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Tata Communications reports loss of Rs 3.28 billion for year ended March 2018

May 11, 2018

Tata Communications has announced its financial results for the quarter and year ended March 31, 2018. The company reported consolidated loss of Rs 3.28 billion due to exceptional losses during the year on account of impairment of investments and other one offs.

Data business revenues for 2017-18 grew by 4.4 per cent year-on-year (YoY) due to strong performance in traditional and growth services. Traditional services witnessed steady growth of 3.9 per cent YoY. The growth was led by internet leased lines and Ethernet both of which grew by 14 per cent YoY, VPN grew by 10 per cent during the same period. Growth services grew by 35.6 per cent YoY in 2017-18.

However, consolidated revenues declined primarily because of lower volume and price compression in voice and currency translation impact. Consolidated EBITDA was also lower due to decline in voice EBITDA, investment into growth and innovation services and de-growth in payment solution business. Full year margins expanded by 40 base points; aided by higher margin in Tata Communications Transformation Services Limited (TCTSL) and traditional data services.

TCTSL revenues grew by 9.8 per cent YoY, EBITDA for the year grew by 25.6 per cent on the back of improved quality of revenue and cost efficiencies. Tata Communications Payment Solutions Limited (TCPSL) broke even in the quarter ended March 2018, on account of pick up in number of transactions and cost optimisation initiatives.

During the quarter ended March 2018, consolidated revenue declined by 2.6 per cent quarter-on-quarter (QoQ) and 6.6 per cent YoY primarily due to decline in voice revenue.  Data business revenues grew 0.4 per cent QoQ and 4.0 per cent YoY, on the back of strong performance in growth services.

Growth services revenues grew by 8.3 per cent QoQ and 37.3 per cent YoY. Cloud services, security and hosting solutions have witnessed very strong growth. Traditional services revenue declined by 1.8 per cent QoQ but increased 1.1 per cent on a YoY basis. Within this portfolio, ILL grew by 12.2 per cent YoY and ethernet grew by 9.4 per cent YoY. Data margins were lower QoQ as margins were impacted due to upfront investment.

Commenting on the results, Vinod Kumar, MD and CEO, Tata Communications, said, “FY18 has been a reset year for Tata Communications, as we transformed our portfolio and operating structure to make us more competitive and responsive to the evolving needs of our customers. At the same time, the success of our growth services portfolio has enabled us to move from a pure connectivity provider to a next generation digital infrastructure provider. Separately, the land demerger proceedings are headed in the right direction and will benefit shareholders who have steadfastly stood by us.”

Commenting on the results, Pratibha K. Advani, CFO, Tata Communications, said, “The momentum created by our data services portfolio is driving a shift in our performance. Data services contribute more than 87% to the overall EBITDA. The improvement in the margin profile will get more apparent as we scale up the growth and innovation services segments.  The strategy of enhancing utilisation of underlying infrastructure through collaborative partnerships globally is winning us stickier engagements with large enterprises. We are focused on cost discipline and productivity gains thus ensuring that the transformation in business profile also generates meaningful impact on the bottom-line in future.”

 
 

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