Infibeam plunges to Q1 loss as payment outgoes jump

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Infibeam Avenues, one of India’s largest home-grown e-commerce companies, reported a standalone loss of Rs 14 cr for the first quarter due to a sharp increase in payment gateway charges.

While operating revenue for the Apr-Jun quarter increased sequentially by Rs 5.3 cr to Rs 91.34 cr, payment gateway charges jumped by a whopping Rs 24.5 cr to Rs 75 cr, plunging the company into losses.

Infibeam is expected to be using CCAvenue, in which it has a stake, to do most of the payments processing work it undertakes for its clients. As such, part of the money that is paid in the form of payment processing charge would come back to Infibeam Avenues on its consolidated numbers.

Unlike previous years, Infibeam did not report the profit and loss account of its subsidiaries this time, and it is not known how much of the money paid to the payment gateway would ultimately come back into Infibeam’s books.

In addition, the company last quarter completed the acquisition of Vavian International Ltd, a Dubai-based digital payment processing company with annual processing volume of 1 bln UAE dirhams (Rs 1,920 cr). The acquisition was made through a subsidiary in the Middle East, where the company also runs an IT services business of considerable size.

It said it would disclose financial details of subsidiaries only once a year from now on.

“Considering the large scale of recently acquired business, the company may not be able to prepare accounts of such newly acquired subsidiaries for preparation of consolidated financial statements within the prescribed timelines,” it said.

“The Company will now declare and submit the Unaudited Standalone Financial Results along with the Limited Review Report for the first three quarters of Financial Year 2018-19 and Annual Audited Standalone and Consolidated Financial Results and Statements for the 4th quarter and for the Financial Year 2018-19.”

Even though final numbers from subsidiaries were not disclosed, it said it ‘believes’ that revenue from subsidiaries were at 139 cr, higher than its own revenues of Rs 91 cr.

EBITDA from subsidiaries is likely to have been Rs 43.8 cr, compared to a loss of 2.9 cr at the listed firm.

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