Zomato, a leading food delivery service, has commenced the liquidation process for its Vietnam-based subsidiary, as revealed in a regulatory disclosure on Thursday. The decision to liquidate the step-down subsidiary comes with the acknowledgment that the entity doesn’t engage in active business operations, ensuring that the liquidation wouldn’t significantly affect the company’s overall functionalities.
Highlighting the subsidiary’s non-material status, the regulatory filing emphasized that the dissolution of Zomato Vietnam Company Limited (ZVCL) would have no substantial impact on the company’s turnover or revenue. ZVCL’s liquidation aligns with Zomato’s strategic exits from various international markets aimed at reducing operational costs. In 2023, the company closed its subsidiaries in Portugal, Chile, Czech, Indonesia, Jordan, and the Philippines.
Zomato’s recent financial performance showcased a positive trend, marking its second consecutive quarter of consolidated profits. The firm reported a profit of Rs 36 crore in the second quarter of the financial year 2023-24, a notable increase from Rs 2 crore in the previous quarter. Revenue from operations also demonstrated robust growth, soaring 71% year-on-year to Rs 2,848 crore in Q2 FY24, compared to Rs 1,661 crore a year ago and Rs 2,416 crore in the preceding quarter.
However, the company witnessed a rise in total expenses, reaching Rs 3,039 crore in the quarter ending September. This increase in expenses, up from Rs 2,612 crore in the previous quarter and Rs 2,092 crore a year ago, suggests heightened spending despite revenue growth. Zomato’s strategic shift in its international presence through subsidiary closures aims to streamline operations and potentially mitigate operational expenditures despite its revenue uptick.
