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Tata Communications delivers strong operating performance | Q4 Data EBITDA increased by +39.8% with margin expansion of 530 Bps YoY

Tata Communications delivers strong operating performance | Q4 Data EBITDA increased by +39.8% with margin expansion of 530 Bps YoY

Significant uptick in Internet traffic (+23% QoQ) and Conferencing revenue (+20% QoQ) resulting from quick deployment of global work from home measures and solutions

Mumbai, June 13, 2020

Tata Communications today announces its financial results for the quarter and full-year ended March 31st, 2020

Highlights

Data services portfolio

  • Strong growth in Data business; Q4 revenue grew by +7.5% YoY on the back of robust performance in Traditional and Growth services aided by an uptick in usage due to the COVID-19 pandemic and ensuing lockdowns. Full year revenue grew by +8.2% YoY
  • Q4 Data EBITDA was at INR 823 crore (USD 114 Mn); up +39.8% YoY led by a strong profitable gain in Growth services1, robust performance in Traditional services. Full Year EBITDA grew by +25.6% with a margin expansion of 310 BPs
  • Traditional services2 saw strong growth in revenue and profitability; revenue grew by +5.3% YoY and EBITDA grew by +24.5% YoY with margins at 37.0%. Within this portfolio, we witnessed a surge in internet traffic (+23% QoQ) with enterprises implementing work from home
  • Growth services continue to scale and witness profitable growth; revenue grew by +9.8% YoY. Within this portfolio, we witnessed a surge in Conferencing traffic and revenue (+20% QoQ). We have achieved double-digit margin (11.6%) in this portfolio during the quarter

 

Consolidated financial highlights

  • Q4 Consolidated revenue was at INR 4,398 crore (USD 608 Mn); growth of +3.6% YoY on the back of continued strong performance in the Data business
  • Q4 Consolidated EBITDA stood at INR 869 crore (USD 120 Mn); increase of +26.8% YoY on the back of strong profitable growth in Traditional and Growth services
  • Consolidated loss was at INR 275 crore (USD 39 Mn) as compared to a loss of INR 199 crore in Q4 FY19. This quarter’s loss was due to a provision of INR 342 crore towards additional license fees liability. Full year loss at INR 86 crore

 

Consolidated Nos. INR

Crore

 QoQ Growth YoY Growth USD Mn QoQ Growth YoY Growth
Gross Revenue 4,398 4.0% 3.6% 608 2.5% 1.0%
EBITDA 869 14.2% 26.8% 120 12.8% 23.7%
EBITDA margin 19.8% 180 BPs 360 Bps 19.8% 180 Bps 360 Bps
PAT (275) NA NA (39) NA NA

 

Commenting on the results, A.S Lakshminarayanan, MD and CEO, Tata Communications, said, “We are living in extraordinary times with the COVID-19 pandemic continuing to disrupt businesses at large. At Tata Communications, we are enabling smooth and continued operations of services for our customers, delivering service upgrades and changes in record speed, as they implement work from home measures and shift workloads seamlessly across borders as part of their business continuity plans. We are also helping our large customers and partners to rapidly expand network capacity to serve the need of their own customers. The agility, service quality and responsiveness of our teams is being recognised by our customers who continue to show their appreciation. Our customer satisfaction score during this time has seen a record high – contributing to a top quartile Net Promotor Score (NPS).

 

As enterprises adapt and find a new equilibrium in this contact-free economy, Tata Communications is delivering secure connected digital experiences to enable them to unlock the economic value and the potential that digital transformation provides. Our platforms, solutions and services are not only enabling tens of thousands of employees of our enterprise customers to work from home, collaborate, improve productivity, and maintain business continuity, they are also keeping people and societies connected. We are proud of the work our teams have been doing in this crisis. The business results and the response from our customers are a testament to Tata Communications’ role as a key enabler in our customers’ digital future.”

 

Commenting on the results, Pratibha K. Advani, Chief Financial Officer, Tata Communications, said, “We have registered another quarter of robust growth in these tough times with all our financial and operating metrics tracking in the right direction.

 

We witnessed strong profitable growth in our Data business; in FY20, EBITDA margins for Data business expanded by 310 BPs coming in at 22.1% on the back of Growth services’ delivering INR 199 crore of EBITDA for the year. We continue to drive the business towards sustainable profitability and positive cashflows.”

 

An investor fact sheet providing a detailed analysis of the results for the quarter ended March 31st, 2020 has been uploaded on the Tata Communications website and can be accessed here

 

Business highlights | FY2020

COVID-19 response:

  • Delivered 650+ orders resulting from COVID-19, corresponding to 1.35 TBPS of additional provisioned bandwidth.
  • 30% growth in internet traffic on our network in March compared to January 2020.
  • Capacity expansion in a short span of time has been possible due to extensive upgrade and modernisation of our network done in the last three years.
  • Recorded 1 billion minutes of Enterprise voice traffic in March alone.
  • Enabled 98% of Tata Communications employees to work from home within two weeks, thanks to the robust infrastructure in place.

CSR:

  • In FY20, our programmes and initiatives reached out to 1,64,000 people, of which 69% were young girls and women, and 34% from affirmative action communities. Our focus remains on the four cornerstones – digital enablement, affirmative action, women and young girls and disaster relief – which help us create shared value for the communities we serve within the overarching framework of the UN Sustainable Development Goals.
  • DRIVE week: Tata Communications’ company-wide tools-down day that unites employees across geographies to serve the common goal of giving back to society, saw 7,700 volunteers in FY20; contributing a cumulative of 44,238 hours of volunteering and touching 47,139 lives across countries. DRIVE week is a movement at Tata Communications that focuses on a clear strategic objective of serving the communities in which we operate. Along with other initiatives, we clocked 59,184 volunteering hours in FY20 (5 hours per capita) with a global footprint in 51 cities, which supported more than 20 different causes.
  • Our CSR efforts also continued during the time of COVID-19. We are responding to the call of the community, along with our partners. Our teams are engaged in providing:
    • Support to hospitals under Pune Chinchwad Municipal Corporation (PPE & isolation ward set-up)
    • Ration and hygiene kits for thousands of families in need. Also, ration for 500 families of children studying in two schools run by the Brihanmumbai Municipal Corporation, Mumbai.
    • Tata Communications raised $135K through employee contribution. In addition, the company has matched this amount and the total sum is being allocated to Tata Community Initiatives Trust and local NGOs in India as well as other countries around the world.

Awards: Outstanding customer service

Awards: Best Employer

Awards: Analyst recognition

 

Awards: Industry recognition

 

 

Ends...

Media contact: Shahnaz Mansoor Tata Communications +91 (0)98339 96903 shahnaz.mansoor@tatacommunications.com Investor contact: Vipul Garg Tata Communications +91 (11) 6625 7431 vipul.garg@tatacommunications.com

About Tata Communications

Tata Communications is a digital ecosystem enabler that powers today’s fast-growing digital economy. The company enables the digital transformation of enterprises globally, including 300 of the Fortune 500 – unlocking opportunities for businesses by enabling borderless growth, boosting product innovation and customer experience, improving productivity and efficiency, building agility and managing risk. With its solutions orientated approach and proven managed service capabilities and cutting-edge infrastructure, Tata Communications drives the next level of intelligence powered by cloud, mobility, Internet of Things (IoT), collaboration, security, and network 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, the world’s largest wholly owned subsea fibre backbone and a Tier-1 IP network with connectivity to more than 200 countries and territories. Tata Communications Limited is listed on the Bombay Stock Exchange and the National Stock Exchange of India. 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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