Consolidated PAT at INR 42 Cr | Data services continue to deliver strong growth with 460 basis points improvement in year-on-year margins
August 1, 2016
Tata Communications today announces its financial results for the quarter ended June 30th 2016 (Q1 FY17).
Highlights | Q1 FY2017
In line with our strategy, revenue and EBITDA have shown a healthy trend over the last few quarters. We are seeing a clear shift in our business mix with revenue from Data services contributing 56% to gross revenue and 78% to EBITDA.
Productivity initiatives coupled with stability in volumes are leading to an improvement in Voice EBITDA, with a quarter-on-quarter improvement of 70 bps in margins.
We continue to generate healthy free cash flow. The free cash flows (EBITDA minus Capex) from the Core business for Q1 FY17 came at INR 346 crores (USD 52 Mn) and represent a growth of 31% on a YoY basis.
Commenting on these Q1 FY17 results, Vinod Kumar, MD and CEO, Tata Communications, said:
“We see ourselves as enablers in a world where businesses are accelerating their digital transformation and creating a platform economy. It is our intent to provide tailored solutions such as connectivity, cloud and mobility to enterprises in a secure and reliable manner. The layer of value-added services that sits above our world-leading infrastructure is driving the transformation of our business.”
“We have also seen a healthy accretion in both Global Enterprise and NextGen customers. This is important as these are the cornerstones for our future growth. As we evolve with macro-trends like IoT, Big Data and Artificial Intelligence (AI), the business is geared to deliver a steady enhancement in performance going forward. And as seen in this quarter, we are seeing a consistent directional improvement in Global Data services.”
Commenting on these results, Pratibha K Advani, CFO, Tata Communications, said:
“We are making positive strides in improving the quality of our earnings and showing consistent growth. Both the divestiture of Neotel and the strategic joint venture partnership announcement of our India and Singapore Data Centres give us headroom to operate more effectively in a highly-competitive environment.”
“We are committed to driving efficiency of capital utilisation and this is reflected in the improvement in our Return on Capital Employed for our Core business from 8.6 % in FY16 to 10.1 % at the end of Q1 FY17.”
Business highlights | Q1 FY17
Corporate highlights | Q1 FY17
A fact sheet and results presentation providing a detailed analysis of the results for the quarter ended June 30th 2016 have been uploaded on the Tata Communications website and can be accessed at:
About Tata Communications
Tata Communications Limited (CIN no: L64200MH1986PLC039266) along with its subsidiaries (Tata Communications) is a leading global provider of A New World of Communications™. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers.
The Tata Communications global network includes one of the most advanced and largest submarine cable networks and a Tier-1 IP network with connectivity to over 240 countries and territories across 400 PoPs, as well as nearly 1 million square feet of data centre and collocation space worldwide.
Tata Communications’ depth and breadth of reach in emerging markets includes leadership in Indian enterprise data services and leadership in global international voice. Tata Communications Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India.
Forward-looking and cautionary statements
Certain words and statements in this release concerning Tata Communications and its prospects, and other statements, including those relating to Tata Communications’ expected financial position, business strategy, the future development of Tata Communications’ operations, and the general economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, including financial, regulatory and environmental, as well as those relating to industry growth and trend projections, which may cause actual results, performance or achievements of Tata Communications, or industry results, to differ materially from those expressed or implied by such forward-looking statements. The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements include, among others, failure to increase the volume of traffic on Tata Communications’ network; failure to develop new products and services that meet customer demands and generate acceptable margins; failure to successfully complete commercial testing of new technology and information systems to support new products and services, including voice transmission services; failure to stabilize or reduce the rate of price compression on certain of the company’s communications services; failure to integrate strategic acquisitions and changes in government policies or regulations of India and, in particular, changes relating to the administration of Tata Communications’ industry; and, in general, the economic, business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ materially from such forward-looking statements, many of which are not in Tata Communications’ control, include, but are not limited to, those risk factors discussed in Tata Communications Limited’s Annual Reports. The Annual Reports of Tata Communications Limited are available at www.tatacommunications.com. Tata Communications is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements.
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