Wipro Records 13% Growth in Net Income
BANGALORE, India and EAST BRUNSWICK, New Jersey, July 22 --
- Results for the Quarter Ended June 30, 2009 Under IFRS
Wipro Limited (NYSE: WIT) today announced financial results under IFRS
for its first fiscal quarter ended June 30, 2009.
Highlights of the Results:
IT Services Revenue in dollar terms was $1,033 million, a sequential
decline of 1.3% and YoY decline of 3.3%.
IT Services Revenue on constant currency was $1,014 million, a sequential
decline of 3.0%. On a constant currency basis, YoY growth was 2.1%.
Total Revenues were Rs. 62.46 billion ($1.31 billion(1)), representing an
increase of 5% over the same period last year.
Net Income was Rs. 10.10 billion ($212 million(1)), representing an
increase of 13% over the same period last year.
Non-GAAP Adjusted Net Income (excluding impact of accelerated
amortization of stock based compensation) was Rs. 10.08 billion ($211
million(1)), representing an increase of 11% over the same period last year.
IT Services Revenues were Rs. 48.27 billion ($1,011 million(1)),
representing an increase of 10% over the same period last year.
IT Services Earnings Before Interest and Tax (EBIT) was Rs. 10.70 billion
($224 million(1)), representing an increase of 17% over the same period last
year.
IT Services added 26 new clients in the quarter.
IT Products Revenues was flat over the same period last year and EBIT
grew by 13%.
Consumer Care and Lighting Revenue grew 9% over the same period last year
and EBIT grew 27%.
Performance for the Quarter ended June 30, 2009 and Outlook for our
Quarter ending September 30, 2009
Azim Premji Chairman of Wipro, commenting on the results said -
"We are starting to see the first signs of stability in the business as
ramp downs start to taper off and volumes start to stabilize. We are adapting
ourselves for the new reality with continued investments in Value Creation,
Go-To-Market and driving significant Operational Productivity. Looking ahead,
for the quarter ending September 30, 2009, we expect Revenues from our IT
Services business to be in the range of $1,035 million to $1,053 million*"
Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro,
said -
"It was another quarter of strong performance. We improved on several
operating parameters to deliver margin expansion of 0.5% to 22.2% in the IT
Services segment."
* Guidance is based on constant currency exchange rates, GBP/USD at 1.57,
Euro/USD at 1.35, USD/INR at 48.23
Wipro Limited
Total Revenue for our quarter ended June 30, 2009 was Rs. 62.46 billion
($1.31 billion(1)), representing an increase of 5% over the same period last
year. Net Income for our quarter ended June 30, 2009 on IFRS basis was
Rs.10.10 billion ($212 million(1)), representing an increase of 13% over the
same period last year. Net Income for our quarter ended June 30, 2009 on an
Adjusted Non-GAAP basis (excluding impact of accelerated amortization of
stock based compensation) was Rs. 10.08 billion ($211 million(1)),
representing an increase of 11% over the same period last year. Earnings per
Share for our quarter ended June 30, 2009 were Rs. 6.94 ($0.15(1)),
representing an increase of 13% over the same period last year. Non-GAAP
Adjusted Earnings (excluding impact of accelerated amortization of stock
based compensation) per Share for our quarter ended June 30, 2009 were Rs.
6.92($0.14(1)), representing an increase of 10% over the same period last
year.
Reconciliation between GAAP net income and non-GAAP adjusted net income
(excluding impact of accelerated stock based compensation) is provided in the
table on page 8.
IT Services (77% of Total Revenue and 94% of Operating Income for our
quarter ended June 30, 2009)
Our IT Services business segment recorded Revenue of Rs. 48.27 billion(2)
($1011 million(1)) for our quarter ended June 30, 2009, representing an
increase of 10% over the same period last year. EBIT for this segment was Rs.
10.70 billion ($224 million(1)) for our quarter ended June 30, 2009,
representing an increase of 17% over the same period last year.
Our Operating Income to Revenue for this segment was 22.2% for our
quarter ended June 30, 2009.
We had 98,521 employees as of June 30, 2009.
Wipro has built a healthy pipeline across industry Verticals,
strengthening our presence across Geographies by winning strategic deals and
launching new Solutions.
