Yatra's failed merger with Ebix dents the company's earnings in an already troubled quarter
- The company saw an adjusted EBITDA loss of $4.1 million for the April-June quarter, widening by over 50% from last year’s $2.7 million loss.
- Due to its failed merger with Ebix, Yatra.com said it has paid $2.2 million in legal fees.
- But the legal troubles come for the company in the same quarter when travel and tourism have already taken a hit because of the coronavirus pandemic.
AdvertisementYatra.com, one of India’s popular travel platforms, shared its first-quarter earnings report and the company that is already facing troubles due to the pandemic took another blow. Due to its failed merger with Ebix, Yatra.com has paid $2.2 million in legal fees.
The company saw an adjusted EBITDA loss of $4.1 million for the April-June quarter. The losses are nearly double of what it posted last year at $2.7 million.
“There was an adverse impact of ₹168.4 million ($2.2 million) on our operating performance in the current quarter due to legal and professional fees related to the merger transaction with Ebix, Inc. Excluding such fees, our Adjusted EBITDA loss would have been ₹141.0 million ($1.9 million),” said Dhruv Shringi, co-founder and CEO of the company in a statement.
Yatra.com’s grand merger worth $337 million with US-based software firm Ebix got called off in June 2020, and the matter is currently in court. Yatra had filed a case in the state of Delaware, US, against Ebix for a breach of the agreement.
But the legal troubles come at a time when the company is reeling under pressure, with travel and tourism taking a hit due to the COVID-19 pandemic.
|Yatra segment||Revenue in April-June quarter||Year-on-year change|
|Air ticketing revenue||$2.3 million||-85.2%|
|Hotel booking revenue||$0.2 million||-94.9%|
However, Shringi said that the company has “enough capital to withstand a prolonged slowdown in the travel industry should that occur”.
Yatra’s cost run rate has reduced
|March 2020||May 2020|
|$2.7 million||$1.2 million|
Latest bet at diversification
The company has also diversified its offerings. In July, the company said that the platform is evolving from being a travel services provider to a digital services platform.
AdvertisementYatra.com’s latest offerings will focus on the corporate side and small businesses.
These include expense management software, Artificial Intelligence-based smart space and safe space solution which will also ensure contact tracing at a workspace, online platform for consumable sourcing for hotel partners.
The company is also working with NanoTech Company – Neo Dot which identifies body temperature with a change in colour and will be helpful in crowded spaces.
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Covid-19 and a failed merger alter Yatra’s journey – the offerings look a lot different now
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