Updating With Tabular Information — Wipro Records 19% YoY Growth in Profit After Tax IT Services Business Crosses the 100,000 Employee Mark
By Wipro Limited, PRNETuesday, January 19, 2010
Results for the Quarter Ended December 31, 2009 Under IFRS
BANGALORE, India and EAST BRUNSWICK, New Jersey, January 20 - Wipro Limited (NYSE: WIT) today announced financial results under IFRS
for its third fiscal quarter ended December 31, 2009.
Highlights of the Results:
- IT Services Revenue in dollar terms was $1,126.8 million, a
growth of 5.8% sequentially and 2.4% YoY.
- IT Services Revenue on a constant currency basis was
$1,117.1 million, a sequential growth of 4.9%. On a constant currency
basis, YoY decline was 0.8%.
- Total Revenues were Rs. 69.77 billion ($1.50 billion(1)), representing
an increase of 6% over the same period last year.
- Net Income was Rs. 12.03 billion ($259 million(1)),
representing an increase of 19% over the same period last year.
- Non-GAAP Adjusted Net Income (excluding impact of
accelerated amortization of stock based compensation) was Rs. 12.06
billion ($260 million(1)), representing an increase of 19% over the
same period last year.
- IT Services Revenues were Rs. 51.65 billion ($1,113
million(1)), representing an increase of 2% over the same period last
year.
- IT Services Earnings Before Interest and Tax (EBIT) was Rs.
12.18 billion ($263 million(1)), representing an increase of 17% over
the same period last year.
- IT Services added 31 new clients in the quarter.
- IT Products Revenue grew 22% over the same period last year
and EBIT grew by 50%.
- IT Services business had a net addition of 4,855 employees.
- Consumer Care and Lighting Revenue grew 18% over the same
period last year, and EBIT grew 20%.
Performance for the Quarter ended December 31, 2009 and Outlook for our
Quarter ending March 31, 2010
Azim Premji Chairman of Wipro, commenting on the results said -
"We have seen a positive demand environment which has driven broad based
sequential growth across all our verticals, service lines and geographies. In
2010, we expect IT budgets to be flat to marginally positive. For the quarter
ending March 31, 2010, we expect revenues from our IT Services business to be
in the range of $1,161 million to $ 1,183 million.*"
Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro,
said -
"We reported another strong quarter driven by significant uptick in
volumes. We have maintained margins despite a decrease in our rate
realization and a strong appreciation of the rupee. Our Order Booking has
been good and BFSI has bounced back strongly."
* Guidance is based on the following constant currency exchange rates:
GBP/USD at 1.63, Euro/USD at 1.46, AUD/USD at 0.91, USD/INR at 46.64
Wipro Limited
Total Revenue for our quarter ended December 31, 2009 was Rs. 69.77
billion ($1.50 billion(1)), representing an increase of 6% over the same
period last year. Net Income for our quarter ended December 31, 2009 was
Rs.12.03 billion ($259 million(1)), representing an increase of 19% over the
same period last year. Net Income for our quarter ended December 31, 2009 on
an Adjusted Non-GAAP basis (excluding impact of accelerated amortization of
stock based compensation) was Rs. 12.06 billion ($260 million(1)),
representing an increase of 19% over the same period last year. Earnings per
Share for our quarter ended December 31, 2009 were Rs 8.25 ($0.18(1)),
representing an increase of 19% over the same period last year. Non-GAAP
Adjusted Net Income (excluding the impact of accelerated amortization of
stock based compensation) per Share for our quarter ended December 31, 2009
were Rs. 8.27 ($0.181), representing an increase of 19% over the same period
last year.
Reconciliation between IFRS 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 (74% of Total Revenue and 90% of Operating Income for our
quarter ended December 31, 2009)
Our IT Services business segment recorded Revenue of Rs. 51.65 billion(2)
($1,113 million(1)) for our quarter ended December 31, 2009, representing an
increase of 2% over the same period last year. EBIT for this segment was Rs.
12.18 billion ($263 million(1)) for our quarter ended December 31, 2009,
representing an increase of 17% over the same period last year.
Our Operating Income to Revenue for this segment was 23.6% for our
quarter ended December 31, 2009.
We had 102,746 employees as of December 31, 2009, an increase of 4,855
people.
Wipro's ability to offer integrated Service lines and be a
transformational partner to our clients helped us secure several large deals
this quarter. Our focus in driving consulting led engagements to solve
business challenges is being recognized by our customers.
