(Source: Business Wire)
Patni Computer Systems Limited (Patni) today announced its
financial results for the third quarter ended 30th September
2009.
*Important Note: In Q3 2009, based on prior years tax
reviews by IRS, which were concluded during the quarter, certain
provisions have been reversed resulting in one time increase in gross
profit of US$ 1.2 million, other income of US$ 2.1 million and decrease
in tax expense of US$ 8.1 million. Consequently, profit after tax has
increased by US$ 11.4 million for the quarter. Similarly in our Q3 2008
release, prior year's tax reviews by IRS, had resulted in reversal of
certain provisions which led to a one time increase in gross profit of
US$ 2.8 million, other income of US$ 8.3 million and decrease in tax
expense of US$ 7.7 million. Consequently, profit after tax had increased
by US$ 18.7 million for Q3 2008. Variations in Patni's Q3 2008 & Q3 2009
financial performance as a result of such write backs have been referred
to as "Extra Ordinary Items" in this press release. Financial
Performance excluding these Extra ordinary items has been considered for
comparative performance review in this release.
Performance Highlights for the quarter
ended September 30,2009
Revenues for the quarter at US$ 167.2 million (Rs.8,040.2 million)
Up 3.3% QoQ from US$ 161.9 million (Rs.7,729.1 million)
Down 8.9 % YoY from US$ 183.5 million (Rs. 8,522.5 million)
Revenue concentration from top client lower at 11.9% against 12.3%,
Top 5 up at 38.3% from 37.2%, $ 1m relationships up at 92 , 7 new
clients added during the quarter.
Operating Income for the quarter at US$ 27.1 million (Rs.1,303.1
million)
Up 11.7% QoQ from US$ 24.3 million (Rs.1,158.3 million)
Down 2.0% YoY from US$ 27.6 million (Rs.1,283.9 million)
Operating Income adjusted for Extra Ordinary items is at US$25.9
million for the quarter, + 6.9% QoQ and +4.3% YoY .
Net Income for the quarter at US$ 35.7 million (Rs. 1,715.7 million)
Up 24.5% QoQ from US$ 28.7 million (Rs. 1,368.5 million)
Down 17.2% YoY from US$ 43.1 million (Rs.2,001.9 million)
Net income adjusted for Extra Ordinary items is at US$ 24.3 million
for the quarter, (-)15.2% QoQ and (-)0.4% YoY
EPS for the quarter at US$ 0.28 per share (US$ 0.56 per ADS).
EPS adjusted for Extra Ordinary items is at US$ 0.19 per share (US$
0.38 per ADS)
Future Outlook:
Q4 CY2009 Revenues are expected to be at US$ 168 million to US$169
million and Net Income (Excluding the hedging Gain/Loss) is expected
to be in the range of US$ 24 million to US$ 25 million
This guidance is based on constant Rupee -USD rate of Rs.46.5 and
constant GBP -- USD rate of 1.65, EURO-USD rate of 1.40.
Mark to Market foreign exchange gain during Q4 2009 is expected to
be in the range of US$ 1 to $ 1.5 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, " Our Overall
performance from the quarter has been ahead of our expectations on all
counts .We are very pleased with these results and hard work of our
employees in these difficult times. While the global macro economic
environment is still thwart with risks and challenges, the fading of
solvency risks is positive with stable market place. Deflationary
pressure on overall global IT services market is likely to continue for
foreseeable future, however the off shoring and global delivery
services market share will increase over time. We find ourselves in a
good position competitively with our micro vertical focused strategy
even as sustained visibility to growth is at least 2-3 quarters away."
Speaking on the occasion, Mr. Surjeet Singh, Chief Financial
Officer, said, "Volumes were up during the quarter and
pricing was stable. All customer categories grew on volumes and marginal
forex change. Cost realignment gains continued during the quarter as our
operating earnings remained ahead of our expectations. With continued
investments in geographic expansion, we are confident of capturing
faster incremental growth along with inorganic additions besides gains
on resultant absorption benefits in our cost base over the next 12- 18
months."
Corporate Developments
Appointments
Key leadership Appointments
Mr. Vijay Mehra has been appointed as Executive Vice President
and Head of Business Verticals. Vijay was until recently, Global CIO at
Essar Group of Companies and comes with over 20 years of global
management and consulting experience. Vijay will define and boost
Patni's micro-verticals strategy, structure, systems and skills.
Mr. Naresh K. Lakhanpal,has been appointed as President, Patni
Americas Inc. Naresh has over 23 years of diverse business experience
including operations, sales, engineering, product development and
strategy.
Mr. V Mathivanan , has been appointed President, APAC and will
lead this business from Singapore, where Patni has recently established
its new regional headquarters. Mathi comes with over 30 years of
experience specializing in IT with companies such as Singapore Network
Services (SNS) and CrimsonLogic.
Innovation
Patni Computer Systems Unveils Cloud
Services Strategy
Patni's first in a series of consulting and software services
initiatives designed to help customers accelerate deployment to a cloud
environment. The first offering, Patni's Cloud Acceleration Program
(CAP), gives independent service providers and application developers a
structured, business-driven approach based on Patni's proven process and
methodologies that take the guesswork out of transitioning to
cloud-based solutions.
