Tata Communications posts net profit of INR 12.3 Billion

Tata Communications today announces its financial results for the quarter and year ended March 31^st 2017.

Highlights | FY2017

• Free Cash flow after capex, interest and tax was at INR 463 Crore (USD 69 Mn); witnessing a growth of 27% YoY.
• Data business continues to be the growth driver growing steadily at 6.8% YoY. Traditional[1] services grew at 0.8% YoY despite the exclusion of data centre revenue. Growth[2] services witnessed a growth of 18.4% year on year.
• The balance sheet restructuring concluded with the closure of the data centre and Neotel deals.
• On a like for like basis, excluding the data centre revenue and normalising for the access provision and demonetisation impact, Core revenue declined marginally by 1.4% due to the slowing growth of the Voice business, but EBITDA improved by 10.1% YoY and margin improved by 150 Bps.
• Consolidated PAT stood at INR 1,233 Crores (USD 184 Mn). Contribution from an exceptional one-time gain from the stake sale of the data centres (India and Singapore) was INR 2,411 Crores, offset by impairment of INR 637 Crore across various investments.

* Not comparable due to Neotel and Data Centre stake sale.

• During the current quarter, based on the High Court order dated April 28, 2017, the Company has made a provision of INR 872 Crore towards the contractual obligation under the inter se agreement as the difference between the fair market value of the shares to be acquired and the advance paid to Tata Sons for shares of Tata Teleservices.

** Not comparable due to Data Centre stake sale                                  Fx Impact: Revenue – INR 279 Crore; EBITDA – 31 Crore

Highlights | Q4 FY2017

• Quarterly revenue and EBITDA growth were impacted by the exclusion of the India and Singapore data centre revenue, demonetisation impact and one-off expenses due to cable repair, employee related expenses and legal and professional fees.

* Not comparable due to Data Center stake sale.

• On a QoQ basis, the impact on Core EBITDA margins due to the exclusion of the data centre revenue was 60 Bps; one-off expense impact on margins was 260 Bps and the gain due to access facilitation charges (AFA) was 120 BPs. Adjusted for above, the EBITDA margins would have expanded by 140 Bps in Q4.

Commenting on the results, Vinod Kumar, MD and CEO, Tata Communications, said, “Market demand for our services remain strong and we continue to increase our wallet share with large global enterprises.  The conclusion of the Data Center and Neotel deals makes us stronger, more agile.  This will help drive focus and momentum into our evolution from a traditional telco to a next generation digital enablement provider.”

Commenting on the results, Pratibha K. Advani, CFO, Tata Communications, said, “We continue to witness strong growth momentum in our data services portfolio. This has helped us in maintaining our operating margins and improving our free cash flows.”

Corporate highlights | Q4 FY2017

• Liquid Telecom completes acquisition of Neotel
• ST Telemedia and Tata Communications complete the Singapore data centre joint venture transaction

Business highlights | Q4 FY2017

• BSNL Delivers Seamless Access to 44 Million Wi-Fi Hotspots Globally in Partnership with Tata Communications: Bharat Sanchar Nigam Limited has partnered with Tata Communications, to deliver a high-quality mobile experience and accelerate how its subscribers use Wi-Fi internationally. In an industry first, BSNL has deployed Tata Communications’ Wi-Fi+, Wi-Fi® cloud communication solution, giving its subscribers seamless access to 44 million Wi-Fi hotspots in more than 100 countries including international flights and rail systems.
• Tata Communications selected as exclusive video distribution partner for MotoGP™ and WorldSBK: Tata Communications, has been selected by Dorna Sports as the exclusive video distribution partner for the FIM MotoGP™ World Championship and Superbike World Championship (WorldSBK). Tata Communications will distribute the motorcycle road racing action from five continents to over 80 media partners, reaching over 200 million households, using its global superfast fibre and satellite network. This partnership will enable Dorna to capitalise on the opportunities that the latest digital technology advancements bring, as people’s evolving content consumption habits continue to shape the sports industry.
• Tata Communications unveils plans to enable everyone and everything in the world to become seamlessly connected: Tata Communications, entered the global USD 4 billion mobile data connectivity and cross-border Internet of Things (IoT) market. The company is unveiling the Tata Communications MOVE platform that will enable people and things to become seamlessly connected on a global scale. It is a platform that enables companies to embed global connectivity in anything, improving the user experience, creating completely new revenue streams, and fulfilling the promise of a truly digital world.
• Tata Communications positioned as a Leader in the Gartner Magic Quadrant for Network Services, Global for the fourth consecutive year: Tata Communications has been positioned by Gartner as a Leader in its 2017 Magic Quadrant for Network Services. Designed by Gartner to examine how effectively providers meet the current needs of business in terms of both ‘completeness of vision’ and ‘ability to execute’, 2017 marks the fourth year in a row that Tata Communications has been positioned in the Leaders quadrant.
• Tata Communications’ internal incubator debuts NetFoundry – reinventing networking for the hyper connected era: Tata Communications successfully incubated another business idea through its flagship innovation programme ‘Shape the Future’ and debuted NetFoundry, a business that reinvents networking for the hyper connected era at Mobile World Congress this year. The NetFoundry platform enables enterprises to obtain the security and performance of a private network, while benefiting from the economics and agility of the Internet – enabling enterprises to securely and reliably extend applications from edge to core to public and private clouds, using Internet access.
• HPE to work with Tata Communications to build world’s largest IoT network in India to enhance resource utilisation: Hewlett Packard Enterprise announced it is working with Tata Communications, a leading provider of A New World of Communications™, to support the roll-out of India’s first LoRaWAN™ based network.
• Nilesat and Tata Communications collaborate to ensure robust media delivery and optimised end user viewing experience across MENA region: Tata Communications announced a partnership with Nilesat, the MENA region’s leading satellite and teleport services provider. The partnership allows both parties to leverage infrastructure to ensure optimal regional media delivery over IP and enhance regional connectivity with broadcasters across the globe to serve MENA broadcaster needs and afford end users an unparalleled viewing experience.

An Investor fact sheet providing a detailed analysis of the results for the quarter ended March 31st 2017 has been uploaded on the Tata Communications website and can be accessed at:

http://www.tatacommunications.com/sites/default/files/FIN-investorfactsheet-PDF-20170504.pdf

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