Wipro Limited: Results for the Quarter and Year Ended March 31, 2015 Under IFRS
Tuesday, April 21, 2015 12:37:00 PM ET
Wipro Limited (WIT ) today announced financial results under International Financial Reporting Standards (IFRS) for its fourth quarter and year ended March 31, 2015.
Highlights of the Results
Results for the Year ended March 31, 2015:
-- Total Revenues were Rupees 469.5 billion ($7.5 billion1), an increase of 8% YoY.
-- Net Income2 was Rupees 86.5 billion ($1.4 billion1), an increase of 11% YoY.
-- Wipro declared a final dividend of Rupees 7 ($0.11) per share/ADS, taking the total dividend declared for the year 2014-15 to Rupees 12 ($0.19) per share/ADS.
-- IT Services Revenue was $7,081.6 million, a YoY increase of 7.0%.
-- Non-GAAP Constant Currency IT Services Revenue in dollar terms grew 8.7% to $7,190.6 million.
-- IT Services Segment Revenues in Rupee terms was Rupees 440.2 billion ($7.1 billion1), an increase of 10% YoY.
-- IT Services Segment Result was Rupees 97.6 billion ($1.6 billion1), an increase of 8% YoY.
-- IT Services Margins for the year was 22.2%.
Results for the Quarter ended March 31, 2015:
-- Total Revenues were Rupees 121.4 billion ($1.9 billion1), an increase of 4% YoY.
-- Net Income2 was Rupees 22.7 billion ($366 million1), an increase of 2% YoY.
-- Non-GAAP constant currency IT Services Revenue in dollar terms grew 1.2% to $1,817.8 million, within our guidance range of $1,814 million to $1,850 million.
-- IT Services Revenue was $1,774.5 million, a sequential decrease of 1.2% and YoY increase of 3.2%.
-- IT Services Segment Revenues in Rupee terms was Rupees 112.4 billion ($1.8 billion1), an increase of 6% YoY.
-- IT Services Segment Result was Rupees 24.8 billion ($398 million1), a decrease of 5% YoY.
-- IT Services Margins was 22.0%, an expansion of 23 bps sequentially.
Performance for the quarter and year ended March 31, 2015
T K Kurien, Member of the Board & Chief Executive Officer of Wipro, said, "We continue to execute on our strategy and have achieved improved customer satisfaction through better articulated solutions and improved delivery. We are well-positioned to take advantage of the opportunities in the market, while tackling headwinds in certain areas. We see Digital, Open Source and Artificial Intelligence as key levers for driving business change and reshaping the delivery model for the future."
Jatin Dalal, Chief Financial Officer of Wipro, said - "We continue to maintain our focus on operational improvements and productivity enhancements. This has resulted in margin expansion despite adverse cross-currency movements."
Outlook for the Quarter ending June 30, 2015
We expect Revenues from our IT Services business to be in the range of $ 1,765 million to $ 1,793 million*.
* Guidance is based on the following exchange rates: GBP/USD at 1.49, Euro/USD at 1.07, AUD/USD at 0.77, USD/INR at 62.10 and USD/CAD at 1.27
The IT Services segment had a headcount of 158,217 as of March 31, 2015. We added 65 new customers during the quarter.
Wipro continued its momentum in winning Large Deals globally as listed below:
Wipro Limited has won a multi-year engagement with Allied Irish Bank in Ireland for managing their core datacenter infrastructure. The engagement includes end-to-end management of mainframe and distributed systems and will enable the bank to provide high availability services to its end customers. Wipro is setting up its ServiceNXT(TM) Delivery Center in Dublin to cater to the near-shore requirements of this program and also add to its existing portfolio of global delivery centers.
Wipro has signed a five-year agreement with Symetra Life Insurance Company, a leader in retirement benefits and life products, to provide a range of IT Infrastructure services. Wipros services will include hosting and servicing of mainframe and server environments, service desk and other technologies at the companys data centers.
A leading global apparel and footwear company has engaged Wipro to transform their End User Services, Network and Distributed Computing platforms in addition to expanding their IT applications portfolio. As the customer organization grows its lifestyle brands, this strategic initiative will be the global backbone for operational excellence with a high degree of automation, real-time analytics, self-help and self-heal.
Wipro has won an integrated Applications and Infrastructure deal with T-Mobile Polska S.A. In this strategic partnership spanning 5 years, Wipro would help T-Mobile systemize and standardize the IT architecture and operations of their Poland entity.
