OYO net loss widens to $335 mn in FY19, revenue rises five-fold

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OYO’s valuation report filed with the Registrar of Companies in November 2019 had shown its losses ballooned more than 6.6 times to Rs 2,385 crore ($334.12 million) in FY19.

Oyo Hotels & Homes & Homes Monday said its consolidated losses rose to $335 million in the year to March 2019 from $52 million in FY18, as expansion into global markets, including key market China, entailed heavy costs.

Consolidated revenues grew nearly 5 times year-on-year to $951 million in FY19. Revenues stood at about $211 million in FY18, OYO said.

The Gurgaon-based company, however, said it narrowed its net losses in India from 24 per cent of revenue in FY18 to 14 per cent of revenue to $83 million in FY19. India contributed $604 million in revenues, registering an almost three-fold rise on a yearly basis, while revenues from China stood at $307 million; the remainder came from rest of the markets.

On the earnings call, Rohit Kapoor, chief executive officer, OYO India and South Asia, said as far as India is concerned, there is no “deadline” for any business to come to the path of Ebitda profitability — what is required is to have a clear path to profitability.

“We have the runway to keep doing our businesses with a logical outcome,” he added.

Aditya Ghosh, member, board of directors, said while among international markets, China remains a priority, the firm is also seeing a lot more traction in markets like the United States, United Kingdom and Japan.

Last year, OYO said it will invest $300 million in growing its US business.

OYO’s valuation report filed with the Registrar of Companies in November 2019 had shown its losses ballooned more than 6.6 times to Rs 2,385 crore ($334.12 million) in FY19.

The company’s revenue from operations, however, increased about 4.5 times to Rs 6,457 crore ($904.59 million), according to the report.

The audited results released on Monday are in line with the valuation report which the firm claimed to be provisional.

Since it was set up in 2013, OYO has been on an expansion spree, widening its footprint to 80 countries.

The firm said it has over 43,000 asset partners and claims to have hosted over 180 million guests from more than 120 nationalities between January-December 2019. Start-ups, however, have come under investor scrutiny post the WeWork debacle. Major global investors including SoftBank are understood to be tweaking their investment strategy and portfolio companies have been asked to chase profitability rather than valuations. —FE