Facebook India's net ad revenue almost doubles to Rs 520.4 cr in FY20

 Facebook India Online Services, the India arm of social media giant Facebook, has more than doubled its net profit to Rs 136 crore for the fiscal ended 31st March 2020 compared to Rs 65.31 crore in the previous fiscal, according to regulatory filings accessed by Tofler. The company's EBITDA stood at Rs 417.86 crore in FY20.

Facebook, which owns platforms like Facebook, Messenger, Instagram and WhatsApp, has seen a 43% increase in revenue at Rs 1,277 crore compared to Rs 893 crore in FY19.

Net advertising revenue almost doubled to Rs 520.4 crore from Rs 263.9 crore. Revenue from IT enabled business process outsourcing service to group companies stood at Rs 695.1 crore as against Rs 628.5 crore.

The gross amount billed by Facebook to advertisers in FY20 is Rs 6612.6 crore compared to Rs 2253.7 crore. Cost of advertising inventory jumped to Rs 6067.9 crore from Rs 1969.9 crore.

The company acts as a reseller of advertising services to Indian customers and provides sales support and marketing services to the Facebook group.

It reports revenues from advertising sales net of associated direct cost of sales. The revenues consist primarily of advertising revenues generated by displaying ad products on Facebook, Instagram, Messenger, and third-party affiliated websites or mobile applications.

Total expenses jumped 34% to Rs 1045.67 crore from 779.75 crore. Facebook’s employee benefits expense grew 63.3% to Rs 299.3 crore in FY20 from Rs 183.2 crore. It paid an equalisation levy of Rs 369.5 crore as against a payment of Rs 118.2 crore in the previous fiscal.

The Indian government charges 6% equalisation tax on business to business transactions in digital advertising space.

On the impact of Covid-19, the company said that it expects to recover the carrying amount of all its assets as at March 31, 2020 and no adjustments are required as at March 31, 2020 in relation to COVID-19, considering various internal and external information up to the date of approval of these financial statements.

"The future impact of the current economic situation is uncertain and difficult to predict. The company will continue to closely monitor any material changes to future economic conditions," Facebook said in the filing.

Last month, tech giant Google India had reported 34.8% increase in FY20 revenue at Rs 5,593.8 crore compared to Rs 4,147 crore in FY19. The net profit had jumped by 23.9% at Rs 586.2 crore in FY20 as compared to Rs 472.8 crore in the preceding fiscal. Expenses rose 30.4% to Rs 4,455.5 crore in FY20 from Rs 3,416.5 crore in 2018-19.

Advertising revenue contributed about 27% of the company's turnover, while the share of IT-enabled services stood at 32% and that of IT services was at 41%. Google India had paid an equalisation levy of Rs 611.1 crore in FY20.

 Google India is engaged in the rendering of IT and IT-enabled services to its group companies engaged in the internet industry. The company is also a third-party reseller of advertising space of Google Adwords programme and other Google advertising products and services in India to advertisers seeking to market their products and services to consumers and business users over the internet.