Tata Communications sees first profit in 5 years; reports Rs101 cr net profit for FY'14

Tata Communications has reported a net profit of Rs101.4 crore for the financial year 2013-14 ended 31 March 2014, marking the company's first consolidated annual net profit in the last five years.

This has been made possible because of significant improvement in underlying operational performance, the company stated in a release.

For the fourth quarter ended 31 March 2014, the company reported a 19 per cent growth in consolidated revenue from operations at Rs5,215.3 crore ($843 million) compared to Rs4,400.5 crore ($812 million) in the corresponding quarter of the previous year.

Consolidated EBITDA improved by 60 per cent to Rs779.8 crore ($126 million) in Q4 of FY14 compared to Rs486.5 crore ($90 million) in the corresponding quarter last year.

Revenue from operations for the core business grew 16 per cent to Rs4,579.3 crore ($741 million) from Rs3,934.5 crore ($726 million) during the corresponding quarter a year ago.

The start-up business, comprising primarily of Neotel, contributed 37 per cent to the rise in revenues at Rs636 crore (ZAR 1.12 billion), compared to Rs466 crore (ZAR768 million) in Q4 of FY13. The start-up business EBITDA margins stood at 28.2 per cent during the quarter, compared with 7.4 per cent in Q4 of FY13.

''We continue our focus on securing future growth and driving cost efficiencies across our business. Riding on the back of operating leverage in our business and growth momentum in our industry we are committed to achieving a high degree of financial agility supporting long-term business growth,'' Sanjay Baweja, chief financial officer, Tata Communications, said.

For the full financial year ended 31 March 2014, consolidated revenue from operations improved by 14 per cent to Rs19,619.6 crore ($3.24 billion) compared to Rs17,213.0 crore ($3.17 billion) in FY2013.

The growth in revenues was broad-based with strong momentum across all segments, the company said.

Revenue from core business operations stood at Rs17,450.9 crore ($2.89 billion) against Rs15,318.1 crore ($2.82 billion) in the previous year, posting a growth of 14 per cent.

Tata Communications said its wholesale voice business continued to outpace the global market growth rate, recording 11 per cent growth in revenue from operations compared to FY'13.

Global data segment recorded a strong year with 17 per cent growth in revenues, primarily attributed to strong demand from global enterprise customers for Ethernet, VPN solutions and a host of managed services.

It said its start-up business revenue improved by 14 per cent to Rs2,168.7 crore from Rs1,894.8 crore in FY'13.

Tata Communications said its continued focus on cost-management and progressive innovation in its product portfolio propelled a significant increase in operating profitability and net profits during the year.

FY14 consolidated EBITDA stood at Rs3,041.6 crore ($503 million) from Rs2,059.7 crore ($379 million) last year, recording a significant growth of 48 per cent.

FY14 consolidated EBITDA margins increased by 350 bps in FY14 to 15.5 per cent, compared to 12 per cent in the previous year.

The company reported a net profit of Rs101.4 crore for the financial year 2013-14 ended 31 March 2014, marking the company's first consolidated annual net profit in the last five years.

The company recommended a dividend of Rs4.50 per share.

''Tata Communications has delivered a year of strong growth and has strengthened its competitive positioning in the market. Our ongoing focus on execution, talent development and sharpening our value proposition is delivering tangible value. Our recent ascension to the Leaders' quadrant of the Gartner Magic Quadrant for Global Network Service Providers for the first time is an endorsement of our global competitiveness. Going forward, we will continue to execute our growth strategy and deliver value to our stakeholders,'' Vinod Kumar, MD and CEO, Tata Communications, said.

During the fourth quarter, Tata Communications signed agreement with Turkcell Superonline to deploy MPLS PoP in Turkey - Tata Communications and Turkcell Superonline signed a collaboration agreement to set up a Multiprotocol

Label Switching (MPLS) node in Istanbul. This collaboration strengthens the reach of Tata Communications' global MPLS network and brings direct and robust connectivity to global and regional businesses into and out of the region.

Tata Communications delivers live Formula 1 video feeds to Chello DMC for Sport1 broadcast. Tata Communications, announced that it is providing official F1 licensee/broadcaster Chello DMC live Formula 1 video feeds via its wholly-owned fibre network for the first time this season. The high quality video feeds, broadcast on Dutch sports channel, Sport1 will be used for the channel's full 2014 race season coverage.

Tata Communications expands its global data centre footprint in Australia, Germany, Austria and Malaysia. The company expanded its global data centre footprint by entering strategic partnerships with NEXTDC in Australia, Interxion in Germany and Austria, as well as Pacific Link Telecom (PLT) in Malaysia.

These partnerships will enable Tata Communications to extend its current data centre offerings in these regions and to deliver a uniform customer experience across geographies, the company said.