Yatra Online, Inc. — Form 20-F Summary
Reporting period: Fiscal year ended March 31, 2019 (FY2019), filed July 31, 2019. Although the request specifies 2018 Q4, this is an annual filing; the provided text does not give a clear standalone fourth-quarter financial statement. Financial statements are prepared under IFRS and presented primarily in Indian rupees (INR).
Business context
Yatra operates an India-focused online travel platform serving leisure and corporate customers, with air ticketing and hotels/packages as its main segments. It also offers travel-agent distribution, rail and bus tickets, homestays and other travel services. The company acquired Travel.Co.In Limited (TCIL) in February 2019; FY2019 includes TCIL from February and ATB, in which Yatra held a majority stake, for the year. This affects comparability with prior periods.
Financial and operating metrics
Unless stated otherwise, INR figures below are in millions. FY2019 amounts in U.S. dollars are shown only where useful; the filing translates at INR 69.16 per US$1.
| Metric | FY2019 | Prior comparable period |
|---|---|---|
| IFRS revenue | INR 9,358.6 million | INR 12,248.5 million in FY2018; down 23.6% |
| Adjusted Revenue (non-IFRS) | INR 8,911.0 million | INR 7,407.8 million in FY2018; up 20.3% |
| Gross Bookings | INR 111.15 billion | INR 92.54 billion in FY2018; up 20.1% |
| Operating loss | INR 2,578.2 million | INR 3,360.1 million in FY2018 |
| Net loss | INR 1,193.6 million | INR 4,052.0 million in FY2018 |
| Adjusted EBITDA loss (non-IFRS) | INR 1,228.3 million | INR 1,910.3 million in FY2018 |
| Operating cash flow | INR 3,542.1 million used | INR 881.9 million used in FY2018 |
| Cash and cash equivalents at year-end | INR 2,161.0 million | INR 2,465.1 million at March 31, 2018 |
| Term deposits at year-end | INR 1,029.5 million; INR 1,010.3 million pledged | INR 1,012.1 million at March 31, 2018 |
| Borrowings at year-end | INR 1,176.4 million | INR 851.8 million at March 31, 2018 |
The cash flow statement reports year-end cash net of bank overdrafts of INR 1,363.7 million; the balance sheet reports cash and cash equivalents of INR 2,161.0 million and current borrowings include an INR 797.3 million overdraft. Current assets were INR 9,719.9 million and current liabilities INR 9,921.9 million. Management said available cash and expected operating cash generation should cover requirements for at least 12 months.
- Margins: Air Ticketing net revenue margin was 5.8%, down from 6.3% in FY2018. Hotels and Packages margin was reported as 13.9% in selected data and approximately 14.0% in the discussion, versus 12.7% in FY2018.
- Bookings and volumes: Air Ticketing Gross Bookings rose 23.3% to INR 97.6 billion; Hotels and Packages Gross Bookings increased 0.9% to INR 13.5 billion. Air passengers booked increased 15%, hotel room nights 12%, while holiday-package passengers declined 20%.
- Equity and funding: Equity attributable to shareholders was INR 2,359.7 million at year-end, compared with negative INR 224.9 million a year earlier. FY2019 financing cash flow was INR 2,904.6 million, primarily reflecting net proceeds from the June 2018 follow-on share offering.
Changes, unusual items and management commentary
- IFRS 15 adoption from April 1, 2018 moved INR 3,571.5 million of customer inducement, acquisition and loyalty costs from marketing expense to a reduction of revenue. FY2018 comparatives were not restated, so the reported revenue decline is not directly comparable. Management’s non-IFRS Adjusted Revenue adds these costs back and deducts service costs.
- FY2019 net loss improved substantially, but a INR 1,667.2 million non-cash gain from the change in fair value of warrants materially affected the result. Adjusted EBITDA remained negative.
- Operating cash outflow widened, with management attributing this largely to working-capital use: receivables increased and payables decreased. Trade and other receivables reached INR 4,921.3 million; the allowance for doubtful receivables rose to INR 486.3 million.
- Other operating expenses rose 21.1% to INR 3,975.8 million, including higher payment, communication, legal and commission costs, bad-debt provisions, and INR 485.3 million of ATB contingent-consideration remeasurement expense. Finance costs rose to INR 263.3 million, including foreign-exchange losses.
- Jet Airways’ cessation of operations and airline inventory changes reduced GDS-related Air Ticketing revenue by approximately INR 65.2 million. Yatra also cited supplier concentration, reduced airline commissions and ongoing GDS contract renegotiations as risks.
- Yatra closed physical retail locations to reduce costs; management reported lower holiday-package sales associated with the closures. It outsourced certain call-center services and reported employee headcount of 2,514 at March 31, 2019, down from 3,391 a year earlier.
- Management expected FY2020 capital expenditure of approximately INR 200–300 million. IFRS 16 adoption from April 1, 2019 was expected to recognize right-of-use assets of about INR 170.6 million and lease liabilities of about INR 205.5 million, with a favorable effect on operating profit but an unfavorable effect on profit after tax.
Risks, contingencies and subsequent events
- Proposed Ebix merger: Announced July 16, 2019, after fiscal year-end. The fixed exchange ratio provides for 0.005 Ebix Series Y convertible preferred share per Yatra ordinary share; each preferred share is convertible into 20 Ebix common shares. Completion depends on shareholder and other closing approvals, warrant cancellation and other conditions. In specified termination circumstances, Yatra may owe an $8.16 million termination fee or up to $4 million of expense reimbursement.
- ATB dispute: Yatra had acquired 50.94% of ATB and had not completed the second closing for the remaining shares because the final payment calculation remained disputed. An ATB seller filed a criminal complaint; Delhi Police opened an investigation, and court-referred arbitration had commenced. The filing reports an INR 1,190.0 million acquisition liability at year-end and an INR 200 million advance against the second closing.
- Tax proceedings: The filing describes multiple contested Indian service-tax and income-tax matters. Its contingent-liability note lists INR 251.3 million of service-tax claims and INR 96.6 million of income-tax claims as not provided for; separate narrative disclosures describe additional demands, penalties and appeals. Management said it did not consider the claims probable, but outcomes remain uncertain.
- Other material risks: Sustained losses and cash burn, collection risk and supplier receivables, competition and margin pressure, foreign-exchange movements without hedging, changing Indian tax and e-commerce rules, and dependence on third-party systems. Jet Airways insolvency and the ATB dispute add counterparty and execution risk.
- Management transition: CFO Alok Vaish had advised that he intended to resign effective mid-October 2019. Management identified replacement hiring and continuity of reporting as risks.
Most important facts for investors to verify
- Reconcile IFRS revenue with Adjusted Revenue and confirm the impact of IFRS 15, which makes the FY2019-versus-FY2018 reported revenue comparison non-comparable without adjustment.
- Assess the causes and sustainability of the sharp increase in operating cash use, receivables growth and bad-debt provisions; confirm the availability of cash after accounting for pledged deposits and overdrafts.
- Separate recurring operating performance from the warrant fair-value gain, ATB remeasurement expense and other adjustments; review the definitions and reconciliations of all non-IFRS measures.
- Track airline commissions, GDS contract renewals, Jet Airways-related recoveries and the effect of inventory changes on Air Ticketing margins.
- Check the current status and potential cash exposure of the ATB second closing, arbitration, criminal investigation and tax disputes, including why separate disclosures present different claim totals.
- Verify the status and final consideration of the Ebix transaction, required shareholder and regulatory approvals, warrant cancellation, and any termination-fee exposure.