In the Telecom space, Wipro won a 9-year IT outsourcing contract from
Unitech Wireless. Unitech Wireless has structured its organization and
operational architecture around innovation, scalability and flexibility. Its
partnership with Wipro will enable them to provide non-linear, scalable
growth, while delivering the highest levels of customer service to their
subscribers. According to the IDC report "Wipro Vanquishes its Opponents with
Significant Outsourcing Win", "Wipro's success in winning the Unitech
Wireless deal will definitely go a very long way in building its credibility
and mindshare among CIOs not only in the telecom industry but in other
verticals as well."
A large Telecom Operator engaged with us for a three year engagement
consisting of end-to-end testing of business processes and applications. This
deal leverages the process, IT and telecom domain skills and is an important
milestone towards the comprehensive Test service offered by Wipro for large
Telecom Operators.
Clients are using Wipro's Retail expertise to transform their business
and gain competitive advantage in a challenging macroeconomic environment. We
entered into a strategic engagement with a leading Wholesaler to enable IT as
a key differentiator in their business.
A leading multi-brand specialty apparel Retailer signed up with Wipro as
IT partner in their transformation journey. Wipro will combine understanding
of the fashion industry and unique transformation solution to improve "speed
to value". As part of the arrangement Wipro will be responsible for
end-to-end information technology services that include Application
Management, Infrastructure Management and Hosting Services.
Wipro won a multi-million dollar deal with a leading Service Provider of
Semiconductor packaging, assembly and testing in Asia. This total outsourcing
engagement focuses on service, technology and process transformation for the
Semiconductor client.
Wipro won a multi-million dollar deal with one of the world's leading
manufacturers of central heating and cooling products to transform business
processes for the company across global locations.
Emerging Technologies and Innovative Solutions
Forrester acknowledged that Wipro has an aggressive strategy for cloud
strategy growth. Wipro's Cloud Computing strategy covers building and
managing private clouds, adopting public clouds and building hybrid
infrastructures to become a trusted advisor to clients who are considering
adoption of these technologies. As a part of the strategy, Wipro has built
applications such as Mortgage Origination Platform for the Banking industry,
Comprehensive Information Management System for Hospitals, Hosted Document
Management and Electronic Data Interchange.
In line with Wipro's Green IT initiative, this quarter we developed
integrated Solutions that can help reduce carbon footprints and energy needs
for multiple industry verticals. One of the solutions for the Telecom
industry, "Wipro's eCO-NET", uses a combination of its network energy
diagnostics tools and end to end network energy operations management
framework.
Wipro launched WIPRO RAPIDS (Rapid Application and Integration Deployment
Solution) a pre-integrated Billing/Operational Support Systems solution for
Communication Service providers. This solution would help customers reduce
time to market and total cost of ownership. WIPRO RAPIDS enabled us to win a
9-year IT outsourcing contract from Unitech Wireless.
This quarter, Wipro also won the prestigious UN Habitat Business Award
for sustainable urbanization for its LEED Certification practice. Wipro is
the only Indian company among the five winners of the HABITAT Business Award
for 2009.
Awards and Recognition
During the quarter, Wipro has been cited as a Leader in The Forrester
Wave: North American SOA Systems Integrators, Q2 2009 (May 2009) and the
Forrester Wave: EMEA SOA Systems Integrators, Q2 2009 (May 2009). The EMEA
report stated "Wipro's SOA consulting and integration capabilities are very
strong - the firm made some deep investments in tools and accelerators for
taking much of the pain out of SOA integration project. . . When Wipro's
recent investments in SOA begin to bear fruit in client projects, it will
further its position as a leading provider of SOA systems integration
services."
Wipro was rated as a top Indian outsourcing firm in The Global
Outsourcing 100(TM) rankings conducted by The International Association of
Outsourcing Professionals (IAOP(TM)). Wipro was ranked fifth globally and was
recognized as a leader for demonstrated competencies.
Wipro received the Salesforce.com Top Partner Award for FY09 for India
and SAARC. Wipro has become one of the only five Tier-1 global strategic
alliance partners for Salesforce.com.
Wipro's Council for Industry Research
Wipro Council for Industry research extended its agenda by collaborating
with academicians from leading Universities globally. One of the notable
achievements was a research paper on creating Green Revenue streams which
explored the Green impact of Outsourcing by Georgetown University.
