123Greetings.com's revenues up 10% to $3.6M in Q4, profit crashes 75%

Intrasoft Technologies Ltd, which runs the e-greeting and e-commerce site 123greetings.com, reported 10 per cent increase in income to Rs 20.3 crore ($3.6 million) in the fourth quarter ended March 31, 2013, over the year-ago period. The company, however, saw its net profit nosedive 75 per cent to Rs 0.73 crore, from Rs 2.9 crore.

The company saw continued pressure on the bottom-line as its product and content development expenses almost doubled in Q4.

Intrasoft is one of the two public-listed internet firms in India (the other is Info Edge India, owner of Naukri.com). It generates revenues primarily from online advertising and online retail sales. The growth in income in the last quarter was led by an increase in online retail sales.

123Greetings has a core electronic greeting card business, a value-added service called 123Greetings Connect and a studio for artists. It also runs 123Greetings Invites and a Facebook app for inviting friends over for a party.

However, the company is slowly evolving into an e-commerce site, selling perfumes, skin-care products, home appliances, furniture and even bicycles on its website. The Kolkata-based e-greetings company is backed by the venture capital firm Intel Capital and raised Rs 53.65 crore in an IPO in 2010.

Intrasoft MD Arvind Kajaria said the highlight of the last quarter was the launch of the mobile site https://m.123greetings.com. "Revenues from mobile advertising have been encouraging and we believe this will continue to add to the bottom-line in a significant way. While EBITDA has been affected, substantial progress has been made in customer acquisition, vendor development and strengthening the supply chain," he said.

Q4: highlights

123Greetings Store, the online gifting e-commerce business, recorded 43,644 orders shipped during the quarter, averaging over 485 orders a day, compared with 359 orders a day in the corresponding quarter last year.

123Greetings Store expanded its product catalogue and during the quarter 71,052 products were listed on its websites and various marketplaces. The company had an active base of 456 vendors compared with 205 vendors in the previous corresponding period.

123Greetings Connect, a value added service, saw the number of registered users at 2,110,573 as of March 31, 2013, recording a growth of 22 per cent.

123Greetings Studio saw the number of registered users at 23,643 as of March 31, 2013, recording a growth of 53 per cent.

Annual numbers

Income grew 33 per cent to Rs 88.2 crore led by an increase in online retail sales. The company had an active base of 456 vendors compared with 205 vendors in the previous year. The operating EBITDA for the year decreased to Rs 6.02 crore compared with Rs 13.49 crore in FY12. Net profit crashed 72.2 per cent to Rs 3.05 crore.

The company decided to write off certain software resources that became obsolete and book an exceptional item of Rs 14.98 crore.