release. Also see "About Key Performance Indicators and Non-IFRS Measures" elsewhere in this release.

											For the three months ended March 31
					Air ticketing		Hotels and packages			Bus ticketing			Others*
				2020		2021		2020		2021		2020			2021		2020			2021
											(Amount in USD thousands)
	Revenue as per IFRS			35,845			24,216			47,538			38,062			14,694			11,809			6,869				5,134
	Add: Customer inducement costs
	recorded as a reduction of revenue		12,055		14,316		41,913		9,855		3,815			432		415				71
	Less: Service cost*
					105			287			24,074			12,345			1,687			1,253			97		*		37		*
	Adjusted Margin(2)			47,795			38,245			65,377			35,572			16,822			10,988			7,187				5,168

• Certain loyalty program costs amounting to $0.003 million have been excluded from service cost for the three months ended March 31, 2021 (three months ended March 31, 2020: $1.4 million) relating to "Others".

Air Ticketing. Revenue from our air ticketing business decreased by 32.4% (31.3% in constant currency) to $24.2 million in the quarter ended March 31, 2021 from $35.8 million in the quarter ended March 31, 2020. Adjusted Margin from our air ticketing business decreased by 20.0% (18.5% in constant currency) to $38.2 million in the quarter ended March 31, 2021, from $47.8 million in the quarter ended March 31, 2020. Adjusted Margin - air ticketing includes customer inducement costs of $14.3 million in the quarter ended March 31, 2021 and $12.1 million in the quarter ended March 31, 2020, recorded as a reduction of revenue. These customer inducement costs added back to Adjusted Margin is intended to reflect the way we view our ongoing business. Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue. This decrease in Adjusted Margin - air ticketing was due to a decrease in gross bookings of 38.2% (37.2% in constant currency) primarily driven by 25.2% decrease in the number of air ticketing flight segments year over year, primarily due to the continued impact of the COVID-19 pandemic, including lower travel demand due to travel restrictions. Further, our Adjusted Margin % (defined as Adjusted Margin as a percentage of gross bookings and previously labeled adjusted net revenue margin) was 8.9% in the quarter ended March 31, 2021 compared to 6.9% in the quarter ended March 31, 2020 and 7.5% in the quarter ended December 31, 2020. The increase in Adjusted Margin % was due to incremental incentives from our air ticketing suppliers to drive travel growth in the quarter ended March 31, 2021.

Our Revenue from our air ticketing business increased to $24.2 million in the quarter ended March 31, 2021 from $18.2 million in the quarter ended December 31, 2020, representing an improvement of $6.0 million quarter on quarter due to gradual recovery in travel demand. Our Adjusted Margin from our air ticketing business increased to $38.2 million in the quarter ended March 31, 2021 from $26.0 million in the quarter ended December 31, 2020, representing an improvement of $12.2 million quarter on quarter due to gradual recovery in travel demand.

Hotels and Packages. Revenue from our hotels and packages business decreased by 19.9% (18.4% in constant currency) to $38.1 million in the quarter ended March 31, 2021, from $47.5 million in the quarter ended March 31, 2020. Our Adjusted Margin- hotels and packages decreased by 45.6 % (44.4% in constant currency) to $35.6 million in the quarter ended March 31, 2021 from $65.4 million in the quarter ended March 31, 2020. Adjusted Margin - hotels and packages includes customer inducement costs of $9.9 million in the quarter ended March 31, 2021 and $41.9 million in the quarter ended March 31, 2020, recorded as a reduction of revenue. These customer inducement costs added back to Adjusted Margin are intended to reflect the way we view our ongoing business. Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue. Gross bookings decreased by 37.6% (36.5% in constant currency) primarily driven by 27.5% decrease in the number of hotel-room nights year over year, primarily due to the continued impact of the COVID- 19 pandemic, including lower travel demand due to travel restrictions. Our Adjusted Margin % in the quarter ended March 31, 2021 was 18.0% as compared to 20.6% in the quarter ended March 31, 2020 and remained at level of 17.9% in the quarter ended December 31, 2020. The year on year decrease in Adjusted Margin % was primarily due to margin reductions for certain categories of hotels to support our hotel service providers during the COVID-19 pandemic and also due to lower share of high-margin budget hotels.

