OnMobile Q1 PAT jumps on forex gains, revenue up 2.4% to Rs 189.7Cr; stock slumps

Bangalore-based mobile VAS firm OnMobile Global Ltd saw its share price slump almost 18 per cent on Wednesday despite reporting 47.6 per cent rise in net profit for the quarter ended June 30, 2013 as earnings was largely boosted by forex gains. Consolidated net profit rose to Rs 14 crore against Rs 9.5 crore in Q1 FY13. This was boosted by forex gains worth Rs 9.9 crore during the quarter.

EBITDA increased by 48.1 per cent to Rs 51.8 crore with 27.3 per cent EBITDA margin. Normalised for forex impact, EBITDA declined 3.3 per cent and net profit declined 51.7 per cent.

The company, which offers services in 59 countries, saw a marginal increase in its net revenues for the quarter despite an over 19 per cent rise in international revenues, due to poor performance in the domestic market.

Net revenue for Q1 increased 2.4 per cent to 189.7 crore. Revenues from the domestic market declined 20.1 per cent to Rs 64.4 crore as a result of continued adverse scenario arising from the implementation of TRAI regulations. However, revenues from the international businesses rose 19.8 per cent to Rs 125.3 crore.

Revenue from the international business was primarily driven by the Latin American market, which recorded a growth of 49.5 per cent. African and European businesses also contributed to the international revenues which grew 28.2 per cent and 12.5 per cent, respectively.

The firm, which recently announced a deal with South Africa's MTN, said the arrangement involves provision of ring back tone services across 21 countries with likely revenue of $80-$120 million over five years. It also recently closed the previously announced acquisition of Livewire Mobile.

It also referred to the recent guidelines by sector regulator TRAI which has mandated double confirmation for activation of VAS services, across channels with the second-confirmation to happen through a consent gateway operated by third parties. This is with effect from July 11, 2013. The firm said it expects moderate impact due to user experience and technical challenges related to second confirmation from a third-party consent gateway system.

(Edited by Joby Puthuparampil Johnson)