Wipro has been chosen as the engineering partner by a leading global technology company for establishing a shared services team, to support testing and maintenance of its core platform products. As part of this multi-year engagement, Wipro will leverage its product engineering capabilities to bring about process agility, faster delivery, enhanced quality and year-on-year efficiency gains for the customer.
A global manufacturing major has engaged Wipro in a multi-year and multi-million dollar workplace transformation and support program. As part of this engagement, Wipro will leverage its workplace transformation framework and automation tools to help enhance end-user experience and productivity for the manufacturing company.
Wipros Cloud business continued to build significant momentum in the applications and infrastructure areas. We have expanded our cloud applications business into new geographies with deal wins that include a leading Australian banking and insurance provider and a leading energy provider in Canada. Wipros ServiceNXT(TM) Cloud Operations Center has been selected for hosting and providing managed services for affiliate/partner applications by a global cigarette and tobacco company and for customer care and billing platform of a global telecom company. Wipro has also been selected as a strategic Cloud partner for the assessment and migration of 3000+ web-based applications for a large US-based multinational bank.
Wipros Open Source practice continued to gain traction with customers in the areas of Middleware, Cloud, Analytics, Big Data, API (Application Program Interface) and Operating Systems across industries. Some marquee wins in Q4 include building treasury, budgeting, financial operations and MIS systems for a government organization, middleware integration for a global retail giant and migration of applications from a proprietary platform to an Open Source application server for a global investment bank.
Awards and accolades
Wipro was positioned in the Winners Circle of the HfS Blueprint Report on Enterprise Analytics Services 2015. Wipros Vertical expertise, Big Data Analytics capabilities and collaborative approach with clients, have been called out as key areas of strength in the report.
Wipro has been positioned amongst Leaders by Everest Group in their PEAK MatrixTM assessment 2015 on Record-to-Report (R2R) BPO Service provider within Finance & Accounting Outsourcing. This report examines multiple aspects of the R2R BPO market. It focuses on each service providers position on the Everest Group Performance, Experience, Ability and Knowledge (PEAK) Matrix while assessing their capabilities on the dimensions of market success, scale, scope, delivery capability, technology solution, and buyer satisfaction. The report also encompasses analysis of R2R BPO landscape and key solution characteristics.
Wipro was recognized by the Ethisphere Institute, as a 2015 Worlds Most Ethical Company? for the fourth consecutive year. The Worlds Most Ethical Companies designation recognizes those organizations that have had a material impact on the way business is operated. Wipro is one of only three companies in the Information Technology Services industry honored this year.
-- Our IT Products Segment delivered Revenue of Rupees 9.5 billion ($152 million1) for the quarter ended March 31, 2015, a sequential growth of 22%.
-- IT Products Segment results for the quarter ended March 31, 2015 was Rupees 58 million ($1 million1).
-- Revenue for the year ended March 31, 2015 was Rupees 34.0 billion ($546 million1) a degrowth of 12% YoY.
-- Segment Results for the year ended March 31, 2015 was Rupees 374 million ($6 million1).
-- IT Products Revenues for the fiscal year ended March 31, 2014 included sales of Wipro branded desktops, laptops and servers which Wipro ceased manufacturing in the quarter ended December 31, 2013.
Please refer the table on page 7 for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.
About Non-GAAP financial measures
This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.
The table on page 7 provides IT Services Revenue on a constant currency basis, which is a non-GAAP measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance.
This non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS, and may be different from non-GAAP measures used by other companies. In addition to this non-GAAP measure, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.
Results for the quarter and year ended March 31, 2015, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com.
Quarterly Conference Call
We will hold an earnings conference call today at 07:15 p.m. Indian Standard Time (09:45 a.m. US Eastern Time) to discuss our performance for the quarter. An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com.
About Wipro Limited (WIT )
Wipro Ltd. (WIT ) is a leading Information Technology, Consulting and Business Process Services company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of "Business through Technology" - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioners approach to delivering innovation, and an organization wide commitment to sustainability, Wipro has a workforce of over 150,000, serving clients in 175+ cities across 6 continents.
For more information, please visit www.wipro.com
Contact for Investor Relations Contact for Media & Press
Aravind V S Vaibhav Saha Vipin Nair
Phone: +91-80-2505 6186 Phone:+1 732-509-1362 Phone: +91-80-3991-6154
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The forward-looking statements contained herein represent Wipros beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipros control. Such statements include, but are not limited to, statements regarding Wipros growth prospects, its future financial operating results, and its plans, expectations and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, intense competition in IT services, our ability to maintain 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, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property, and general economic conditions affecting our business and industry. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the companys filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.