Our Revenue from our hotels and packages business increased to $38.1 million in the quarter ended March 31, 2021 from $24.4 million in the quarter ended December 31, 2020, representing an improvement of $13.7 million quarter on quarter due to gradual recovery in travel demand. Our Adjusted Margin from our hotels and packages business increased to $35.6 million in the quarter ended March 31, 2021 from $25.2 million in the quarter ended December 31, 2020, representing an improvement of $10.4 million quarter on quarter due to gradual recovery in travel demand.

Bus Ticketing. Revenue from our bus ticketing business decreased by 19.6% (18.0% in constant currency) to $11.8 million in the quarter ended March 31, 2021, from $14.7 million in the quarter ended March 31, 2020. Adjusted Margin from our bus ticketing business decreased by 34.7% (33.4% in constant currency) to $11.0 million in the quarter ended March 31, 2021 from $16.8 million in the quarter ended March 31, 2020. Adjusted Margin - bus ticketing includes customer inducement costs of $0.4 million in the quarter ended March 31, 2021 and $3.8 million in the quarter ended March 31, 2020, recorded as a reduction of revenue. These customer inducement costs added back to Adjusted Margin is intended to reflect the way we view our ongoing business. Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue. Gross bookings decreased by 32.4% (31.2% in constant currency) driven by 30.1% decrease in the number of bus tickets travelled year over year, primarily due to the continued impact of the COVID-19 pandemic, including lower travel demand due to travel restrictions. Our Adjusted Margin % was 8.2% in the quarter ended March 31, 2021, which remained at a similar level of 8.5% in the quarter ended March 31 2020.

Our Revenue from our bus ticketing business increased to $11.8 million in the quarter ended March 31, 2021 from $10.1 million in the quarter ended December 31, 2020, representing an improvement of $1.7 million improvement quarter on quarter due to gradual recovery in travel demand. Our Adjusted Margin from our bus ticketing business increased to $11.0 million in the quarter ended March 31, 2021 from $9.0 million in the quarter ended December 31, 2020, representing an improvement of $2.0 million quarter on quarter due to gradual recovery in travel demand.

Other Revenue. Other revenue decreased by 25.3% (23.4% in constant currency) to $5.1 million in the quarter ended March 31, 2021, from $6.9 million in the quarter ended March 31, 2020. Our Adjusted Margin - others decreased to $5.2 million in the quarter ended March 31, 2021 from $7.2 million in the quarter ended March 31, 2020. This was primarily due to lower insurance income, advertisement income and other ancillary revenues due to the continued impact of the COVID-19 pandemic, including lower travel demand due to travel restrictions, which was partially offset by higher brand alliance income in the quarter ended March 31, 2021. Adjusted Margin - others include customer inducement costs of $0.1 million in the quarter ended March 31, 2021 and $0.4 million in the quarter ended March 31, 2020, recorded as a reduction of revenue. These customer inducement costs added back to Adjusted Margin is intended to reflect the way we view our ongoing business. Under IFRS, these customer inducement costs are required to be recorded as a reduction of revenue.

Our other revenue increased to $5.1 million in the quarter ended March 31, 2021 from $4.1 million in the quarter ended December 31, 2020, representing an improvement of $1.0 million quarter on quarter due to gradual recovery in travel demand. Our Adjusted Margin - Others increased to $5.2 million in the quarter ended March 31, 2021 from $4.1 million in the quarter ended December 31, 2020, representing an improvement of $1.1 million quarter on quarter due to gradual recovery in travel demand.

Other Income. Other income increased to $1.4 million in the quarter ended March 31, 2021 from $0.1 million in the quarter ended March 31, 2020.

Personnel Expenses. Personnel expenses decreased by 16.6% to $28.7 million in the quarter ended March 31, 2021 from $34.5 million in the quarter ended March 31, 2020. This was primarily due to reduction in share based compensation costs in the quarter ended March 31, 2021, partially offset by annual wage increases implemented in the quarter ended March 31, 2021.

