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Strong growth for Sify in Q3; further reduction in cash losses

Our Convergence Bureau
17 January 2003

Performance highlights:

  • Sales revenue increased 24 per cent over the same quarter last year; 12 per cent sequential over the last quarter
  • Cash losses reduced to $2.92 million; 33 per cent reduction over the same quarter last year and 8 per cent lower than the last quarter
  • Cash burn (net reduction in cash) was $3.96 million. This includes a one-off payment of $1.2 million towards renewal of directors and officers liability insurance policy for a period of one year
  • Cash and cash equivalents as at the end of the quarter was $21.7 million (including the $16.5 million received in December 2002 out of the planned investment from Softbank Asia Infrastructure Fund and VentureTech)

Says Sify CEO and managing director R Ramaraj: “I am pleased with Sify’s 24-per cent growth in topline revenue over the same quarter last year. This growth is seen in both our corporate network services business and in our consumer access businesses. In addition, costs continue to be managed, resulting in reduction of cash losses by a third.

“I am also pleased to report that the first tranche of the planned investments has been received and the new directors from Softbank and Venture Tech have assumed their positions. Sify looks forward to the synergies that can arise from their association.”

Cash loss represents earnings before interest, income tax, depreciation and amortisation (EBITDA). This is not part of the certified financial statements published under US GAAP. Cash loss per American depository receipts (ADR) and the net loss per ADR for the quarter ended 31 December 2002 have been calculated at a weighted average of 24.9 million ADRs. For the other periods it is at 23.2 million ADRs. One ADR is equivalent to one equity share. Corporate services: Sify’s corporate services business, accounting for 50 per cent of sales revenue, witnessed major wins in the VPN market space, reinforcing Sify’s leadership in the segment. Value-based solutions such as messaging and web-based solutions found acceptance and resulted in additional customer wins.

  • Sales revenue grew by 25 per cent over the same quarter last year (7 per cent over the immediately preceding quarter)
  • ExpressMeet, a voice enabled web-based digital conferencing solution, gained customers including Birla Management Corporation
  • Customer wins in the web-based solutions space included orders from National Panasonic India and New India Assurance. In the messaging solutions space, major wins include Sundaram Fasteners, State Bank of Mysore and Apcom Computers
  • The addition of STM-1 fibre international bandwidth resulted in new engagements with call centres and increased requirements from major customers like General Electircals and Hutch

Orders for VPNs / Internet bandwidth were received from New Delhi Power Ltd, Sita World Travel, Electronic Data Systems, Metlife India and ICI India Ltd. Migration of Wipro’s corporate network customers was completed during the quarter.

Technological advancements in hosting services include the introduction of a path-breaking security concept branded FortKnox, implementation of Alteon switch Firewalls and migration to a new back-up solution, Netvault.

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