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Mol Announces Second Quarter 2015 Unaudited Financial Results

The following excerpt is from the company's SEC filing.

KUALA LUMPUR, Malaysia, August 21, 2015 (GLOBE NEWSWIRE) -- MOL Global, Inc. (Nasdaq:MOLG) ("MOL" or the "Company"), a leading e-payment enabler for online goods and services in emerging and developed markets, today announced its unaudited financial results for the second quarter of 2015.

Second Quarter 2015 Highlights

Consolidated revenue

increased by 13.4% to MYR54.7 million (US$14.5 million) from MYR48.2 million in the prior year period.

MOLPoints’ segment revenue

increased by 26.3% to MYR38.3 million (US$10.1 million) from MYR30.3 million in the prior year period.

MO LReloads’ segment revenue

increased by 8.0% to MYR9.6 million (US$2.5 million) from MYR8.9 million in the prior year period.

MOLPay’s segment revenue

increased by 36.2% to MYR4.1 million (US$1.1 million) from MYR3.0 million in the prior year period.

MMOG.asia’s segment revenue

decreased by 33.8% to MYR2.2 million (US$0.6 million) from MYR3.4 million in the prior year period.

Mr. Charles Ng, Co-CEO of MOL, stated, “We are pleased to report solid top-line growth of 13.4% year over year, driven by continued revenue and volume growth in our core MOLPoints, MOLReloads, and MOLPay business lines. The MOLPoints business successfully signed approximately 40 new mobile games, and we plan to further focus on this mobile growth segment. In addition, we have now expanded our carrier billing business, PayByMe, by setting-up a separate entity in the Middle East as well as strengthening our presence in Turkey with Games Sultan and PaytoGo. We are also pleased to announce the successful launch of the mobile version of our popular PC game,

Boomz,

in Mandarin for Malaysia and Singapore

and preliminary numbers have indicated that the mobile revenues exceeded PC-based legacy game revenue during July of 2015. In addition, we expect to launch new language versions of

in both Thai and English for Southeast Asia excluding Vietnam before the end of the year to further fortify our mobile strategy. However, we experienced slight pressure on overall profitability this past quarter as a result of additional expenditures, but believe that the revenue growth strategies coupled with a tighter grip on expenses will allow us to grow our profits going forward. We are excited by the numerous key initiatives being developed and are confident in our position as a leading e-payment enabler in emerging markets.”

Mr. Ramesh Pathmanathan, Group Chief Financial Officer of MOL, stated, “We continue to see growth in our top-line driven primarily by our MOLPoints business. Similar to the previous quarter, we saw slight margin compression mainly due to a shift in revenue mix. Revenues from PayByMe and MOLPay, are lower margin businesses compared to other MOLPoints businesses and continue to grow at a faster rate and contribute more to our overall revenues. This, coupled with the decline in MMOG.asia segment revenue, led to a decline in our gross profitability as compared to the prior year period. Together with other key initiatives, including our mobile version of

we are confident that we will be able to provide consistent long-term value for our shareholders”.

Business Milestones

Expanded MOLPoints in Russia through relationships entered into by PayByMe, the Company’s mobile carrier billing business, with two established Russian telecom companies via PayByMe.

Expanded MOLPoints in Thailand through partnership agreement with 7-Eleven, a popular convenience store. Approximately 8,000 7-Eleven stores across Thailand are expected to roll out MOLPoints during the second half of 2015.

Expanded MOLPay through a strategic alliance with 2C2P, a leading e-commerce payment gateways that provide merchants with the widest online and offline payment channel options in Malaysia, Thailand, and Indonesia.

Second Quarter 2015 Financial Results

CONSOLIDATED REVENUE

Consolidated revenue increased by 13.4% to MYR54.7 million (US$14.5 million) from MYR48.2 million in the prior year period. Consolidated revenue increased primarily due to the growth of MOLPoints, MOLReloads and MOLPay, and was partially offset by a reduction in MMOG.asia segment revenue.