Marketing and sales promotion expenses. Marketing and sales promotion expenses decreased by 56.5% to $11.8 million in the quarter ended March 31, 2021 from $27.0 million in the quarter ended March 31, 2020. The decrease in marketing and sales promotion expenses was due to the significant curtailment of these variable costs on account of our strategy of optimizing marketing and sales promotion spends and cancellation of all discretionary marketing and sales promotion spends such as events and brand building and the impact of the COVID- 19 pandemic. Our marketing expenses primarily include online video and display advertising on websites, television and in print, search engine marketing, referrals from meta-search and travel research websites and other media costs such as public relations and sponsorships.

Additionally, we have incurred customer inducement costs recorded as a reduction of revenue and certain loyalty program costs of $24.7 million in the quarter ended March 31, 2021 and $59.6 million in the quarter ended March 31, 2020. The details are as follows:

			For the three months ended
			March 31
		2020			2021
			(Amounts in USD thousands)
Marketing and sales promotion expenses as per IFRS			27,029			11,768
Customer inducement costs recorded as a reduction of revenue			58,198			24,674
Certain loyalty program costs related to Others revenue			1,427			3

Other Operating Expenses. Other operating expenses decreased by 72.5% to $18.1 million in the quarter ended March 31, 2021 from $65.8 million in the quarter ended March 31, 2020, primarily due to a one-time provision for litigations of $30.8 million made in the quarter ended March 31, 2020 for a dispute related to a prior acquisition and further due to a decrease in payment gateway charges and outsourcing fees as a result of less bookings due to lower travel demand and nation-wide lockdown implemented in India due to the COVID-19 pandemic. We have also significantly reduced our outsourced teams at our call centres and various other general and administrative expenses in response to market conditions, which led to a further decrease in our operating expenses in the quarter ended March 31, 2021.

Depreciation and Amortization. Our depreciation and amortization expenses were $7.8 million in the quarter ended March 31, 2021 in comparison to $8.5 million in the quarter ended March 31, 2020.

Impairment of goodwill. Our goodwill impairment charge was nil in the quarter ended March 31, 2021. In the fourth quarter of fiscal year 2020, we recorded a goodwill impairment charge of $272.2 million as a result of the significant negative impact related to COVID-19 pandemic on the travel industry and our stock price and market capitalization, we concluded that sufficient indicators existed to require us to perform a quantitative assessment of goodwill and, following that assessment, we recorded an impairment charge of our goodwill amounting to $272.2 million, primarily related to our Goibibo business, which we acquired in fiscal year 2017.

Results from Operating Activities. As a result of the foregoing factors, our results from operating activities were a profit of $0.3 million in the quarter ended March 31, 2021 as compared to a loss of $330.3 million in the quarter ended March 31, 2020. Our Adjusted Operating Profit was $11.1 million in the quarter ended March 31, 2021 as compared to an Adjusted Operating Loss of $10.3 million in the quarter ended March 31, 2020. Our results from operating activities were a profit of $0.3 million in the quarter ended March 31, 2021 as compared to a loss of $7.3 million in the quarter ended December 31, 2020, representing an improvement of $7.6 million quarter on quarter due to gradual recovery in travel demand. Our Adjusted Operating Profit was $11.1 million in the quarter ended March 31, 2021 as compared with $5.2 million in the quarter ended December 31, 2020, representing an improvement of $5.9 million quarter on quarter due to gradual recovery in travel demand. For a description of the components and calculation of "Adjusted Operating Profit (Loss)" and a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure "Results from operating activities", see - "About Key Performance Indicators and Non-IFRS Measures" elsewhere in this release.

Net Finance (Income) Cost. Our net finance cost was $1.3 million in the quarter ended March 31, 2021 as compared to net finance cost of $8.4 million in the quarter ended March 31, 2020, primarily due to the interest income on fixed deposits and net foreign exchange gain in quarter ended March 31, 2021 mainly as a result of the appreciation of the Indian Rupee against the U.S. dollar as at March 31, 2021 as compared to December 31, 2020.