iCar Asia sees record revenue in first half of 2018
By Digital News Asia August 28, 2018
- Online classifieds for used cars continues to be biggest contributor
- Malaysian business is expected to become run-rate EBITDA positive in September
ICAR Asia Limited, on Aug 27 released its financial report for the first half of 2018. The company saw revenue growing to over A$5 million (US$3.66 million) for the first half of 2018 (1H18) for the first time ever. iCar Asia generated A$5,008,342 (US$3,668,020) in revenue (1H17: A$4,482,592), an increase of 12%.
Revenues from used car sales and related services (2/3 of total revenues) continued to grow strongly at 35% during 1H18. New car related revenues (1/3 of total revenues) were impacted by the General Election in Malaysia in May, resulting in revenue from media and events being retimed as events and online campaigns were rescheduled to 3Q.
Due to the retiming of revenues, the company expects to have its largest ever year-on-year (y-o-y) 3Q revenue growth in excess of 50%.
Operating expenses decreased 2% in 1H18 to A$10.7 million largely through a 34% decrease in discretionary marketing expenses compared to the prior corresponding period as market optimisation continues to deliver great operational results at lower budgets.
Increases in mostly non-cash (share based) employment incentives did offset some of these savings.
As a result of this cost management and the revenue growth delivered, the Ebitda loss for the company decreased by 12% for 1H18 to A$5.7 million (1H17: A$6.5 million).
The Malaysian business is expected to become run-rate Ebitda positive in September, three months ahead of previous forecast.
The company remains on track for its Thailand operations to become run-rate Ebitda breakeven by the end of 2018, with the company forecast to become run-rate Ebitda breakeven by the end of 2019.
Operating performance highlights
The group continued to deliver solid growth in its operating metrics as well as the implementation of key initiatives to ensure improvements in user experience, with a view of driving long-term engagement.
In Malaysia, average monthly audience grew 34% year on year in 1H18 which drove leads growth of 50%.
In May, prices across key classified products increased on average by 16%. Directly after the price increase, paid accounts were down 8% y-o-y.
In addition to this, the new car project is beginning to ramp up with a revised business model based on qualified leads and car transactions.
On Aug 13, iCar Asia launched its trade-in proposition for private sellers’ and fleet owners to auction their cars to dealers across Malaysia. This will allow the company to connect its large network of potential car sellers to the over 3,000 car dealers that work with it in Malaysia.
With successful testing completed in all its markets iCar Asia will be rolling out this business over the coming months in Thailand and Indonesia.
In Thailand, average monthly audience grew strongly year on year at 60% in 1H18, with leads increasing at 16% year on year. In May, prices across key classified products were increased by an average of 39%.
Even with this, the company’s used car business saw a growth of 23% more dealer accounts y-o-y in June 2018.
Indonesia also showed strong audience growth, with average monthly audience growing at 51% y-o-y and leads at 33%. In May, iCar Asia increased prices across key classified products by an average of 82%, with dealer accounts increasing at 3% y-o-y in June 2018.
Strategy to deliver future growth
iCar Asia continues to execute its strategy to setup the business for future growth. With the roll-out of its new car platform in all markets now complete, and auction officially launched in Malaysia and soon to be launched in the remaining markets, 2H will be a period of healthy growth and increased diversification.
This highlights the benefits of the single technology platform, which are being realised through the speed of roll-out of these new businesses and the efficiency of the optimisation of the product.
CEO of iCar Asia Limited Hamish Stone (pic) commented: “iCar Asia continues to show the right progress towards building a large profitable business. With our business in Malaysia moving to run-rate Ebitda profitability three months earlier than originally forecast we have demonstrated that the strategy and progress we are making will deliver the result we committed to.
“This has been achieved despite the impact of one-off events in Malaysia around the Election and change of government. Adding new car and auctions to our existing core business will provide a further boost to growth.
“This will allow us to take further advantage of our market leadership position across the largest automotive markets in the Asean region.”