Ganesh vacates CEO role at MOL Global; signs of recovery?

  • Founder now assumes executive chairman role, two others take on co-CEO role
  • Suffers net losses in FY 2014, but indicators may be good moving forward
Ganesh vacates CEO role at MOL Global; signs of recovery?

MALAYSIAN-based and Nasdaq-listed e-payment enabler MOL Global Inc has made several key changes to its management team in a move that results in new roles for founder Ganesh Kumar Bangah and other senior officers.
 
Under the new management line-up, Ganesh (pic above), who was previously its chief executive officer (CEO), will assume the role of executive chairman.
 
In a statement, MOL Global said the move would allow Ganesh to focus more on the strategic direction of the company.
 
It also announced that Charles Ng Chee Chau and Preecha Praipattarakul have been appointed co-CEOs. Prior to these appointments, Ng was MOL’s group chief operating officer while Praipattarakul was MOL Thailand CEO.
 
“Given their extensive expertise and understanding of MOL and the payments ecosystem, I strongly believe that they will effectively lead our company for the coming years,” Ganesh said in the statement.
 
“My role as executive chairman will enable me to focus my time on advising, mentoring, and providing strategic guidance to the senior leadership team of the company and [its] subsidiaries,” he added.
 
Meanwhile, Ramesh Pathmanathan, who was the general manager of investments in Berjaya Assets Bhd, is now chief financial officer at MOL Global. Both are subsidiaries of the Berjaya Group.
 
“MOL has grown at an incredible speed within the last few years and financial management is one area that we will need to strengthen in the future.
 
“I am confident that Ramesh will be able to assist the company in strengthening our financial controls and overall financial platform as we move forward,” said Ganesh, a Digital News Asia Digerati50.
 
Last November, just about a month after it listed on Nasdaq, MOL Global announced that it would delay reporting its third quarter (Q3) 2014 financial results, and that its then chief financial officer (CFO) Allan Wong had resigned due to personal reasons.
 
MOL Global in FY 2014
 
For the fourth quarter ended Dec 31, 2014, MOL Global reported a net loss of RM36.36 million, a steep decline compared with the RM1.4 million net profit it recorded in the corresponding quarter of 2013. [RM1 = US$0.27]
 
For the full year, it recorded a net loss of RM17.91 million, versus the RM18.67 million net profit it made in 2013.
 
MOL Global said that the losses were mainly driven by several one-off costs incurred during the year, which amounted to a total of RM34.5 million.
 
These one-off costs included initial public offering (IPO) expenses, share-based compensation, non-recurring accounting costs related to its results in the third quarter of 2013, and acquisition-related costs, among others.
 
In fact, its operating expenses in 2014 jumped by 198% to RM66.2 million, from RM22.2 million in 2013, mainly as a result of the one-off items above.
 
In terms of gross profit, (a term to describe what is left after revenue is deducted by the cost of goods sold), the company managed grow by 7% to RM30.1 million in 2014 from RM28.1 million a year ago.
 
The increase in gross profit was mainly driven by the growth in its MOLPay and MMOG.asia businesses, the company said.
 
Gross margin in 2014 was 49.3%, significantly lower than the 59% in 2013. This was partly due to the growing MOLPay and PayByMe businesses, which generally command a lower margin.
 
During the fourth quarter, revenue rose 28% to RM60.97 million. For the full year, its revenue gained 18% to hit RM202.7 million. The jump was mainly helped by MOLPoints, MOLPay and MMOG.asia (see table below).

Ganesh vacates CEO role at MOL Global; signs of recovery?

The worst is over?
 
Last year may have been a milestone year for MOL Global, with its public debut on Nasdaq and with its expansion into several new markets, but it was also one of the most challenging years for the company.
 
For a start, it had a dismal debut on Nasdaq, and suffered a steep decline in share prices when it announced the delay in Q3 reporting and Wong’s resignation as CFO.
 
When MOL Global finally released its Q3 results, it told investors that there were certain errors in revenue as well as direct cost and other ancillary expenses in its consolidated statements for the six months ended June 30, 2013 and June 30, 2014; the three months ended March 31, 2014, June 30, 2014; as well as the full year ended Dec 31, 2013.
 
It said the error was because its Vietnamese unit Nganluong Joint Stock Company had reported revenue from its payment business on a gross basis, while the group’s policy is to look at revenue on a net basis.
 
Currently, MOL Global’s share price is at the US$2.34 level, more than 70% lower than when it made its debut on Nasdaq. It now has a market capitalisation of just over US$157 million.
 
From the tone of the company’s statement however, it appears that the worst is now over for MOL Global, and that it is all geared up for growth in 2015.
 
“Admittedly, we experienced some turbulence in the third quarter of 2014, but with stronger controls in place and a more experienced management team, we have emerged a more robust company,” said Ganesh.
 
“As we continue to expand our portfolio of payment services and deepen our presence in new markets such as the Middle East and South America, we are confident in our ability to achieve strong growth across all business segments in 2015,” he added.
 
Related Stories:
 
MOL Global continues to face investor backlash
 
MOL Global postpones Q3 reporting, CFO quits, shares plunge
 
MOL Global now has to deliver gold to investors
 
 
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