A large Europe-based global steel manufacturer is leveraging Wipro's
business transformation expertise to engage in business driven initiatives
during a period of strategic restructuring. This multi-year strategic program
for the customer would help it achieve significant business and operational
benefits.
Wipro entered into a multi-year outsourcing engagement with a leading
Global tobacco group, to help the customer improve the effectiveness and
efficiency of application support services for its global business
operations.
Our India & Middle East business registered some strong wins during the
quarter. Wipro Arabia won a very large order from an upcoming university in
Saudi Arabia for end-to-end set up of their IT and Telecom infrastructure.
Wins in the infrastructure segment also include turnkey implementation of
State Data Center projects for Gujarat and Maharashtra, end-to-end
implementation of a Data Center for Shipping Corporation of India (SCI), and
upgrade and enhancement of the Primary Data Center and Disaster Recovery
Infrastructure for Oriental Bank of Commerce. Another prestigious win in the
government sector was a turnkey project for implementation of FINnet
(Financial intelligence network) for tracking money laundering, financing of
unlawful activities and other economic crimes occurring within the country
for Financial Intelligence Unit, Ministry of Finance, India.
Awards and Recognition
Wipro's commitment to mitigating the effects of climate change and
furthering the Green IT agenda was recognized by Asia Case Research Center
(ACRC), a premier portal for teaching case studies that has written a case
study on Wipro's Green IT initiatives. ACRC is the nodal agency for all
research cases and this case study will get syndicated across premier
universities globally.
Wipro was recognized as a winner of the 2009 Global MAKE (Most Admired
Knowledge Enterprises) Award for 'developing knowledge workers through senior
management leadership' and 'creating an environment for collaborative
knowledge sharing'. This is the third time that Wipro has been recognized as
a Global MAKE winner.
Wipro's website, www.wipro.com was awarded the 5th Annual Davey Award,
for outstanding work in digital design by The International Academy of Visual
Arts.
Wipro won the Outsourcing Institute and Vantage Partners' RMMY award for
Best Performance Management Process. Wipro has been recognized by this award
for the second consecutive year in a row.
The Wipro Brand continued to set high benchmarks in the industry. Wipro
was ranked 8th in the India's most valuable Brand (2009) study carried out by
Brand Finance, a global Brand Valuation firm for Economic Times.
Expanding our global footprint
In line with our globalization strategy, we announced the inauguration of
our global delivery centre at Chengdu, China to provide IT & BPO services to
our customers. This new center, in addition to our Shanghai center, will
increase Wipro's service capabilities in the region.
We also announced the expansion of our Atlanta development center. The
center will continue to focus on delivering world-class services and creating
new job opportunities in the local community.
IT Products (14% of Total Revenue and 4% of Operating Income for our
quarter ended December 31, 2009)
Our IT Products business segment recorded Revenue of Rs. 10.11 billion
($218 million(1)) for our quarter ended December 31, 2009, recording growth
of 22% over the same period last year. EBIT for this segment was Rs. 603
million ($12.99 million(1)) for our quarter ended December 31, 2009.
Our Operating Income to Revenue for this segment was 6.0% for our quarter
ended December 31, 2009.
Return on Capital Employed (ROCE) for our IT Services and Products
segment was 46% for our quarter ended December 31, 2009, compared to 46% for
the same period last year.
Consumer Care and Lighting (8% of Total Revenue and 6% of Operating
Income for our quarter ended December 31, 2009)
Our Consumer Care and Lighting business segment recorded Revenue of Rs.
5.74 billion ($124 million(1)) for our quarter ended December 31, 2009,
representing an increase of 18% over the same period last year. EBIT for this
segment was Rs. 747 million ($16.11 million(1)) for our quarter ended
December 31, 2009, representing an increase of 20% over the same period last
year.
Our Operating Income to Revenue for this segment was 13.0% for our
quarter ended December 31, 2009. ROCE for this segment was 16% for our
quarter ended December 31, 2009, compared to 13% for the same period last
year.
During the quarter, Wipro completed its acquisition of the Yardley
business in Asia, Middle East, Australasia and certain African markets from
the UK-based Lornamead Group. The revenues of Yardley have been consolidated
with Wipro from December 9, 2009.
About Non-GAAP financial measures
This press release contains non-GAAP financial measures within the
meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP
financial measures are measures of our historical or future performance,
financial position or cash flows that are adjusted to exclude or include
amounts that are excluded or included, as the case may be, from the most
directly comparable financial measure calculated and presented in accordance
with IFRS.
