Xurpas Stems Freefall in 1H 2020 But Total Losses Swell to P3.5 Billion Since 2018
Listed tech company Xurpas reported a net loss of P48.57 million for the first half of 2020, taming the P115.38 million deficit it suffered during the same period in 2019.
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Xurpas also posted its 2019 annual report on Monday, August 17, and said its total net loss for the year reached P2.64 billion, up 225 percent from the P811. 64 million loss it reported in 2018.
That brings up its total net loss to nearly P3.5 billion over the last two and a half years.
In the first six months of 2020, the company’s total revenues reached only P66.67 million, a 90-percent decrease versus 2019’s P640.15 million.
According to Xurpas officials, the “decrease was brought about by the exclusion of revenues generated from Yondu, as it was sold back to Globe on September 2019.”
Yondu is a content developer and provider of mobile value-added and IT services. Xurpas acquired 51 percent of the company from Globe Telecom in 2015 for P500 million. Xurpas then sold the shares back to the Ayala-owned firm for P501 million “to retire existing debt obligations” and for working capital.
Xurpas also blamed the coronavirus pandemic for the slowdown in its business, particularly to its enterprise segment, whose revenues decreased by 51 percent during the second quarter of 2020. The company said “a number of potential clients delayed or altogether canceled their projects.
“Other services represented by Storm (with revenues decreasing by 74 percent), also reported that their major clients’ operations were gravely affected, thereby reducing the use of the Storm’s platform/services by their employees.”
A subsidiary of Xurpas, Storm is a human resource consultancy firm with a platform that allows employees to convert their employee benefits to other benefits such as gadgets, travel, dining, and other merchandise or service.
Co-founded by Nix Nolledo, Raymond Racaza, and Fernando Jude Garcia in 2001, Xurpas Inc was publicly listed in the PSE in 2014 with an estimated market capitalization of P6.8 billion. Its IPO price was listed at P3.97 per share in December 2014. The company peaked in 2016, when the stock was priced at P19.80 per share and its market cap reached a high of P27 billion in March that year. Today however, the stock is trading at around 58 cents.
Xurpas went on an acquisition spree in 2015. Apart from Yondu, the company acquired Singapore-based Altitude Games, which eventually led to the development of Xurpas's subsidiary Xeleb Technologies Inc; Hong Kong-based Human Resources (HR) technology firm Micro Benefits Ltd.; HR solutions provider Storm Flex Systems, and Zodow (fromerly Quick.ly), a Pasadena, California-based company that, at the time, was developing a mobile search platform, among others.
Xeleb was dissolved in 2019. Other acquisitions, like Seer Technologies (70 percent ownership), and MatchMe (29.1 percent), and Art of Click (100 percent) apparently did not perform as well as the company might have hoped.
“Though there are delays and cancellations in some projects under the enterprise segment, the Group remains positive and likewise sees a business opportunity amidst the pandemic,” Xurpas said in its report. “The Company intends to seize the opportunity to support various companies that want to jumpstart their digital transformation. Xurpas will continue to create and provide custom tools and solutions for these transformations using its technology capabilities and experience.
“The Group is also exploring potential projects both from the private and public sectors to expand clientele base. Storm continues to look for other revenue sources, in partnership with other HR technology firms, for on-selling to its client employee base,” it added.