Wipro was also featured in series of case studies by academician from
leading Global Universities. INSEAD Business School wrote a teaching case
study on Wipro's low cost high impact marketing strategy. The Testing
Services practice was recognized by a faculty of London Business School in a
case study on Wipro's WiFi certification services. A case study on how Wipro
has re-defined its consulting DNA was written by CASS Business School, UK.
Wipro's new product development capabilities were recognized by a faculty at
Cransfield School of management and will be featured in a book on innovation
management.
IT Products (12% of Total Revenue and 3% of Operating Income for our
quarter ended June 30, 2009)
Our IT Products business segment recorded Revenue of Rs. 7.34 billion
($154 million(1)) for our quarter ended June 30, 2009, remaining flat over
the same period last year. EBIT for this segment was Rs. 292 million ($6.1
million(1)) for our quarter ended June 30, 2009.
Our Operating Income to Revenue for this segment was 4% for our quarter
ended June 30, 2009.
Return on Capital Employed (ROCE) for our IT Services and Products
segment was 38% for our quarter ended June 30, 2009, compared to 41% for the
same period last year.
Consumer Care and Lighting (8% of Total Revenue and 7% of Operating
Income for our quarter ended June 30, 2009)
Our Consumer Care and Lighting business segment recorded Revenue of Rs.
5.20 billion ($109 million(1)) for our quarter ended June 30, 2009,
representing an increase of 9% over the same period last year. EBIT for this
segment was Rs. 792 million ($16.6 million(1)) for our quarter ended June 30,
2009, representing an increase of 27% over the same period last year.
Our Operating Income to Revenue for this segment was 15.2% for our
quarter ended June 30, 2009. ROCE for this segment was 17% for our quarter
ended June 30, 2009, compared to 14% for the same period last year.
About Non-GAAP financial measures
The Company provides Non-GAAP Adjusted Net Income (excluding impact of
accelerated amortization of stock based compensation) to supplement reported
GAAP results. Our Non-GAAP Adjusted Net Income excludes the incremental
impact on Net Income in respect of stock options that vest in a graded manner
of recognizing stock compensation expense on an accelerated amortization
basis over recognizing stock compensation expense on a straight line basis,.
This Non-GAAP Net Income is a measure defined by the SEC as a non-GAAP
financial measure. This non-GAAP financial measure is not based on any
comprehensive set of accounting rules or principles and should not be
considered a substitute for, or superior to, financial measures calculated in
accordance with GAAP, and may be different from Non-GAAP measures used by
other companies. In addition to this Non-GAAP measure, the financial
statements prepared in accordance with GAAP and reconciliations of our GAAP
financial statements to such Non-GAAP measure should be carefully evaluated.
The Company believes that the presentation of this Non-GAAP Adjusted Net
Income, when shown in conjunction with the corresponding GAAP measures,
provides useful information to investors and management regarding financial
and business trends relating to its net income. The Company considers the
stock option award with the graded vesting schedule to be in substance a
single award and the related stock compensation should be amortized on a
straight line basis. However, the Company records the stock compensation
expenses on an accelerated amortization basis for GAAP reporting. Therefore,
we believe that making available an adjusted net income number that excludes
the impact of these items from net income provides useful supplemental
information to both management and investors about our financial and business
trends.
For our internal budgeting process, our management also uses financial
statements that excludes the incremental impact of amortizing stock
compensation expense on an accelerated amortization basis over recognizing
stock compensation expense on a straight line basis. The management of the
Company also uses non-GAAP adjusted net income, in addition to the
corresponding GAAP measures, in reviewing our financial results.
A material limitation associated with the use of non-GAAP net income as
compared to the GAAP measures of net income is that it does not include costs
which are recurring in nature and may not be comparable with the calculation
of net income for other companies in our industry. The Company compensates
for these limitations by providing full disclosure of the effects of non-GAAP
measures, by presenting the corresponding GAAP financial measures and by
providing a reconciliation to the corresponding GAAP measure.
Our results for the quarter ended June 30, 2009, computed under Indian
GAAP and IFRS, along with our individual business segment reports, are
available in the Investor Relations section of our website at www.wipro.com.
Quarterly Conference Calls
We will hold conference calls today at 02:00 p.m. Indian Standard Time
(04:30 a.m. US Eastern Time) and at 6:45 p.m. Indian Standard Time (9:15 a.m.
US Eastern Time) to discuss our performance for the quarter and answer
questions sent to email ID: sridhar.ramasubbu at wipro.com. An audio recording
of the management discussions and the question and answer session will be
available online and will be accessible in the Investor Relations section of
our website at http://www.wipro.com.
