IFRS Press Release
Infosys Technologies (NASDAQ: INFY) Announces Results for the Quarter ended December 31, 2008
Q3 revenues grew by 8.0% year on year; constant currency 14.6%
Q3 revenues sequentially declined by 3.7%; in constant currency grew by 1.0%
Bangalore, India – January 13, 2009
Highlights
Consolidated results for the quarter ended December 31, 2008
- Third quarter revenues at $ 1,171 million, up 8.0% from the corresponding quarter last fiscal; in constant currency 14.6%
- Earnings per American Depositary Share* (ADS) increased to $ 0.58 from $ 0.55 in the corresponding quarter last fiscal; YoY growth was 5.5%
- 30 new clients were added during the quarter by Infosys and its subsidiaries
- Gross addition of 5,997 employees (net 2,772) for the quarter by Infosys and its subsidiaries
- 103,078 employees as on December 31, 2008 for Infosys and its subsidiaries
*The tax provision for quarters ended December 31, 2008 and December 31, 2007 includes a net tax reversal of $ 12 million and $ 13 million respectively. Excluding this reversal, the earnings per share for the quarters ended December 31, 2008 and December 31, 2007 would have been $ 0.56 and $ 0.53 respectively, resulting in a YOY growth of 5.7%.
“In a challenging environment, our focus is on creating value for clients, running an optimized business, and evolving our business model that will allow us to emerge stronger when the global economy starts recovering,” said S. Gopalakrishnan, CEO and Managing Director.
Business outlook
The company’s outlook (consolidated) for the quarter ending March 31, 2009 and for the fiscal year ending March 31, 2009, under International Financial Reporting Standards (IFRS), is as follows:
Outlook under IFRS#
Quarter ending March 31, 2009
- Consolidated revenues are expected to be in the range of $ 1,128 million and $ 1,170 million; YoY decline of 1.2% to growth of 2.5%; in constant currency, growth of 4.7% – 8.6%
- Consolidated earnings per American Depositary Share are expected to be $ 0.55; same as last year@
Fiscal year ending March 31, 2009
- Consolidated revenues are expected to be in the range of $ 4.67 billion and $ 4.71 billion; YoY growth of 11.8% – 12.8%; in constant currency 15.6% – 17.6%
- Consolidated earnings per American Depositary Share@@ are expected to be $ 2.23; YoY growth of 9.9%
# Exchange rates considered for major global currencies: AUD / USD 0.69; GBP / USD 1.45; Euro / USD 1.41
@ Including tax reversal pertaining to earlier period of $ 5 million for the quarter ended March 31, 2008. Excluding the tax reversal, the YOY growth is expected to be 1.8%
@@ Including net tax reversal pertaining to earlier periods of $ 19 million in fiscal 2009 and $ 30 million in fiscal 2008 respectively. Excluding the tax reversal, the earnings per share is expected to be $ 2.20 for the year ending March 31, 2009; YoY growth of 11.1%
Expansion of services and significant projects
Infosys is increasingly focusing on value-based pricing models for its offerings. After the successful launch of our retail solution ShoppingTrip360, Infosys partnered with Bharti Airtel to provide a superior experience to customers of its Direct-To-Home TV service through Infosys’ Digital Convergence Platform.
Banking and Capital Markets continue to provide us significant projects. A leading bank engaged Infosys in multiple projects including customization of services, running targeted advertisement campaigns to improve cross-sell rates, and streamlining the company’s online product application process. A credit rating agency engaged Infosys to implement and support its CRM to analyze campaigns and segment its customers better. Infosys partnered with a financial information firm to accelerate its product innovation cycle. A financial services firm sought Infosys’ expertise for a multi-year governance, risk and compliance implementation program.
Customers across industries continue to repose trust in Infosys to improve their businesses and operations. An energy major sought Infosys’ help to transform its IT shared services organization supporting its oil, gas and power businesses across Europe, America, and Asia. A manufacturing firm chose Infosys to support its global sales and distribution SAP platform. An aircraft company engaged Infosys in software acceptance testing and quality measurements of its applications. An auto financial services firm consulted Infosys for setting up its Business Process Outsourcing office. A firm in the document management industry partnered with Infosys to address the performance and scalability of its data warehousing systems. Infosys' performance engineering services will address performance prediction, capacity planning, performance engineering and a governance framework for performance management. A high tech major engaged Infosys to implement a complex identity and access mana gement platform.
