MakeMyTrip : Press Release ()

MAKEMYTRIP LIMITED ANNOUNCES FISCAL 2021 THIRD QUARTER RESULTS

Financial Highlights for Fiscal 2021 Third Quarter

• Gross Bookings improved to $598.8 million in 3Q21 versus $213.0 million in 2Q21, reflecting an increase of 181.5% QoQ, in constant currency(1).
• Air Ticketing Revenue improved to $18.2 million in 3Q21 versus $10.9 million in 2Q21. Adjusted Margin(2) for Air Ticketing increased to $26.0 million in 3Q21 versus $11.9 million in 2Q21.
• Hotels and Packages Revenue improved to $24.4 million in 3Q21 versus $4.4 million in 2Q21. Adjusted Margin(2) for Hotels and Packages increased to $25.2 million in 3Q21 versus $5.5 million in 2Q21.
• Bus Ticketing Revenue improved to $10.1 million in 3Q21 versus $2.7 million in 2Q21. Adjusted Margin(2) for Bus Ticketing increased to $9.0 million in 3Q21 versus $2.5 million in 2Q21.
• Other Revenue improved to $4.1 million in 3Q21 versus $3.1 million in 2Q21. Adjusted Margin(2) - Others increased to $4.1 million in 3Q21 versus $3.1 million in 2Q21.
• Results from Operating Activities was a loss of $7.3 million in 3Q21 versus a loss of $26.1 million in 2Q21, reflecting an improvement of $18.8 million QoQ; and an improvement of $17.1 million YoY versus a loss of $24.4 million in 3Q20.
• Adjusted Operating Profit(2) was $5.2 million in 3Q21 versus Adjusted Operating Loss(2) of $12.9 million in 2Q21, reflecting an improvement of $18.1 million QoQ; and an improvement of $16.2 million YoY versus a loss of $11.0 million in 3Q20.

Gurugram, India and New York, January 28, 2021 - MakeMyTrip Limited (NASDAQ: MMYT), India's leading online travel company, today announced its unaudited interim financial and operating results for its fiscal third quarter ended December 31, 2020.

Our business volumes for 3Q21 when compared to the same quarter for the prior year have continued to be significantly and negatively impacted by the economic and business conditions caused by the COVID-19 pandemic. With nationwide government-imposed lockdown orders being gradually lifted since late May 2020, we have seen continued recovery in domestic travel demand, with significant sequential quarter on quarter improvements across all our lines of businesses. International travel demand recovery continues to remain muted as most cross border restrictions are still in place.

"MakeMyTrip continues to stay focused on business revival led by gradual recovery in India's domestic travel demand, although revival of international travel demand is likely to take much longer" said Deep Kalra, Group Executive Chairman. "In addition, our cost optimization initiatives have helped us to deliver on our strategic goal of achieving Adjusted Operating Profitability(2) during the reported quarter."

Fiscal 2021 Third Quarter Financial Results

Revenue. We generated revenue of $56.8 million in the quarter ended December 31, 2020, a decrease of 61.3% (59.6% in constant currency) over revenue of $146.9 million in the quarter ended December 31, 2019, primarily as a result of a decrease of 62.1% (60.4% in constant currency) in our Revenue - air ticketing, a decrease of 66.6% (65.0% in constant currency) in our Revenue - hotels and packages, a decrease of 43.1% (40.5% in constant currency) in our Revenue - bus ticketing, and a decrease of 49.9% (47.8% 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 $21.1 million in the quarter ended September 30, 2020; an improvement of $35.7 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 interim 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
												December 31
			Air ticketing		Hotels and packages			Bus ticketing			Others*
		2019		2020		2019		2020		2019			2020		2019			2020
									(Amounts in USD thousands)
Revenue as per IFRS			47,911			18,168			72,989			24,405			17,737			10,096			8,252				4,137
Add: Customer inducement costs
recorded as a reduction of revenue		23,056		7,837		76,578		6,916		4,819			77		528				4
Less: Service cost*			27			-			43,273			6,167			1,739			1,145			169		*		19		*
Adjusted Margin(2)			70,940			26,005			106,294			25,154			20,817			9,028			8,611				4,122

• Certain loyalty program costs amounting to $0.008 million have been excluded from service cost (three months ended December 31, 2019: $1.4 million) relating to "Others".

