The Hindu Business Line : Rediff.com revenues down at $3.4 m

REDIFF.com India Ltd, an online provider of news, information, communication, entertainment and shopping services, has reported a sharp drop in revenues for the quarter ended June 30, 2003, at $3.4 million as compared to $6.3 million in the same quarter last year.

The loss per ADS at the EBIDTA level for the quarter was 5.6 cents or $1.4 million compared to 5.7 cents or $1.5 million for the corresponding quarter of 2002.

Net loss per ADS for the quarter was 7.9 cents or $2.0 million compared to 7.0 cents or $1.8 million for the same quarter last year. The increased loss was primarily due to the strengthening of the Indian rupee against the US dollar.

"The growth in cellular subscribers has resulted in an increased usage of value-added services on the text messaging platform and we believe that increased PC penetration will result in the steady rise of Internet subscribers in the quarters ahead," says Mr Ajit Balakrishnan, Chairman and CEO, Rediff.com India Ltd.

"Our India Online business has shown solid growth this quarter on the back of fee-based services. We believe that fee-based services that consisted of mobile-based services, subscription services and merchandising will lead our future growth in India."

Its India Online service contributed $0.75 million, an increase of 25.4 per cent when compared to the same quarter last year on the strength of growth in fee based services, comprising mobile services, subscription services and merchandising.

US Publishing, which is composed of India Abroad, a weekly news publication, and Rediff USA online, saw revenues decline by 12.3 per cent to $1.4 million for the quarter ended June 30, 2003, compared to the same quarter in fiscal 2002.

Revenues from the phone card business were $1.2 million compared to $4.2 million recognised by Rediff for the same quarter last year. Lower revenues were realised due to decreased usage of US to India pre-paid phone services, reduced rates per minute, shifting of calls originating

from the US to calls originating in India, as well as the management's decision to exit from the low margin prepaid wholesale phone card business in Valucom subsidiary.

The gross margin for the quarter was $1.0 million (31 per cent) compared to $1.4 million (22 per cent) in the same quarter last year.

The company's total operating expenses decreased by $400,000 for the quarter to $2.5 million, compared to $2.9 million for the same quarter last year.

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Rediff.com revenues down at $3.4 m