Clients sought our engineering services. An aero-structures company engaged Infosys to design, develop and analyze aircraft structures. For an aerospace company, we are developing fuselage structures and for another, we are engineering aircraft structure, systems, interiors and wiring harness.
We continue to make inroads into new markets. Infosys will manage the transition of applications for an insurance and banking company that is restructuring its core systems to improve overall efficiency. A bank engaged Infosys to implement Microsoft CRM. A Middle Eastern company consulted Infosys to set up the business process of its insurance division which includes developing the company’s business requirements, detailed process maps, and planning for business analysis.
“Our robust and flexible operating and financial models position us well in the current uncertain economic environment,” said V. Balakrishnan, Chief Financial Officer. “Our operating margins during the quarter increased primarily due to depreciation of rupee which was to some extent offset by the depreciation of other major currencies against the US dollar.”
About Infosys Technologies Ltd.
Infosys (NASDAQ: INFY) defines, designs and delivers IT-enabled business solutions that help Global 2000 companies win in a Flat World. These solutions focus on providing strategic differentiation and operational superiority to clients. With Infosys, clients are assured of a transparent business partner, world-class processes, speed of execution and the power to stretch their IT budget by leveraging the Global Delivery Model that Infosys pioneered. Infosys has over 103,000 employees in over 50 offices worldwide. Infosys is part of the NASDAQ-100 Index and The Global Dow. For more information, visit www.infosys.com.
Safe Harbor
Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisi tions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2008 and on Form 6-K for the quarters ended June 30, 2008 and September 30,2008. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company.
Contact
Investor Relations | Shekar Narayanan, India | Sandeep Mahindroo, USA |
Media Relations | Bani Paintal Dhawan, India | Peter McLaughlin, USA |
Unaudited Condensed Financial Statements in compliance with International Financial Reporting Standards (IFRS) for the nine months ended December 31, 2008
Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Balance Sheets
| As of | |
| December 31, 2008 | March 31, 2008 |
ASSETS |
|
|
Current Assets |
|
|
Cash and cash equivalents | $1,948 | $2,058 |
Available-for-sale financial assets | – | 18 |
Investments in certificates of deposit | 41 | – |
Trade receivables | 721 | 824 |
Unbilled revenue | 164 | 120 |
Prepayments and other assets | 77 | 107 |
Total current assets | $2,951 | 3,127 |
Non-current assets |
|
|
Property, plant and equipment | 938 | 1,022 |
Goodwill | 142 | 174 |
Intangible assets | 9 | 11 |
Deferred income tax assets | 89 | 73 |
Income tax assets | 38 | 55 |
Other non-current assets | 49 | 45 |
Total non-current assets | 1,265 | 1,380 |
Total assets | $4,216 | $4,507 |
LIABILITIES AND EQUITY |
|
|
Current Liabilities |
|
|
Trade payables | $3 | $12 |
Derivative financial instruments | 43 | 29 |
Current income tax liabilities | 117 | 101 |
Client deposits | 5 | 1 |
Unearned revenue | 87 | 71 |
Employee benefit obligations | 14 | 35 |
Provisions | 15 | 13 |
Other current liabilities | 274 | 300 |
Total current liabilities | 558 | 562 |
Non-current liabilities |
|
|
Non-current liabilities | 54 | 29 |
Total liabilities | 612 | 591 |
Equity |
|
|
Share capital-Rs. 5 ($ 0.16) par value 600,000,000 equity shares authorized, issued and outstanding 572,641,503 and 571,995,758 as of December 31, 2008 and March 31, 2008, respectively | 64 | 64 |
Share premium | 666 | 655 |
Retained earnings | 3,297 | 2,896 |
Other components of equity | (423) | 301 |
Total equity | 3,604 | 3,916 |
Total liabilities and equity | $4,216 | $4,507 |
Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Income Statements
| Three months ended December 31, | Nine months ended December 31, | Year ended March 31, | ||
