Sify Prunes Q3 FY12 Losses To Rs 7.3Cr; Revenues Rise 4% YoY

NASDAQ-listed Indian Internet and IT firm Sify Technologies Limited has reported net loss of Rs 7.3 crore for the quarter ended December 31, 2011, the same as previous quarter ended September 30 but lower than Rs 9.6 crore in Q3 FY'11.

Sequentially total revenues was almost flat but compared to Q3 FY'11, it rose 4 per cent to Rs 180.5 crore.

Revenue from enterprise services was at Rs 152.6 crore, up approximately 5 per cent and from software services was Rs 18.2 crore, up approximately 16 per cent over same quarter last year. Revenue from commercial and consumer services was Rs 9.7 crore for the third quarter, marginally up sequentially while down  21.78 per cent over Q3 FY'11.

EBITDA for the quarter increased to Rs 13.6 crore, as compared to Rs 9.3 crore in the same quarter previous year.

The company made capital expenditure of Rs 22.5 crore during the quarter and its cash balance at the end of the quarter was Rs 65.8 crore and undrawn line of credit stood at Rs 33.5 crore.

Raju Vegesna, CMD of Sify said, "Our cable landing station in Mumbai is ready for operations, making Sify the first ICT company in India to own a cable landing station for international submarine cable systems. With the opening of this landing station, Gulf Bridge International (GBI) became the first to land their sub-sea cable system in India.

Sify also signed a Landing Party Agreement (LPA) with MENA Submarine Cable System S.A.E, a licensed telecommunications operator in Egypt. This positions Sify for the growing opportunities for ICT and cloud services across the world.

In early 2011, Sify had announced a strategic investment in Europe India Gateway (EIG) cable capacities to support its expanding global operations across Europe, Middle East and Africa. The EIG cable went live up to Europe last quarter. A $700 million high-capacity fiber-optic cable, EIG will be the first, direct, high-bandwidth optical fiber system from the UK to India.

The State Data Centre for Kerala has also gone live, making it the second on-stream State Data Centre out of a total of five Sify has won to-date. It is looking at consistent recurring revenues from these State Data Centres for the next five years.

"Our strategy to drive Network, IT Services and Software as a complete portfolio of services to Enterprise customers in India and International markets, is allowing us to better capitalise our skills and service offerings," said Vegesna.

In line with its strategy to develop solutions for the large and growing SMB segment, its commercial & consumer business is clocking growth led by Tier II and III cities. In addition to its portfolio of network and Internet services to the SMB market, Sify has introduced value-added IT services such as Sify mystorage, its automatic backup and storage service for SOHO and SMBs.

MP Vijay Kumar, CFO of the firm said, "The company remains focused on optimising cost and cash flow with operating cash flow continuing to be positive. Our investments in EIG and our cable landing station in Mumbai should see cash generation soon."

Business Highlights:

Enterprise business: Network services have picked up additional business from existing clients across industries like BFSI, pharma, manufacturing and PSUs. The International Voice business grew by 11 per cent over same quarter previous year.

Revenue from value added services on the cloud platform grew 95 per cent and hosting has grown by 17 per cent over same quarter last year.

Security services have already notched up impressive wins across industries like auto, direct marketing, insurance and banking.

Commercial & Consumer services: SMB customer base from multiple industries including Manufacturing, Dealers, professionals and retail outlets has grown by over 78 per cent YTD. The quarter saw the release of Sify mystorage, a cloud-based automatic storage and backup solution. Sify sports is now among the top 5 sports sites in the country. Sify Finance has introduced exclusive sections on commodities, silver and currency.

Software services: Revenue of software services in the quarter has grown by approximately 16 per cent over the corresponding quarter of previous year. Contribution of eLearning related services has increased by 10 per cent over the previous quarter.

A total of 24 new clients for application services and 4 new clients for eLearning related services were added last quarter.