In Q1, Delhivery's net loss more than tripled to Rs399 crore

10 Aug 2022 , 09:47 AM

Delhivery, a logistics company that specializes in e-commerce and went public in May, posted a net loss of Rs399 crore for the quarter that ended June 30, more than tripling from the same period the previous year.

In the first quarter of 2021, there was a net loss of Rs129 crore. It reported in a regulatory filing to the BSE that freight costs increased 67% to Rs1,452 crore.

Senior executives informed investors during an earnings call that challenges combining Delhivery’s partial truckload business with its acquisition of Spoton and the departure of Singapore-based e-commerce giant Shopee caused excess capacity in Delhivery’s operations, which resulted in increased costs.

They claimed that inflation also contributed to its increased expenses.

The corporation claimed that “redundancies” brought up by the Spoton integration are raising costs.

Sahil Barua, Co-founder, and CEO of Delhivery stated, “We mentioned this up last time as well that we are an exceptionally high incremental margin firm. “Therefore, it is not unusual to witness a decline in the partial truckload business producing that level of underutilization when volumes decrease sharply.”

In an investor presentation, the company claimed that underutilization had resulted in additional costs of Rs150 crore.

Operations revenue increased by 30% to Rs1,745 crore year over year, but it decreased by 16% from Rs2,071 crore in the previous quarter as e-commerce sales remained subdued due to a lack of sale events.

Delhivery’s growth is still being driven by the e-commerce sector, which has seen a 50% increase in express parcel volumes.

As it is merging its systems with Spoton, revenue from its business-to-business sector, known as the partial truckload service (PTL), dropped 46%.

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) losses for the company came in at Rs217 crore in the quarter compared to Rs58 crore in the same quarter last year.

Any non-recurring costs, non-cash charges, depreciation and amortization, finance costs, tax, and any adjustments to lease rentals according to Indian accounting requirements are added back to the company’s earnings after tax in order to compute adjusted EBITDA.