| 2008 | 2007 | 2008 | 2007 | 2008 |
Revenues | $1,171 | $1,084 | $3,542 | $3,034 | $4,176 |
| Cost of sales | 661 | 629 | 2,049 | 1,789 | 2,453 |
Gross profit | 510 | 455 | 1,493 | 1,245 | 1,723 |
Operating Expenses: |
|
|
|
|
|
Selling and marketing expenses | 55 | 52 | 184 | 174 | 230 |
Administrative expenses | 82 | 89 | 265 | 243 | 334 |
Total operating expenses | 137 | 141 | 449 | 417 | 564 |
Operating profit | 373 | 314 | 1,044 | 828 | 1,159 |
Other income (expense) | (39) | (3) | (85) | 15 | 4 |
Finance income | 46 | 43 | 135 | 125 | 171 |
Profit before income taxes | 380 | 354 | 1,094 | 968 | 1,334 |
Income tax expense | 48 | 42 | 134 | 118 | 171 |
Profit after tax | $332 | $312 | $960 | $850 | $1,163 |
Attributable to: |
|
|
|
|
|
Minority interest | – | – | –- | – | – |
Equity holders | 332 | 312 | 960 | 850 | 1,163 |
Net profit | $332 | $312 | $960 | $850 | $1,163 |
Earnings per equity share |
|
|
|
|
|
Basic ($) | 0.58 | 0.55 | 1.69 | 1.49 | 2.04 |
Diluted ($) | 0.58 | 0.55 | 1.68 | 1.49 | 2.04 |
Weighted average equity shares used in computing earnings per equity share |
|
|
|
|
|
Basic | 569,755,757 | 568,512,968 | 569,571,267 | 568,421,831 | 568,564,740 |
Diluted | 570,449,069 | 570,452,274 | 570,650,033 | 570,376,939 | 570,473,287 |
Unaudited U.S.GAAP Financial Statements for the nine months ended December 31, 2008
Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Balance Sheets
| As of | |
| March 31, 2008 | December 31, 2008 |
| (1) |
|
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents | $2,058 | $1,948 |
Investments in liquid mutual fund units | 18 | – |
Investments in certificates of deposit | – | 41 |
Trade accounts receivable, net of allowances | 824 | 721 |
Unbilled revenue | 120 | 164 |
Prepaid expenses and other current assets | 107 | 77 |
Deferred tax assets | 2 | 5 |
Total current assets | 3,129 | 2,956 |
Property, plant and equipment, net | 1,022 | 938 |
Goodwill | 150 | 122 |
Intangible assets, net | 25 | 17 |
Deferred tax assets | 66 | 79 |
Advance income taxes | 55 | 38 |
Other assets | 45 | 49 |
Total assets | $4,492 | $4,199 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
Current liabilities |
|
|
Accounts payable | $12 | $3 |
Income taxes payable | 101 | 117 |
Client deposits | 1 | 5 |
Unearned revenue | 71 | 87 |
Other current liabilities | 386 | 383 |
Total current liabilities | 571 | 595 |
Non-current liabilities |
|
|
Other non-current liabilities | 11 | 11 |
Stockholders’ equity |
|
|
Common stock, Rs. 5 ($ 0.16) par value 600,000,000 equity shares authorized, issued and outstanding 571,995,758 and 572,641,503 as of March 31, 2008 and December 31, 2008, respectively | 64 | 64 |
Additional paid-in capital | 718 | 730 |
Accumulated other comprehensive income | 311 | (413) |
Retained earnings | 2,817 | 3,212 |
Total stockholders’ equity | 3,910 | 3,593 |
Total liabilities and stockholders’ equity | $4,492 | $4,199 |
Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Statements of Income
| Three months ended December 31, | Nine months ended December 31, | ||
| 2007 | 2008 | 2007 | 2008 |
Revenues | $1,084 | $1,171 | $3,034 | $3,542 |
Cost of revenues | 629 | 661 | 1,789 | 2,048 |
Gross profit | 455 | 510 | 1,245 | 1,494 |
Operating Expenses: |
|
|
|
|
Selling and marketing expenses | 52 | 55 | 174 | 184 |
General and administrative expenses | 89 | 82 | 243 | 265 |
Amortization of intangible assets | 2 | 2 | 6 | 7 |
Total operating expenses | 143 | 139 | 423 | 456 |
Operating income | 312 | 371 | 822 | 1,038 |
Other income, net | 40 | 7 | 140 | 50 |
Income before income taxes | 352 | 378 | 962 | 1,088 |
Provision for income taxes | 42 | 48 | 118 | 134 |
Net income | $310 | $330 | $ 844 | $954 |
Earnings per equity share |
|
|
|
|
Basic | $0.54 | $0.58 | $1.49 | $1.68 |
Diluted | $0.54 | $0.58 | $ 1.48 | $1.67 |
Weighted average equity shares used in computing earnings per equity share |
|
|
|
|
Basic | 568,512,968 | 569,755,757 | 568,421,831 | 569,571,267 |
Diluted | 570,363,129 | 570,082,857 | 570,439,766 | 570,341,551 |