(Source: Business Wire)
Patni Computer Systems Limited (Patni) (NYSE: PTI) (BSE: PATNI COMPUT) (NSE: PATNI) today announced its financial results for the second quarter ended 30th June 2009.
Performance Highlights for the quarter ended June 30,2009
Revenues for the quarter at US$ 161.9 million (Rs.7,729.1 million)
Up 3.3% QoQ from US$ 156.7 million (Rs.7,969.1 million)
Down 11.3 % YoY from US$ 182.6 million (Rs.7,837.1 million)
Contribution from top customer remained unchanged as compared to previous quarter and was at 12.3% for the quarter.
Operating Income for the quarter at US$ 24.3 million (Rs.1,158.3 million)
Up 51.9% QoQ from US$ 16.0 million (Rs.812.4 million)
Up 44.5% YoY from US$ 16.8 million (Rs.720.7 million)
Net Income for the quarter at US$ 28.7 million (Rs. 1,368.5 million)
Up 91.7% QoQ from US$15.0 million (Rs. 760.7 million)
Up 18.7% YoY from US$ 24.2 million (Rs.1,037.2 million)
EPS for the quarter at US$ 0.22 per share (US$ 0.45 per ADS).
Future Outlook:
Q3 CY2009 Revenues are expected to be at US$ 163 million to US$ 165 million and Net Income (Excluding the hedging Gain/Loss) is expected to be in the range of US$ 22.5 million to US$ 23.5 million
This guidance is based on constant Rupee-USD rate of Rs.48.5 and constant GBP -- USD rate of 1.55, EURO-USD rate of 1.38.
Mark to Market foreign exchange loss during Q3 2009 is expected to be in the range of US$ 4.0 million based on current estimates. This may change depending on further currency movements during the quarter and will impact our Net Earnings accordingly.
Management Comments
Mr. Jeya Kumar, Chief Executive Officer, said, "We are pleased with overall operating performance which is ahead of our estimates in thischallenging business environment. While growth visibility is shallow in short run, we are working aggressively to realign our overall operations and leverage the changing times to build sustainable competitive advantage in our business. We will continue to invest ahead to create growth beachheads and diversify our business portfolio. We remain bullish on long terms prospects and are investing in extending and deepening the management and overall talent pool of the Company."
Speaking on the occasion, Mr. Surjeet Singh, Chief Financial Officer, said, "Sustained efforts on realignment of cost structures and enhanced focus on operating discipline coupled with positive currency movements helped operating margins during the quarter. We also managed our cash flows well and have a good cash position.Protecting bottom line and simultaneously investing in growth levers in newer segments, markets and service linesis our top priority in addition to acquisitive growth."
Corporate Developments
Appointment of Executive Vice President and Chief of Operations Patni appointed Manish Soman as Executive Vice President and Chief of Operations to its Executive Leadership Team. Manish, formerly a part of Genpact's management team brings over 18 years of experience in the IT Services and BPO Industries.
Patni opened its new EMEA headquarters, based at Heathrow in London. The investment in a new regional headquarters with dedicated operational facilities enables Patni to place an increased focus on helping businesses across Europe and the Middle East to achieve both operational efficiencies and continue to innovate in new products and services.
Patni's Asset Management Practice Introduces Outsourced Operational Fund Accounting Service Patni announced an Operational Fund Accounting Service designed to alleviate the challenges of back office operations that buy-side firms face on a daily basis. As asset management firms continue to look for ways to reduce costs while staying focused on areas of core expertise, Patni has developed a service to manage these critical back-office functions that ensure data consistency, accurate financial reporting, customer data security and privacy; essentially freeing customers to build their businesses.
Patni launches Claims as a Service' (CaaS) for Healthcare Payers Patni recently announced Claims as a ServiceTM' (CaaS), an innovative solution specifically designed for the healthcare payer market. Available for immediate delivery, CaaS is a hosted solution powered by TriZetto's QNXT core administration platform that combines their market leading software technology with Patni's world-class IT and BPO services.
Patni iCAPA Solution for Life Sciences Certified as Powered by SAP NetWeaver Patni announced that its iCAPA Solution 2.0 for Life Sciences has achieved SAP certification as powered by the SAP NetWeaver® technology platform. The solution has been proven to integrate with SAP® solutions, providing customers with access to a Corrective and Preventive Action (CAPA) platform to meet regulatory compliance requirements for Quality Systems and drive new levels of product quality and operational efficiency.
Patni Launches Inventory Liability & Risk Management Dashboard Patni announced the launch of an Inventory Liability and Risk Management Dashboard in collaboration with SAP. The solution, built on top of the SAP® Supply Network Collaboration (SAP SNC) application and leveraging the SAP BusinessObjects Xcelsius® Enterprise software, helps enterprises calculate in near real time the monetary value of the inventory which is at risk at any given point across the supply chain.
Patni launches "Patni Learning Edge" Patni announced the launch of Patni Learning Edge (PLEdge), an industry-academia collaboration focusing on graduate colleges. Patni has signed MoUs with 14 leading graduate educational institutes of Science in Mumbai, and is designed to effectively integrate into the supply chain, bridging the gap that currently exists between formal education and requirements on-ground.