Air Ticketing. Revenue from our air ticketing business decreased by 62.1% (60.4% in constant currency) to $18.2 million in the quarter ended December 31, 2020 from $47.9 million in the quarter ended December 31, 2019. Adjusted Margin from our air ticketing business decreased by 63.3% (61.7% in constant currency) to $26.0 million in the quarter ended December 31, 2020, from $70.9 million in the quarter ended December 31, 2019. Adjusted Margin - air ticketing includes customer inducement costs of $7.8 million in the quarter ended December 31, 2020 and $23.1 million in the quarter ended December 31, 2019, 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 64.7% (63.1% in constant currency) primarily driven by 54.2% 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 7.5% in the quarter ended December 31, 2020 compared to 7.2% in the quarter ended December 31, 2019 and 8.0% in the quarter ended September 30, 2020. The increase in Adjusted Margin % was due to incremental incentives from our suppliers in the quarter ended December 31, 2020.

Our Revenue from our air ticketing business increased to $18.2 million in the quarter ended December 31, 2020 from $10.9 million in the quarter ended September 30, 2020, representing an improvement of $7.3 million quarter on quarter due to gradual recovery in travel demand. Our Adjusted Margin from our air ticketing business increased to $26.0 million in the quarter ended December 31, 2020 from $11.9 million in the quarter ended September 30, 2020, representing an improvement of $14.1 million quarter on quarter due to gradual recovery in travel demand.

Hotels and Packages. Revenue from our hotels and packages business decreased by 66.6% (65.0% in constant currency) to $24.4 million in the quarter ended December 31, 2020, from $73.0 million in the quarter ended December 31, 2019. Our Adjusted Margin- hotels and packages decreased by 76.3% (75.1% in constant currency) to $25.2 million in the quarter ended December 31, 2020 from $106.3 million in the quarter ended December 31, 2019. Adjusted Margin - hotels and packages includes customer inducement costs of $6.9 million in the quarter ended December 31, 2020 and $76.6 million in the quarter ended December 31, 2019, 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 70.2% (68.9% in constant currency) primarily driven by 63.1% 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 December 31, 2020 was 17.9% as compared to 22.5% in the quarter ended December 31, 2019 and 16.9% in the quarter ended September 30, 2020. The decrease 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 $24.4 million in the quarter ended December 31, 2020 from $4.4 million in the quarter ended September 30, 2020, representing an improvement of $20.0 million quarter on quarter due to gradual recovery in travel demand. Our Adjusted Margin from our hotels and packages business increased to $25.2 million in the quarter ended December 31, 2020 from $5.5 million in the quarter ended September 30, 2020, representing an improvement of $19.7 million quarter on quarter due to gradual recovery in travel demand.

Bus Ticketing. Revenue from our bus ticketing business decreased by 43.1% (40.5% in constant currency) to $10.1 million in the quarter ended December 31, 2020, from $17.7 million in the quarter ended December 31, 2019. Adjusted Margin from our bus ticketing business decreased by 56.6% (54.6% in constant currency) to $9.0 million in the quarter ended December 31, 2020 from $20.8 million in the quarter ended December 31, 2019. Adjusted Margin - bus ticketing includes customer inducement costs of $0.1 million in the quarter ended December 31, 2020 and $4.8 million in the quarter ended December 31, 2019, 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 54.7% (52.6% in constant currency) driven by 51.6% 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 Revenue from our bus ticketing business increased to $10.1 million in the quarter ended December 31, 2020 from $2.7 million in the quarter ended September 30, 2020, representing an improvement of $7.4 million improvement quarter on quarter due to gradual recovery in travel demand. Our Adjusted Margin from our bus ticketing business increased to $9.0 million in the quarter ended December 31, 2020 from $2.5 million in the quarter ended September 30, 2020, representing an improvement of $6.5 million quarter on quarter due to gradual recovery in travel demand.