The table on page 8 provides our Adjusted Net Income for the period,
which is a non-GAAP measure that excludes the impact of accelerated
amortization in respect of stock options that vest in a graded manner.
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, the most directly comparable financial measure calculated in
accordance with IFRS, 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 IFRS and the reconciliation of this
non-GAAP financial measure with the most directly comparable IFRS financial
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 IFRS measure,
provides useful information to investors and management regarding financial
and business trends relating to its net income for the period. The Company
considers a stock option award with the graded vesting schedule to be in
substance a single award not multiple stock option awards. Further, the
Company considers the services of the employee in each year covered by the
stock option award to be equally valuable and accordingly believes that the
straight line amortization reflects the economic substance of the stock
awards. However, the Company records the related stock compensation expenses
on an accelerated amortization basis for IFRS reporting. Therefore, we
believe that making available an adjusted net income number that excludes the
impact of accelerated amortization 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 exclude the impact of accelerated amortization relating to
stock options that vest in a graded manner. The management of the Company
also uses Non-GAAP Adjusted Net Income, in addition to the corresponding IFRS
measure, in reviewing our financial results.
A material limitation associated with the use of Non-GAAP Adjusted Net
Income as compared to the IFRS measure 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 this non-GAAP measure, by presenting the corresponding IFRS
financial measure and by providing a reconciliation to the corresponding IFRS
measure.
Our results for the quarter ended December 31, 2009, computed under
Indian GAAP and IFRS, along with our individual business segment reports, are
available in the Investors 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
(03:30 a.m. US Eastern Time) and at 6:30 p.m. Indian Standard Time (8:00 a.m.
US Eastern Time) to discuss our performance for the quarter and answer
questions sent to email ID: sridhar.ramasubbu@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 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.
Wipro also has a strong presence in niche market segments of
Infrastructure Engineering, and Consumer Products & Lighting.
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 December 31, 2009, for cable
transfers in Indian rupees, as certified by the Federal Reserve Board of New
York, which was US $1=Rs.46.40. However, the realized exchange rate in our IT
Services business segment for the quarter ended December 31, 2009 was
US$1=Rs.45.84
2. IT Services business segment Revenue was Rs. 51.64 billion for the
quarter ended December 31, 2009 under the Indian GAAP. The difference of
Rs.12 million ($0.26 million(1)) is primarily attributable to differences in
accounting standards under Indian GAAP and IFRS.
WIPRO LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Rupees in millions, except share and per share data,
unless otherwise stated)
As of
March 31, As of December 31,
2009 2009 2009
--------- --------- -----------
Convenience
translation
into US $
in millions
--------- --------- -----------
ASSETS
Goodwill 56,143 54,254 1,169
Intangible assets 3,493 4,152 89
Property, plant and equipment 49,794 53,074 1,144
Investment in equity accounted investees 1,670 1,991 43
Other non-current assets 10,675 9,021 194
Total non-current assets 121,775 122,492 2,640
Inventories 7,587 7,880 170
Trade receivables 48,652 50,035 1,078
Other current assets 15,083 18,334 395
Derivative assets 1,162 2,559 55
Unbilled revenues 14,108 16,385 353
Available for sale investments 16,543 39,855 859
Current tax assets 9,826 11,883 256
Cash and cash equivalents 49,117 42,563 917
Total current assets 162,078 189,494 4,084
TOTAL ASSETS 283,853 311,986 6,724
EQUITY
Share capital 2,930 2,935 63
Share premium 27,280 28,810 621
Retained earnings 126,646 153,664 3,312
Share based payment reserve 3,745 3,178 68
Other components of equity (12,915) (6,623) (143)
Shares held by control trust (542) (542) (12)
Equity attributable to the equity
holders of the company 147,144 181,422 3,910
Minority Interest 237 393 8
Total equity 147,381 181,815 3,918
LIABILITIES
Long - term loans and borrowings 19,681 19,079 411