(Figures in Million US$ except EPS and Share Data) A1) CONSOLIDATED STATEMENT OF INCOME For the quarter / period ended Non GAAP 2008 Jun 30 2009 Jun 30 2008 YoY Change Mar 31 2009 QoQ 2008 Extra 2008 (Excluding Particulars (Unaudited) (Unaudited) % (Unaudited) change (Audited) Ordinary Extra Ordinary % Items** Items) Revenue 161.9 182.6 -11.3 % 156.7 3.3 % 718.9 718.9 Cost of revenues 101.6 122.7 -17.2 % 101.1 0.5 % 473.6 (2.8 ) 476.4 Depreciation 4.1 4.5 -9.6 % 3.8 7.6 % 17.7 17.7 Gross Profit 56.2 55.4 1.5 % 51.8 8.6 % 227.6 2.8 224.8 Sales and marketing expenses 12.0 13.8 -13.2 % 13.3 -9.8 % 52.6 52.6 General and administrative expenses 15.9 19.8 -20.1 % 16.1 -1.5 % 78.5 78.5 Provision for doubtful debts and advances (0.0 ) 0.2 -105.0 % (0.1 ) -85.8 % 1.6 1.6 Foreign exchange (gain) / loss, net 4.1 4.7 -12.0 % 6.5 -36.5 % 18.4 18.4 Operating income 24.3 16.8 44.5 % 16.0 51.9 % 76.6 2.8 73.8 Other income / (expense), net 11.2 11.3 -0.9 % 2.5 344.7 % 30.0 7.0 23.0 Income before income taxes 35.5 28.1 26.2 % 18.5 91.9 % 106.6 9.8 96.8 Income taxes 6.8 4.0 72.6 % 3.5 92.7 % 5.2 (8.4 ) 13.6 Net income/(loss) 28.7 24.2 18.7 % 15.0 91.7 % 101.4 18.2 83.2 Earning per share - Basic $ 0.22 $ 0.17 28.8 % $ 0.12 91.7 % $ 0.75 $ 0.61 - Diluted $ 0.22 $ 0.17 28.4 % $ 0.12 91.0 % $ 0.75 $ 0.61 Weighted average number of common shares used in computing earnings per share - Basic 128,105,795 139,061,109 128,105,007 135,590,677 135,590,677 - Diluted 128,704,643 139,295,007 128,238,563 135,760,422 135,760,422 ** Certain prior years' tax review is concluded by IRS and has resulted in net reversal leading to an increase in 2008 Gross Profit, Operating Income and Net Income. 1 -- Due to write back of provision for payroll taxes of earlier years 2 -- Impact of 1 3 -- Due to write back of provision for interest/ penalties of earlier years 4 -- Impact of 2 and 3 5 -- Due to write back of provision for income tax of earlier years 6 -- Impact of 4 and 5 -------------------------------------------------------------------------------
Financial Statements Analysis:
Revenues
Revenues during the quarter were higher by 3.3% sequentially to US$ 161.9 million (Rs.7,729.1 million), from US$ 156.7 million (Rs.7,969.1 million) in the preceding quarter. Revenue growth was driven by volume growth of 2.2% (including higher number of days) and 1.1% due to currency impacts. Number of active clients were 294 at quarter end as compared to 320 in Q1 2009.
Gross Margin
Gross Margins for the quarter were at 34.7% or US$ 56.2 million (Rs.2,684.5 million) against 33.1% or US$ 51.8 million (Rs.2,634.5 million) in the previous quarter reflecting an increase of 8.6%. Higher utilization and other efficiencies net of marginal negative rupee change has impacted the margins favorably.
Depreciation and amortization expenses in cost of revenues were US$ 4.6 million during the quarter against US$ 4.3 million during the previous quarter.
Selling General and Administrative Expenses (SGA Expenses)
Sales and marketing expenses during the quarter were at US$ 12.0 million (Rs.572.7 million) at 7.4% as compared to US$ 13.3 million (Rs.676.7 million) at 8.5% in the previous quarter.
G&A expenses during the quarter were lower at US$ 15.9 million (Rs.756.9 million) or 9.8% as compared to US$ 16.1 million (Rs.818.7 million) at 10.3% during the previous quarter.
Overall Depreciation and amortization expenses in SGA were at US$ 2.1 million for the quarter as against US$ 1.9 million in Q1 2009.
Foreign exchange gain/loss
The revaluation and mark to market foreign exchange loss for the quarter were at US$ 4.1 million (Rs.197.2 million) as compared to foreign exchange loss of US$ 6.5 million (Rs.330.8 million) during the previous quarter.
The quarter end rate for debtor's revaluation was Rs.47.90. Outstanding contracts at the end of Q2 2009 were about US$ 319 million which were contracted in the range of Rs.41.1 to Rs 51.2.
Operating Income
Operating Income including foreign exchange gain / loss during the quarter was at US$ 24.3 million (Rs. 1,158.3 million) or at 15.0% against US $16.0 million (Rs.812.4 million) or 10.2% during the previous quarter, reflecting an increase of 51.9% on QoQ and 44.5% YoY, led by operating and cost efficiencies.