About Wipro Limited
Wipro provides comprehensive IT solutions and services, including systems
integration, information systems outsourcing, package implementation,
software application development and maintenance, and research and
development services to corporations globally. Wipro Limited is the first
PCMM Level 5 and SEI CMM Level 5 certified IT Services company globally.
Wipro's IT Services business was assessed at Level 5 for CMMI V 1.2 across
Offshore and Onsite development centers.
In the Indian market, Wipro is a leader in providing IT solutions and
services for the corporate segment in India offering system integration,
network integration, software solutions and IT services. Wipro also has a
profitable presence in niche market segments of infrastructure engineering,
and consumer products & lighting. In the Asia Pacific and Middle East
markets, Wipro provides IT solutions and services for global corporations.
Wipro's ADS are listed on the New York Stock Exchange, and our equity
shares are listed in India on the Stock Exchange - Mumbai, and the National
Stock Exchange. For more information, please visit our websites at
www.wipro.com, www.wiprocorporate.com and www.wipro.in.
Forward-looking and Cautionary Statements
In addition to historical information, this press release contains
certain "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The forward-looking statements contained
herein represent Wipro's beliefs regarding future events, many of which are,
by their nature, inherently uncertain and outside Wipro's control. Such
statements include, but are not limited to, statements regarding Wipro's
growth prospects, its future financial operating results, and its plans,
expectations and intentions.
Wipro cautions readers that the forward-looking statements contained
herein are subject to risks and uncertainties that could cause actual results
to differ materially from the results anticipated by such statements. Such
risks and uncertainties include, but are not limited to, risks and
uncertainties regarding fluctuations in our earnings, revenue and profits,
our ability to generate and manage growth, intense competition in IT
services, our ability to maintain our cost advantage, wage increases in
India, our ability to attract and retain highly skilled professionals, time
and cost overruns on fixed-price, fixed-time frame contracts, client
concentration, restrictions on immigration, our ability to manage our
international operations, reduced demand for technology in our key focus
areas, disruptions in telecommunication networks, our ability to successfully
complete and integrate potential acquisitions, liability for damages on our
service contracts, the success of the companies in which we make strategic
investments, withdrawal of fiscal governmental incentives, political
instability, war, legal restrictions on raising capital or acquiring
companies outside India, unauthorized use of our intellectual property, and
general economic conditions affecting our business and industry. Additional
risks that could affect our future operating results are more fully described
in our filings with the United States Securities and Exchange Commission,
including, but not limited to, Annual Reports on Form 20-F. These filings are
available at www.sec.gov. We may, from time to time, make additional written
and oral forward-looking statements, including statements contained in the
company's filings with the Securities and Exchange Commission and our reports
to shareholders. We do not undertake to update any forward-looking statement
that may be made from time to time by us or on our behalf.
(1) For the convenience of the reader, the amounts in Indian rupees in
this release have been translated into United States dollars at the noon
buying rate in New York City on June 30, 2009, for cable transfers in Indian
rupees, as certified by the Federal Reserve Bank of New York, which was US
$1=Rs.47.74. However, the realized exchange rate in our IT Services business
segment for the quarter ended June 30, 2009 was US$1=Rs. 46.74.
(2) IT Services business segment Revenue was Rs. 48.25 billion for the
quarter ended June 30, 2009 under the Indian GAAP. The difference of Rs. 17
million ($0.36 million(1)) is primarily attributable to differences in
accounting standards under Indian GAAP and IFRS.
