Digitalisation drives a strong Q3 performance | Tata Communications’ 9M data revenues; up 9.7% YoY

Tata Communications today announced its financial results for the nine months and quarter ended on December 31st 2016.

Highlights | Q3 FY2017

• Data revenues were buoyed by both traditional^[1] and growth services^[2] as global demand for data continues to gain momentum significantly

 

Consolidated Nos.	INR Crore	QoQ Growth	YoY Growth	USD Mn	QoQ Growth	YoY Growth
Gross Revenue	4,872	(4.3%)	(4.5%)	723.2	(4.9%)	(6.5%)
EBITDA	722	(16.8%)	(3.7%)	107.1	(17.4%)	(5.8%)
PAT	1,413	3436%	1,176%	210.6	3430.7%	1147.7%

 

• Consolidated PAT stood at INR 1,413 Crores. Contribution from an exceptional one-time gain from the stake sale of the India Data Centre (INR 2,138 Crores) was offset by the impairment (INR 250 crores) on account of the South African subsidiary – Neotel
• Quarterly revenue and EBITDA growth were impacted by the exclusion of the India data centre revenue with effect from October 19, 2016 and also a couple of regulatory changes that led to modifications in access facilitation agreements and the demonetisation drive which affected the payment solutions business

 

Core Nos.	INR Crore	QoQ Growth	YoY Growth	USD Mn	QoQ Growth	YoY Growth
Gross Revenue	4,419	(5.8%)	(5.6%)	655.9	(6.3%)	(7.6%)
EBITDA	592	(24.0%)	(10.6%)	87.7	(24.6%)	(12.6%)
EBITDA margin	13.4%	(322bps)	(75bps)	13.4%	(324bps)	(77bps)
PAT	1,359	4,704%	1,1154%	202.6	4,705%	1,118%

 

• Core business (consolidated excluding Neotel) growth was impacted by a decline in global voice demand (which continues to be a challenge for operations) and the adjustments made on account of the exclusion of the data centre revenues and one off adjustments
• On a like to like basis the normalised EBITDA margin stood at 16.8% for Q3 and normalised EBITDA growth at 17.5% YoY

 

Highlights | 9 Months FY2017

• Consolidated EBITDA improved by 7.3% while consolidated revenue declined marginally by 2.7% YoY at INR 14,995

Consolidated Nos.	INR Crore	YoY Growth	USD Mn	YoY Growth
Gross Revenue	14,995	(2.7%)	2,235.9	(6.0%)
EBITDA	2,453	7.3%	365.8	3.6%
PAT	1,495	461.3%	222.8	441.8%

 

Core Nos.	INR Crore	YoY Growth	USD Mn	YoY Growth
Gross Revenue	13,739	(1.0%)	2,048.6	(4.4%)
EBITDA	2,157	9.9%	321.6	6.1%
EBITDA margin	15.7%	155bps	15.7%	155bps
PAT	1,478	694.0%	220.3	666.5%

​

• 9M PAT for core business (consolidated excluding Neotel) was up 694% YoY
• 9M FY17 core revenue growth was 0.6% and core EBITDA growth was 19.4% YoY on a normalised basis

 

Commenting on the results, Vinod Kumar, MD and CEO, Tata Communications said, “These results illustrate our strategic intent, in both financial and operational terms. We continue to face challenges in the voice sector but our investment in digital competencies holds us in good stead for the future. Our recent investment in Teleena Holding B.V. reflects our strategic vision to build further capabilities in mobility and IoT, creating an access and usage agnostic, cross-border mobile experience for humans and machines alike.”

“These are exciting times with digitalisation creating new avenues for value and impact across the ecosystem. We continue to focus on building an agile enterprise, prioritising operational efficiency to continue to deliver first class solutions to our customers and partners worldwide.”

Pratibha K. Advani, CFO, Tata Communications said, “The operational performance of the business continues to be robust as the growth trajectory in the data business continues to be positive. The process of de-leveraging has begun and the business is generating healthy free cash flow.”

 

Corporate highlights | Q3 FY2017

• ST Telemedia and Tata Communications complete the India data centre joint venture transaction
• Neotel has received unconditional approval from ICASA for acquisition of Neotel by Liquid Telecom

 

Business highlights | Q3 FY2017

• Hitachi Sunway and Tata Communications Strengthen Presence in ASEAN – With this partnership, Hitachi Sunway will now be able to provide its more than 1000 enterprise customers in ASEAN access to Tata Communications’ robust portfolio of Managed Network Services, Managed Security Services and Unified Communications & Collaboration (UCC) offerings.
• Semtech and Tata Communications to inaugurate ‘Applications Center for LoRa Technology’ in India – Both partners are set to launch the first applications centre dedicated to LoRa® Technology in Mumbai, India. The centre allows enterprise customers and Internet of Things (IoT) solution providers to deploy and test their applications over a LoRaWAN™-based low power, wide area network (LPWAN). Following successful LoRaWAN network trials in Mumbai, Delhi and Bengaluru, Tata Communications and Semtech have worked together to deploy 35 IoT proofs-of-concept (PoCs) based on LoRa Technology across these cities. The PoCs cover a wide array of applications, including sensors for remotely monitoring air conditioners and safety deposit boxes, energy management systems used to optimize the use of electricity, gas and water, and multiple smart buildings and smart city applications.
• Tata Communications launches a new brand campaign in India – The major multi-channel brand campaign in India has been designed to highlight the company’s diverse services portfolio that enables digital transformation for businesses and its contribution to the ‘Make in India’ narrative, the campaign will roll out in December 2016 through to the end of June 2017. The campaign will look to celebrate the company’s customers and partners in India. Unfolding across India’s busiest airports of Mumbai, Delhi, Bangalore and Pune, and reaching over 100 million travellers, this campaign also includes the sponsorship of major industry and technology events in India as well as an extensive online advertising campaign with leading business publications, generating over 100 million impressions on all its digital channels.
• Tata Communications launches IZO™ SDWAN to enable organisations to unleash their global growth potential – As the myriad of different applications, clouds, data sources and connections create complexity for organisations, IZO™ SDWAN helps them detangle this complexity and propel their growth through seamless, secure and easy-to-manage connectivity across 130 countries spanning both developed and emerging markets.
• Emirates Data Clearing House and Tata Communications partner to simplify global borderless mobility – The bilateral partnership is aimed at mutual business cooperation in their data and financial clearing forte offerings to mobile network operators across the globe. The partnership will enable Tata Communications to provide a more robust portfolio of solutions as an integrated mobility service provider with its existing range of innovative solutions. EDCH will in turn expand their geographical avenues significantly towards global markets with an enhanced roaming and mobility management portfolio.

 

An Investor fact sheet providing a detailed analysis of the results for the half year and quarter ended December 31st 2016 has been uploaded on the Tata Communications website and can be accessed at: https://www.tatacommunications.com/sites/default/files/FIN-investorfact-sheet-PDF-20170123.pdf