Other Revenue. Other revenue decreased by 49.9% (47.8% in constant currency) to $4.1 million in the quarter ended December 31, 2020, from $8.3 million in the quarter ended December 31, 2019. Our Adjusted Margin - others decreased to $4.1 million in the quarter ended December 31, 2020 from $8.6 million in the quarter ended December 31, 2019. 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 December 31, 2020. Adjusted Margin - others include customer inducement costs of $0.004 million in the quarter ended December 31, 2020 and $0.5 million in the quarter ended December 31, 2019, 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 $4.1 million in the quarter ended December 31, 2020 from $3.1 million in the quarter ended September 30, 2020, representing an improvement of $1.0 million quarter on quarter due to gradual recovery in travel demand. Our Adjusted Margin - Others increased to $4.1 million in the quarter ended December 31, 2020 from $3.1 million in the quarter ended September 30, 2020, representing an improvement of $1.0 million quarter on quarter due to gradual recovery in travel demand.

Other Income. Other income decreased to $0.5 million in the quarter ended December 31, 2020 from $0.8 million in the quarter ended December 31, 2019.

Personnel Expenses. Personnel expenses decreased by 16.0% to $26.6 million in the quarter ended December 31, 2020 from $31.7 million in the quarter ended December 31, 2019 due to cost saving measures (including salary reductions) that we have implemented in response to market conditions beginning in April 2020 and right sizing our headcount largely in our packages business in 1Q21. Based on signs of recovery in our businesses, the majority of the salary reductions that we implemented in April were restored in a phased manner to pre-COVID levels. A reduction in share based compensation costs contributed to 13.5% of the decrease in personnel expenses year on year.

Marketing and sales promotion expenses. Marketing and sales promotion expenses decreased by 82.7% to $7.8 million in the quarter ended December 31, 2020 from $45.0 million in the quarter ended December 31, 2019. The decrease in marketing and sales promotion expenses was due to the significant curtailment of these variable costs and cancellation of all discretionary marketing and sales promotion spends such as events and brand building due to 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 $14.8 million in the quarter ended December 31, 2020 and $105.0 million in the quarter ended December 31, 2019. The details are as follows:

			For the three months ended
			December 31
		2019			2020
			(Amounts in USD thousands)
Marketing and sales promotion expenses as per IFRS			44,994			7,795
Customer inducement costs recorded as a reduction of revenue			104,981			14,834
Certain loyalty program costs related to Others revenue			1,418			8

Other Operating Expenses. Other operating expenses decreased by 62.7% to $15.0 million in the quarter ended December 31, 2020 from $40.3 million in the quarter ended December 31, 2019, primarily 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 ramped down 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 December 31, 2020.

Depreciation and Amortization. Our depreciation and amortization expenses were $7.9 million in the quarter ended December 31, 2020 in comparison to $8.5 million in the quarter ended December 31, 2019.

Results from Operating Activities. As a result of the foregoing factors, our results from operating activities were a loss of $7.3 million in the quarter ended December 31, 2020 as compared to a loss of $24.4 million in the quarter ended December 31, 2019. Our Adjusted Operating Profit was $5.2 million in the quarter ended December 31, 2020 as compared to an Adjusted Operating Loss of $11.0 million in the quarter ended December 31, 2019. Our results from operating activities were a loss of $7.3 million in the quarter ended December 31, 2020 as compared to a loss of $26.1 million in the quarter ended September 30, 2020, representing an improvement of $18.8 million quarter on quarter due to gradual recovery in travel demand. Our Adjusted Operating Profit was $5.2 million in the quarter ended December 31, 2020 compared with an Adjusted Operating Loss of $12.9 million in the quarter ended September 30, 2020, representing an improvement of $18.1 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 income was $3.9 million in the quarter ended December 31, 2020 as compared to net finance cost of $5.2 million in the quarter ended December 31, 2019, primarily due to the interest income on fixed deposits and net foreign exchange gain in quarter ended December 31, 2020 mainly as a result of the appreciation of the Indian Rupee against the U.S. dollar as at December 31, 2020 as compared to September 30, 2020.