WIPRO LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Rupees in millions, except share and per share data, unless otherwise
stated)
As of As of
----- -----
June 30, 2009 March 31, 2009 June 30, 2009
------------- -------------- -------------
Convenience
translation
into US$
--------
ASSETS
------
Goodwill 54,242 56,143 1,136
Intangible assets 3,340 3,493 70
Property plant
and equipment 49,492 49,794 1,037
Investment in equity
accounted associates 1,751 1,670 37
Other non-current assets 9,528 10,786 200
----- ------ ---
Total non-current assets 118,354 121,885 2,479
Inventories 6,792 7,586 142
Trade receivables 42,724 48,612 895
Other current assets 12,506 15,297 262
Unbilled revenues 15,797 14,108 331
Available for sale
financial
investments 38,842 16,543 814
Derivative asset 1,127 1,162 24
Current tax assets 11,139 9,826 233
Cash and cash equivalents 36,512 49,117 765
------ ------ ---
Total current assets 165,439 162,251 3,465
------- ------- -----
TOTAL ASSETS 283,793 284,136 5,945
======= ======= =====
EQUITY
------
Share capital 2,931 2,930 61
Share premium 27,687 27,280 580
Retained earnings 135,606 125,502 2,841
Share based
payment
reserve 3,697 3,745 77
Other components of equity (9,178) (11,771) (192)
Shares held by
control trust (542) (542) (11)
---- ---- ---
Equity attributable to the
equity holders of the
company 160,201 147,144 3,356
Minority Interest 266 237 6
--- --- ---
Total equity 160,467 147,381 3,361
------- ------- -----
LIABILITIES
-----------
Long - term
loans and
borrowings 19,133 19,681 401
Employee
benefit
obligations 3,182 3,111 67
Other non-
current
liabilities 1,533 1,668 32
----- ----- ---
Total non-
current
liabilities 23,848 24,460 500
Short - term loans and
borrowings and bank
overdrafts 28,853 37,211 604
Trade payables 34,595 35,768 725
Unearned revenues 5,199 6,734 109
Current tax liabilities 7,118 6,492 149
Derivative liabilities 9,086 12,022 190
Other current liabilities 14,627 14,068 306
------ ------ ---
Total current liabilities 99,478 112,294 2,084
------- ------- -----
Total liabilities 123,326 136,755 2,583
------- ------- -----
TOTAL
LIABILITIES
AND EQUITY 283,793 284,136 5,945
======= ======= =====
WIPRO LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Rupees in millions, except share and per share data, unless
otherwise stated)
Year ended
Three months ended June 30, March 31,
------------------------------------- --------
2008 2009 2009 2009
-------- -------- -------- ---------
Convenience
translation
into US $
-------- -------- -------- ---------
Gross revenues 60,416 63,868 1,337 256,891
Cost of revenues (42,301) (43,247) (906) (180,180)
Gross profit 18,115 20,621 432 76,711
Selling and
marketing
expenses (4,268) (4,239) (89) (17,314)
General and
administrative
expenses (3,170) (3,552) (74) (14,397)
Foreign exchange
gains/(losses),
net (697) (1,406) (29) (1,553)
Results from
operating
activities 9,980 11,424 239 43,447
Finance income/
(expenses), net (400) 101 2 (1,860)
Other income /
(expenses), net 716 254 5 2,946
Share of
profits of
equity
accounted
associates 107 114 2 362
Profit before
tax 10,403 11,893 249 44,895
Income tax
expense (1,443) (1,740) (36) (6,035)
----- ------ --- ------
Profit for the
period 8,960 10,153 213 38,860
----- ------ --- ------
Attributable to:
Equity holders of
the company 8,948 10,104 212 38,761
Minority
interest 12 49 1 99
Profit for the
period 8,960 10,153 213 38,860
Earnings per
equity share:
Basic 6.16 6.94 0.15 26.66
Diluted 6.11 6.89 0.14 26.50
Weighted
average
number of
equity
shares used
in computing
EPS earnings
per equity
share
Basic 1,452,636,163 1,456,161,032 1,456,161,032 1,454,135,089
Diluted 1,463,804,903 1,466,002,776 1,466,002,776 1,462,636,212
Additional
Information
Segment
Revenue
IT Services 44,028 48,266 1,011
IT Products 7,322 7,337 154
IT Services
& Products 51,350 55,603 1,165
Consumer Care
and Lighting 4,749 5,198 109
Others 3,620 1,661 35
Total 59,719 62,462 1,308
Operating
Income
IT Services 9167 10,698 224
IT Products 258 292 6
IT Services
& Products 9,425 10,990 230
Consumer Care
and Lighting 623 792 17
Others -68 (358) (7)
Total 9,980 11,424 239
Reconciliation of
Non-GAAP adjusted
net income to
comparable net
income
Net Income as
per GAAP 8,948 10,104 212
Adjustments:
Accelerated
amortization
of stock options
that vest in a
graded manner 155 -27 (1)
----- ------ ---
Non-GAAP adjusted
net Income 9,103 10,077 211
===== ====== ===
Contact:
Sridhar Ramasubbu
Wipro Limited
+1-408-242-6285
http://www.wipro.com
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