Zomato narrows losses with one-time gain, revenues up
Premium- The number of orders grew 93% from a year earlier and 5% sequentially in December quarter
- Zomato’s operating revenue rose 82% to ₹1,112 crore from ₹609.4 crore in the year ago.
MUMBAI : Food aggregator Zomato Ltd narrowed its December quarter loss to ₹67.2 crore, boosted by a one-time gain of ₹315.8 crore from the sale of its stake in sports platform Fitso.
Zomato had reported a loss of ₹352.6 crore in the December quarter of the previous fiscal year and ₹435 crore in the preceding second quarter of this fiscal.
Zomato’s operating revenue rose 82% to ₹1,112 crore from ₹609.4 crore in the year ago. Operating revenue stood at ₹1,024 crore in the previous quarter. The stock rose 0.32% to ₹94.50 on Thursday.
Zomato’s dining-out business, offering discounts to customers at partner restaurants, picked up pace as eateries and bars reopened after the easing of lockdown restrictions due to a fall in covid-19 cases during the quarter.
“The revival of in-restaurant dining in Q3 FY22 led to some green shoots in our dining-out ad-sales business. Our focus is on improving our product and customer engagement while putting monetization efforts on the backburner for now," it said.
Its gross order value (GOV) grew 84.5% year-on-year and 1.7% quarter-on-quarter to ₹5,500 crore in the reporting quarter. “We believe the weak qoq growth in GOV was primarily due to a reduction in customer delivery charges, in addition to a soft impact of post-covid reopening (including some shift from delivery to dining out)," the company added.
GOV is the total value of online food delivery orders on Zomato, including taxes, delivery charges and discounts, excluding tips.
While the number of orders grew 93% from a year earlier and 5% sequentially, the average order value, which includes delivery charges, shrunk by about 3% from the preceding three months.
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The company plans to utilize the $1.7 billion cash on its balance sheet to focus on two key areas of investment—core food businesses and quick commerce.
“We made cash investments worth $225 million in the past year across three companies—Blinkit (formerly Grofers), Shiprocket and Magicpin—to reach our objective of building out quick e-commerce in India… Of these, Blinkit is the closest to how we all know the quick commerce business today."
Zomato raised ₹8,728 crore via its initial public offering in July. It has used ₹3,267 crore as of 31 December, it said in its financial statement.
On a standalone basis, the company reported a loss of ₹99 crore, compared to ₹388.4 crore a year-ago and ₹414 crore in the preceding quarter.
The group (including subsidiaries) picked up the remaining 35.44% stake in Jogo Technologies Pvt. Ltd, before selling its entire 100% stake in the firm to Curefit Services Pvt. Ltd and Curefit Healthcare Pvt Ltd for ₹37.5 crore.
“Owing to the outbreak of the global pandemic, governments across the globe deployed varied degrees of measures, including lockdown and restrictions on movement which had a negative impact on the food and entertainment sector. This, in turn, impacted the group’s operations since dining-out was suspended, which led to demand for advertisement and membership subscriptions across dining out restaurants slowing down," said Zomato. The group has 36 subsidiaries and a joint venture, Zomato Media, besides an associate, ZMT Europe.
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