Awards & Recognition
Patni Ranked #7 Preferred Employer
in DQ-IDC's Best Employer Survey 2009
Patni has been conferred the #7 Preferred Employer rank in DQ-IDC's Best
Employer Survey 2009 based on an industry-wide employee satisfaction
survey. The company was also ranked #16 Best IT Employer after a
comprehensive analysis of HR policies across the industry. This rank is
significant as it indicates a jump of 13 places from last year for Patni.
Patni Named "Challenger" in Magic
Quadrant for Help Desk Outsourcing, North America
Patni has been positioned by leading industry analyst firm Gartner,
Inc., in the "Challengers" quadrant of its "Magic Quadrant for Help Desk
Outsourcing, North America" 2009 report by Richard Matlus and William
Maurer. The report is designed to help corporations identify and
evaluate outsourcing external service providers (ESPs) for help desk
services.
Client Initiatives
Patni helps "Get Connected" deliver
innovative online directory of help and support services for young
people in crisis
Patni has collaborated with leading UK charity "Get Connected" to build
a new online directory service, ˜Webhelp 24/7', that will help young
people find solutions to a wide range of issues, from coping with mental
illness to learning disabilities. "Get Connected" has also been chosen
as Patni's Charity of The Year for the EMEA region.
(Figures in Million US$ except EPS and Share Data)
A1) CONSOLIDATED STATEMENT OF INCOME
For the quarter / period ended
Particulars Sep 30 2009 (Unaudited) Extra Ordinary Items** NON GAAP Sept 2009 (Excluding Extra Ordinary Items) Sep 30 2008 (Unaudited) Extra Ordinary Items** NON GAAP Sept 2008 (Excluding Extra Ordinary Items) YoY change % Jun 30 2009 (Unaudited) QoQ change % Non GAAP YoY change % Non GAAP QoQ change % 2008 (Audited) Extra Ordinary Items** NON GAAP 2008 (Excluding Extra Ordinary Items)
Revenue 167.2 167.2 183.5 183.5 -8.9 % 161.9 3.3 % -8.9 % 3.3 % 718.9 718.9
Cost of revenues 101.1 (1.2 ) 102.3 117.6 (2.8 ) 120.4 -14.0 % 101.6 -0.5 % -15.0 % 0.7 % 473.6 (2.8 ) 476.4
Depreciation 4.0 4.0 4.3 4.3 -7.8 % 4.1 -1.1 % -7.8 % -1.1 % 17.7 17.7
Gross Profit 62.0 1.2 60.9 61.5 2.8 58.7 0.9 % 56.2 10.3 % 3.7 % 8.3 % 227.6 2.8 224.8
Sales and marketing expenses 14.2 14.2 13.2 13.2 7.4 % 12.0 18.0 % 7.4 % 18.0 % 52.6 52.6
General and administrative expenses 18.0 18.0 21.2 21.2 -15.2 % 15.9 13.5 % -15.2 % 13.5 % 78.5 78.5
Provision for doubtful debts and advances 0.5 0.5 0.6 0.6 -17.7 % (0.0 ) -4630.7 % -17.7 % -4630.7 % 1.6 1.6
Foreign exchange (gain) / loss, net 2.3 2.3 (1.2 ) (1.2 ) -292.5 % 4.1 -45.3 % -292.5 % -45.3 % 18.4 18.4
Operating income 27.1 1.2 25.9 27.6 2.8 24.9 -2.0 % 24.3 11.7 % 4.3 % 6.9 % 76.6 2.8 73.8
Other income / (expense), net 5.9 2.1 3.8 11.4 8.3 3.1 -48.1 % 11.2 -47.5 % 23.7 % -65.9 % 30.0 7.0 23.0
Income before income taxes 33.0 3.2 29.8 39.0 11.0 28.0 -15.4 % 35.5 -7.0 % 6.4 % -16.1 % 106.6 9.8 96.8
Income taxes (2.7 ) (8.1 ) 5.5 (4.1 ) (7.7 ) 3.6 -34.4 % 6.8 -139.4 % 53.2 % -20.0 % 5.2 (8.4 ) 13.6
Net income/(loss) 35.7 11.4 24.3 43.1 18.7 24.4 -17.2 % 28.7 24.5 % -0.4 % -15.2 % 101.4 18.2 83.2
Earning per share
- Basic $ 0.28 $ 0.19 $ 0.32 $ 0.18 -12.2 % $ 0.22 24.4 % 5.6 % -15.2 % $ 0.75 $ 0.61
- Diluted $ 0.27 $ 0.19 $ 0.32 $ 0.18 -14.3 % $ 0.22 22.0 % 3.1 % -16.9 % $ 0.75 $ 0.61
Weighted average number of common shares used in computing earnings per share
- Basic 128,163,437 128,163,437 135,925,454 135,925,454 128,105,795 135,590,677 135,590,677
- Diluted 131,290,834 131,290,834 135,925,454 135,925,454 128,704,643 135,760,422 135,760,422
** Certain prior years' tax review is concluded by IRS and has resulted in net reversal leading to an increase in 2008 & Q3 2009 Gross Profit, Operating Income and Net Income.