Three months ended June 30,

% of Revenue

YoY Change

(in millions)

Net Revenue

Total

MOLPoints segment revenue

increased by 26.3% to MYR38.3 million (US$10.1 million) from MYR30.3 million in the prior year period primarily due to an increase in volume of 11.7% to MYR188.9 million in the second quarter of 2015 from MYR169.2 million in the prior year period. The top three territories represent approximately 82.0% of our total payment volumes, including; Thailand (32.1%), Malaysia (25.6%) and the combination of Turkey and the Middle East (24.0%). Revenue from Thailand increased by 20.5% while payment volume decreased by 2.1% in the second quarter of 2015 from the prior year period. Volume declined due to a shift from PC games to mobile games. Revenues from Malaysia decreased by 4.6% while payment volumes grew by 1.2% in the second quarter of 2015 from the prior year period due to a reduction in our revenue share or "take rate" of MOLPoints. Revenue and payment volume from Turkey and Middle East grew by 167.4% and 98.9% respectively, in the second quarter of 2015 from the prior year period primarily due to PayByMe, which we acquired in September 2014. In addition, revenue and payment volume from Rixty, which operates MOLPoints in the United States and Brazil, grew by 71.4% and 58.4%, respectively, in the second quarter of 2015 compared to the

__________________________________

Total revenue include others segment.

prior year period, and now represents 7.7% of total MOLPoints volumes. Our overall MOLPoints take rate also improved by 2.4%, mainly arising from improvements in Thailand, United States and Brazil and PayByMe.

MOLReloads segment

increased by 8.0% to MYR9.6 million (US$2.5 million) from MYR8.9 million in the prior year period primarily due to an increase in volume of 18.8% to MYR383.6 million from MYR323.0 million. This was due to increased volume in Malaysia and the Philippines, which now represent 92.3% and 6.4% of total MOLReloads volume, respectively. In addition, MOLReloads in Thailand expanded more than six-fold, although it still represents only 1.3% of total volumes. Our overall MOLReloads take rate for the second quarter 2015 declined marginally compared to the prior year period.

MOLPay segment revenue

increased by 36.2% to MYR4.1 million (US$1.1 million) from MYR3.0 million in the prior year period primarily due to an increase in volume

of 90.0% to MYR132.0 million from MYR69.5 million. MOLPay’s volume in Vietnam and Malaysia grew by 91.5% and 86.3%, respectively and represents 71.1% and 28.9% of total MOLPay volume, respectively. Our overall MOLPay take rate for the second quarter of 2015 was lower than the prior year period due to the revenue mix from our diverse merchant base, with larger merchants contributing greater volumes at relatively lower take rates than smaller merchants.

decreased by 33.8% to MYR2.2 million (US$0.6 million) from MYR3.4 million in the prior year period. The decrease of this high margin segment was primarily due to the declining popularity of our legacy online PC games portfolio, which saw a decrease

of 55.1% to MYR2.6 million from MYR5.7 million. The decrease in volume was primarily due to a rapidly shifting industry trend from PC games to mobile games. Our overall MMOG.asia take rate for the second quarter 2015 was higher compared to the prior year period, which marginally helped mitigate the decline in revenue.

DIRECT COST AND OTHER ANCILLARY EXPENSES

Direct cost and other ancillary expenses increased by 44.8% to MYR31.1 million (US$8.3 million) from MYR21.5 million in the prior year period.

Total direct cost and other ancillary expenses include others segment.

MOLPoints segment direct cost and other ancillary expenses

increased by 62.7% to MYR22.6 million (US$6.0 million) from MYR13.9 million in the prior year period primarily due to our mobile carrier business, PayByMe, which we acquired in September 2014, in addition to volume growth in Malaysia and Brazil and the United States. PayByMe, which generally incurs higher costs than the other components of our MOLPoints segment, represented 32.4% of MOLPoints segment direct costs and other ancillary expenses. In addition, the increase in segment cost was also due to higher channel costs in Thailand and Turkey...


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