1 For the convenience of the reader, the amounts in Indian Rupees in this release have been translated into United States Dollars at the noon buying rate in New York City on March 31, 2015, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1= Rupees 62.31. However, the realized exchange rate in our IT Services business segment for the quarter ended March 31, 2015 was US$1= Rupees 63.35
2 Refers to Profit for the period attributable to equity holders of the company
Wipro limited and subsidiaries
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
(Rupees in millions, except share and per share data, unless otherwise stated)
As of March 31, As of March 31,
2014 2015 2015
translation into US
dollar in millions
(unaudited) Refer Note
Goodwill 63,422 68,078 1,093
Intangible assets 1,936 7,931 127
Property, plant and equipment 51,449 54,206 870
Derivative assets 286 736 12
Available for sale investments 2,676 3,867 62
Non-current tax assets 10,192 11,409 183
Deferred tax assets 3,362 2,945 47
Other non-current assets 14,295 14,369 231
Total non-current assets 147,618 163,541 2,625
Inventories 2,293 4,849 78
Trade receivables 85,392 91,531 1,469
Other current assets 39,474 73,359 1,177
Unbilled revenues 39,334 42,338 679
Available for sale investments 60,557 53,908 865
Current tax assets 9,774 6,490 104
Derivative assets 3,661 5,077 81
Cash and cash equivalents 114,201 158,940 2,551
Total current assets 354,686 436,492 7,004
TOTAL ASSETS 502,304 600,033 9,629
Share capital 4,932 4,937 79
Share premium 12,664 14,031 225
Retained earnings 314,952 372,248 5,974
Share based payment reserve 1,021 1,312 21
Other components of equity 10,472 15,454 248
Shares held by controlled trust (542) - -
Equity attributable to the equity holders of the company 343,499 407,982 6,547
Non-controlling interest 1,387 1,646 26
Total equity 344,886 409,628 6,573
Long - term loans and borrowings 10,909 12,707 204
Deferred tax liabilities 1,796 3,240 52
Derivative liabilities 629 71 1
Non-current tax liability 3,448 6,695 107
Other non-current liabilities 4,478 3,658 59
Provisions 6 5 -
Total non-current liabilities 21,266 26,376 423
Loans and borrowings and bank overdrafts 40,683 66,206 1,063
Trade payables and accrued expenses 51,917 58,745 945
Unearned revenues 12,767 16,549 264
Current tax liabilities 12,482 8,036 129
Derivative liabilities 2,504 753 12
Other current liabilities 14,429 12,223 196
Provisions 1,370 1,517 24
Total current liabilities 136,152 164,029 2,633
TOTAL LIABILITIES 157,418 190,405 3,056
TOTAL EQUITY AND LIABILITIES 502,304 600,033 9,629
Wipro limited and subsidiaries
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME
(Rupees in millions, except share and per share data, unless otherwise stated)
Three Months ended March 31, Year ended March 31,
2014 2015 2015 2014 2015 2015
Convenience translation into US dollar in millions (unaudited) Convenience translation into US dollar in millions (unaudited)
Gross revenues 116,535 121,420 1,949 434,269 469,545 7,536
Cost of revenues (77,700) (82,609) (1,326) (295,488) (321,284) (5,156)
Gross profit 38,835 38,811 623 138,781 148,261 2,380
Selling and marketing expenses (7,025) (7,916) (127) (29,248) (30,625) (491)
General and administrative expenses (6,510) (6,633) (106) (23,538) (25,850) (415)
Foreign exchange gains/(losses), net 510 294 5 3,359 3,637 58
Results from operating activities 25,810 24,556 395 89,354 95,423 1,532
Finance expenses (842) (912) (15) (2,891) (3,599) (58)
Finance and other income 3,959 5,476 88 14,542 19,859 319
Profit before tax 28,927 29,120 468 101,005 111,683 1,793
Income tax expense (6,536) (6,255) (100) (22,600) (24,624) (395)
Profit for the period 22,391 22,865 368 78,405 87,059 1,398
Equity holders of the company 22,265 22,720 366 77,967 86,528 1,389
Non-controlling interest 126 145 2 438 531 9
Profit for the period 22,391 22,865 368 78,405 87,059 1,398
Earnings per equity share:
Attributable to equity share holders of the company