Employee benefit obligations 3,111 2,907 63
Other non-current liabilities 1,668 757 16
Total non-current liabilities 24,460 22,743 490
Loans and borrowings and bank overdrafts 37,211 35,849 773
Trade payables and accrued expenses 41,650 44,548 960
Unearned revenues 8,453 8,423 182
Current tax liabilities 6,492 7,666 165
Derivative liabilities 12,022 5,047 109
Other current liabilities 6,184 5,895 127
Total current liabilities 112,012 107,428 2,315
TOTAL LIABILITIES 136,472 130,171 2,805
TOTAL EQUITY AND LIABILITIES 283,853 311,986 6,724
WIPRO LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME
(Rupees in millions, except share and per share data,
unless otherwise stated)
Three months ended December 31,
---------------------------------------
2008 2009 2009
--------- --------- ------------
Convenience
translation
into US $
in millions
--------- --------- ------------
Gross revenues 65,898 69,380 1,495
Cost of revenues (46,409) (47,766) (1,029)
Gross profit 19,489 21,614 466
Selling and marketing expenses (4,364) (4,817) (104)
General and administrative
expenses (4,191) (3,655) (79)
Foreign exchange gains/(losses),
net 186 394 8
Results from operating activities 11,120 13,536 292
Finance and other income /
(expenses), net 452 721 16
Share of profits of equity
accounted associates 114 128 3
Profit before tax 11,686 14,385 310
Income tax expense (1,572) (2,321) (50)
Profit for the period 10,114 12,063 260
Attributable to:
Equity holders of the company 10,098 12,032 259
Minority interest 16 31 1
Profit for the period 10,114 12,063 260
Earnings per equity share:
Basic 6.94 8.25 0.18
Diluted 6.91 8.19 0.18
Weighted average number of
equity shares used in
computing EPS earnings per
equity share
Basic 1,454,578,545 1,457,758,937 1,457,758,937
Diluted 1,461,046,302 1,469,303,689 1,469,303,689
Additional Information
Segment Revenue
IT Services 50,787 51,648 1,113
IT Products 8,269 10,114 218
IT Services & Products 59,056 61,762 1,331
Consumer Care and Lighting 4,864 5,743 124
Others 2,164 2,269 49
Total 66,084 69,774 1,504
Operating Income
IT Services 10,422 12,182 263
IT Products 401 603 13
IT Services & Products 10,823 12,784 276
Consumer Care and Lighting 621 747 16
Others (324) 5 0
Total 11,120 13,536 292
Reconciliation of adjusted
Non-GAAP profit to profit
as per IFRS
Profit for the period as per IFRS 10,098 12,032 259
Adjustments :
Accelerated amortization of
stock options that vest in
a graded manner (14) 28 1
Non-GAAP adjusted profit 10,084 12,060 260
Nine months ended December 31,
---------------------------------------
2008 2009 2009
--------- --------- ------------
Convenience
translation
into US $
in millions
--------- --------- ------------
Gross revenues 191,616 202,185 4,357
Cost of revenues (134,850) (138,534) (2,986)
Gross profit 56,766 63,651 1,372
Selling and marketing expenses (12,996) (13,547) (292)
General and administrative
expenses (10,933) (11,183) (241)
Foreign exchange gains/(losses),
net (792) (772) (17)
Results from operating activities 32,045 38,149 822
Finance and other income /
(expenses), net 1,001 1,757 38
Share of profits of equity
accounted associates 327 354 8
Profit before tax 33,373 40,260 868
Income tax expense (4,574) (6,279) (135)
Profit for the period 28,799 33,981 732
Attributable to:
Equity holders of the company 28,749 33,842 729
Minority interest 50 139 3
Profit for the period 28,799 33,981 732
Earnings per equity share:
Basic 19.78 23.23 0.50
Diluted 19.66 23.04 0.50
Weighted average number of
equity shares used in
computing EPS earnings per
equity share
Basic 1,453,654,904 1,456,931,312 1,456,931,312
Diluted 1,462,331,122 1,469,028,352 1,469,028,352
Additional Information
Segment Revenue
IT Services 142,306 149,894 3,230
IT Products 25,516 29,305 632
IT Services & Products 167,822 179,199 3,862
Consumer Care and Lighting 14,447 16,500 356
Others 8,555 5,714 123
Total 190,824 201,413 4,341
Operating Income
IT Services 29,527 34,691 748
IT Products 1,071 1,504 32
IT Services & Products 30,598 36,195 780
Consumer Care and Lighting 1,896 2,272 49
Others (449) (318) (7)
Total 32,045 38,149 822
Reconciliation of adjusted
Non-GAAP profit to profit
as per IFRS
Profit for the period as per IFRS 28,749 33,842 729
Adjustments :
Accelerated amortization of
stock options that vest in
a graded manner 175 (101) (2)
Non-GAAP adjusted profit 28,924 33,741 727
Contact: Sridhar Ramasubbu, Wipro Limited, +1-408-242-6285
Sridhar Ramasubbu, Wipro Limited, +1-408-242-6285
Tags: Bangalore, India, India And East Brunswick, new jersey, Western Europe, Wipro Limited
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