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Tata Communications’ data portfolio drives business momentum; Grows +10.4% YoY despite industry challenges

Tata Communications’ data portfolio drives business momentum; Grows +10.4% YoY despite industry challenges

Growth Services revenues rise 15.1% YoY and turns EBITDA positive | Consolidated EBITDA increases by 13.8% YoY

Mumbai, May 08, 2019

Tata Communications, a leading global digital infrastructure provider, reported its consolidated financial results for the quarter and year ended March 31, 2019.

 

Highlights | FY2019

 

  • Data business witnessed strong growth; revenue grew by 10.4% YoY on the back of strong performance in Growth Services and revenue uptick in Innovation Services[1]
  • Data Services now contribute to 76.6% of the overall revenues; up from 68.3% in FY18
  • EBITDA grew +13.8% YoY driven by strong profitability in data business; margins came in at 16.6%, an increase of 220 bps YoY
  • Growth Services[2] portfolio witnessed strong momentum; revenue grew by 15.1% YoY to USD 398 Mn on the back of large deal wins in this portfolio
  • Traditional Services[3] remained stable despite industry headwinds with operator consolidation; revenue declined by 2.2% YoY. This portfolio has started to stabilise and is expected to grow in FY20
  • Data EBIDTA for the year was INR 2,409 crore; +16.6% YoY, primarily due to Growth Services turning EBITDA positive in Q4
  • Consolidated Revenue reported at INR 16,525 crore; a decline of 1.5% YoY due to decline in Voice business by 27.1% YoY. Strong performance in data business has helped mitigate this decline in voice to a large extent
  • PAT loss significantly came down to INR 82.4 crore as compared to a loss of INR 328.6 crore in FY18
  • CAPEX for FY2019 was at USD 267 Mn as compared to USD 235 Mn in FY18, due to additional investment towards India backbone expansion

 

Consolidated

Nos.

 INR

Crore

 YoY Growth USD Mn YoY Growth
Gross Revenue 16,525 (1.5%) 2,363.7 (9.1%)
EBITDA 2,745 13.8% 392.6 4.9%
EBITDA margin 16.6% 220 Bps 16.6% 220 Bps
PAT (82.4) ↑ (11.8) ↑

 

Highlights | Q4 FY2019

 

  • Consolidated revenue grew by 5.0% YoY and declined by 0.6% QoQ. Adjusted for one-time AFA gain in Q3, revenue grew by 1.2% QoQ
  • Data business revenue grew by 14.2% YoY and 0.5% QoQ, on the back of strong performance in Growth Services. Adjusted for AFA gain, QoQ growth was 2.8%
  • Growth Services reported sequential QoQ revenue growth of 9.2%
  • PAT loss for the quarter was at INR 198.8 crore due to equity loss pick up in STT,  Singapore data centre business to the tune of INR 173 crore

 

Consolidated

Nos.

 INR

Crore

 QoQ

Growth

 YoY Growth USD Mn QoQ

Growth

 YoY Growth
Gross Revenue 4,243.5 (0.6%) 5.0% 602.3 1.7% (4.1%)
EBITDA 685.3 (18.7%) 16.7% 97.2 (17.4%) 6.6%
EBITDA margin 16.1% (360 Bps) 160 Bps 16.1% (380 Bps) 160 Bps
PAT (198.8) ↓ ↓ 28.5 ↓ ↓

 

Commenting on the results, Vinod Kumar, MD and CEO, Tata Communications, said, “The strong growth in our data business has helped us deliver consistent financial performance and create momentum for our future growth. Growth Services continue to scale up and adoption of these platform services is enabling deeper engagement with customers. Our focus remains on offering best in class digital infrastructure solutions; ensuring seamless global connectivity and effortless digital transformation for businesses around the world.”

 

Commenting on the results, Pratibha K. Advani, CFO, Tata Communications, said, “Our startegy to focus on our Data Services portfolio has started to show results with our Growth Services portfolio turning EBITDA positive on the back of strong topline growth and we are starting to see significant traction in our innovation services portfolio. We are confident that we are moving in the right direction and our focus remains on strengthening our cash flows and return ratios as we continue to pursue profitable growth opportunities in future.”

An investor fact sheet providing detailed analysis of the results for the quarter ended March 31st, 2019 has been uploaded on the Tata Communications website and can be accessed here.

 

Business highlights | FY2019

 

Employee success

 

  • Certified a Great Place to Work® in Canada, Greater China, India, Hong Kong and Singapore, ranking high as an equal opportunities employer, with inclusive workplace policies and a high-trust, high-performance culture; and recognised as an Aon Best Employers, India 2018 for third year in a row and in Hong Kong for the second consecutive year
  • Focus on skills transformation organisation-wide with a 23% YoY increase on person learning days to enable employees to enhance or build relevant future skills and technological change continues to accelerate
  • Serving the communities in which we operate, touching over 160,000 lives (+82% YoY) through 60,000 hours of volunteering programmes across India, APAC, the Americas, Europe and MENA

 

Customer success

 

  • New customers and partners include Carlsberg, China Telecom Global, Syniverse, VivoHub, Doki Technologies, ROKiT Williams Racing, Indraprastha Gas Limited, W-Locate, MyRepublic and Antel. Over 35% of our new global customers in FY2019 opted for atleast one of our growth services
  • Awards recognising outstanding customer service highlights include:
    • CX Strategy Summit & Awards – Best Customer Experience
    • Telecom Review Summit – Best Customer Service Provider
    • Stevie Awards Bronze (for sales and customer service)
    • Clarabridge Customer Experience Innovation Award
    • Customer Fest Show- CX Leader of the Year Award
  • Average network uptime of 99.951% including Tx (NLD, MAN, RF) and cable network (India and International)

 

Awards and recognition: Analysts and Industry

 

 

 

ENDS…

 

 

[1] Innovation Services include Mobility, IoT and NetFoundry

[2] Growth Services include IZO™, Managed Hosting, Managed Security Services, Media Services, SIP Trunking, Global Hosted Contact Center, Mobile New Services, Healthcare, Media Management and Mobile Innovation

[3] Traditional services include Virtual Private Network, International Private Line, Internet Leased Line, Ethernet, Internet Protocol –Transit, Inmarsat, Content Delivery Network, National Private Line, Mobility, Data Centre, Unified Collaboration and Conferencing

Ends...

Media Contact: Shahnaz Mansoor Tata Communications +91 98339 96903 shahnaz.mansoor@tatacommunications.com Investor Contact Vipul Garg Tata Communications +91 11 66257431 vipul.garg@tatacommunications.com

About Tata Communications

Tata Communications is a leading global digital infrastructure provider that powers today’s fast- growing digital economy. The company’s customers represent 300 of the Fortune 500 whose digital transformation journeys are enabled by its portfolio of integrated, globally managed services that deliver local customer experiences. Through its network, cloud, mobility, Internet of Things (IoT), collaboration and security services, Tata Communications carries around 30% of the world’s internet routes, and connects businesses to 60% of the world’s cloud giants and 4 out of 5 mobile subscribers. The company’s capabilities are underpinned by its global network, which is the world’s largest wholly owned subsea fibre backbone and a Tier-1 IP network. Tata Communications Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India, and it serves customers in more than 200 countries and territories worldwide through its technology capabilities and partnerships. www.tatacommunications.com

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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