Business Context and Reporting Period
Company: Yatra Online, Inc.
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Date: June 18, 2020
Reporting Period: Preliminary and unaudited results for the three months and year ended March 31, 2020, and guidance for the three months ended June 30, 2020.
Context: The filing updates recent developments and risk factors, primarily focusing on the severe impact of the COVID-19 pandemic on the global travel industry and the company's operations in India.
Key Financial Metrics
| Metric | Three Months Ended March 31, 2020 |
Year Ended March 31, 2020 |
Three Months Ended March 31, 2019 |
Year Ended March 31, 2019 |
|---|---|---|---|---|
| Total Revenue | INR 1,398.0 million (USD 18.5 million) |
INR 7,373.3 million (USD 97.8 million) |
INR 2,258.4 million (USD 32.7 million) |
INR 9,358.6 million (USD 135.3 million) |
| Adjusted Revenue (Non-IFRS) |
INR 1,135.5 million (USD 15.1 million) |
INR 5,950.4 million (USD 78.9 million) |
INR 2,443.4 million (USD 35.3 million) |
INR 8,911.0 million (USD 128.8 million) |
| Service Costs | INR 587.1 million (USD 7.8 million) |
INR 3,043.5 million (USD 40.4 million) |
INR 880.2 million (USD 12.7 million) |
INR 4,282.8 million (USD 61.9 million) |
| Cash & Equivalents (As of March 31, 2020) |
INR 2,120.4 million (USD 28.1 million) | |||
| Cash & Equivalents (As of June 15, 2020) |
INR 2,866.7 million (USD 38.0 million) |
Note: The filing does not provide specific values for net profit, operating margins, or debt levels for the reported periods.
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased significantly for both the quarter and year ended March 31, 2020, compared to 2019. The decline is attributed to the significant impact of COVID-19 and a decrease in bookings.
- Service Costs: Service costs decreased primarily due to a reduction in the sales of holiday packages.
- Cash Flow Trends: The company is experiencing unfavorable working capital trends and material negative cash flow due to unprecedented levels of cancellations, customer refunds, and lower new bookings in Air Ticketing and Hotels and Packages segments.
- Guidance for Q1 FY2021: For the three months ended June 30, 2020, total revenue is expected to be between INR 134.3 million and INR 164.1 million (USD 1.8 million to USD 2.2 million), a drastic drop from INR 2,250.8 million (USD 32.6 million) in the same period in 2019.
Guidance, Outlook, and Risks
Management Commentary and Outlook
Management expects the COVID-19 pandemic to impact financial performance for the first quarter of fiscal year 2021 more significantly than the fourth quarter of fiscal year 2020. Recovery is expected only when cancellations stabilize and travel demand recovers. The company has implemented cost reduction initiatives, including salary reductions/freezes, work-from-home policies, rent renegotiations, and reduced marketing expenses.
Material Risks and Contingencies
- COVID-19 Pandemic: Severe restrictions on travel, border closures, and mandated lockdowns have led to high cancellation rates and refund obligations, straining liquidity.
- Termination of Ebix Merger: On June 5, 2020, Yatra terminated its Merger Agreement with Ebix, Inc. and filed a complaint in the Court of Chancery of Delaware alleging breaches by Ebix. The company seeks monetary damages, but litigation outcomes are uncertain and may divert management attention.
- ATB Acquisition: The final payment for the acquisition of Air Travel Bureau (ATB) remains pending. While arbitration proceedings were settled in October 2019, the calculation of the final purchase price adjustment is ongoing with extended timelines.
- Supplier Risks: Dependence on a small number of Indian airlines and the bankruptcy of Jet Airways pose risks to receivables and inventory access. Air India's move to a single GDS provider has also reduced revenue.
- Regulatory and Tax Risks: Evolving Indian tax laws (GST, TCS) and potential changes in the definition of "Place of Effective Management" or "Business Connection" could increase tax liabilities and compliance costs.
Investor Verification Checklist
- Liquidity Position: Verify the sustainability of cash reserves (INR 2.87 billion as of June 15, 2020) against ongoing negative cash flow from refunds and reduced bookings.
- Ebix Litigation: Monitor the status of the lawsuit against Ebix, Inc., including potential counterclaims and the impact on management focus and legal costs.
- ATB Closing: Track the progress of the final purchase price adjustment calculation for the ATB acquisition to determine if the deal will close and on what terms.
- Revenue Recovery: Assess the timeline for travel demand recovery in India and the effectiveness of cost-cutting measures in preserving profitability.
- Supplier Concentration: Evaluate the risk exposure to the top four domestic Indian airlines and the impact of airline bankruptcies or GDS changes on future revenue.