Basic 9.07 9.25 0.15 31.76 35.25 0.57
Diluted 9.04 9.21 0.15 31.66 35.13 0.56
Weighted average number of equity shares used in
computing earnings per equity share
Basic 2,455,543,231 2,456,575,761 2,456,575,761 2,454,745,434 2,454,681,650 2,454,681,650
Diluted 2,462,876,367 2,465,876,236 2,465,876,236 2,462,626,739 2,462,579,161 2,462,579,161
IT Services Business Units
BFSI 28,468 29,852 479 106,035 115,505 1,854
HLS 11,275 13,171 211 41,130 49,884 801
RCTG 15,412 16,258 261 58,893 62,209 998
ENU 17,173 17,437 280 63,923 71,229 1,143
MFG 19,095 20,582 330 74,423 80,303 1,289
GMT 14,770 15,117 243 55,105 61,050 980
IT SERVICES TOTAL 106,193 112,417 1,804 399,509 440,180 7,064
IT PRODUCTS 11,090 9,454 152 38,785 34,006 546
RECONCILING ITEMS (238) (157) (3) (666) (1,004) (16)
TOTAL 117,045 121,714 1,953 437,628 473,182 7,594
IT Services Business Units
BFSI 7,005 7,474 120 24,153 27,378 439
HLS 2,482 3,031 49 7,637 10,565 170
RCTG 4,048 3,542 57 13,012 13,190 212
ENU 4,887 4,078 65 17,418 17,561 282
MFG 4,909 4,497 72 17,348 17,127 275
GMT 3,332 2,878 46 11,569 13,574 218
OTHERS - - 583 10
UNALLOCATED (609) (723) (12) (804) (2,329) (37)
TOTAL IT SERVICES 26,054 24,777 398 90,333 97,649 1,568
IT PRODUCTS 143 58 1 310 374 6
RECONCILING ITEMS (387) (279) (4) (1,289) (2,600) (42)
TOTAL 25,810 24,556 395 89,354 95,423 1,532
FINANCE EXPENSE (842) (912) (15) (2,891) (3,599) (58)
FINANCE AND OTHER INCOME 3,959 5,476 88 14,542 19,859 319
PROFIT BEFORE TAX 28,927 29,120 468 101,005 111,683 1,793
INCOME TAX EXPENSE (6,536) (6,255) (100) (22,600) (24,624) (395)
PROFIT FOR THE PERIOD 22,391 22,865 368 78,405 87,059 1,398
Segment result represents operating profits of the segments and dividend income and gains or losses (net) relating to strategic investments, which are presented within "Finance and other income" in the statement of Income.
The Company is organized by the following operating segments; IT Services and IT Products.
IT Services: The IT Services segment primarily consists of IT Service offerings to our customers organized by industry verticals as follows: Banking, Financial Services and Insurance (BFSI), Healthcare and Life Sciences (HLS), Retail, Consumer, Transport and Government (RCTG), Energy, Natural Resources and Utilities (ENU), Manufacturing (MFG), Global Media and Telecom (GMT). Starting with quarter ended September 30, 2014, it also includes Others which comprises dividend income and gains or losses (net) relating to strategic investments, which are presented within "Finance and other income" in the statement of Income. Key service offering to customers includes software application development and maintenance, research and development services for hardware and software design, business application services, analytics, consulting, infrastructure outsourcing services and business process services.
The IT Products segment sells a range of Wipro personal desktop computers, Wipro servers and Wipro notebooks. The Company is also a value added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables. During the fiscal year ended March 31, 2014 the Company ceased the manufacturing of Wipro branded desktops, laptops and servers. Revenue relating to the above items is reported as revenue from the sale of IT Products.
Reconciliation of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)
Three Months ended March 31,2015 Year ended March 31, 2015
IT Services Revenue as per IFRS $ 1,775 IT Services Revenue as per IFRS $ 1,775 IT Services Revenue as per IFRS $ 7,082
Effect of Foreign currency exchange movement $ 43 Effect of Foreign currency exchange movement $ 90 Effect of Foreign currency exchange movement $ 109
Non-GAAP Constant Currency IT Services Revenue based on previous quarter exchange rates $ 1,818 Non-GAAP Constant Currency IT Services Revenue based on previous year exchange rates $ 1,865 Non-GAAP Constant Currency IT Services Revenue based on previous year exchange rates $ 7,191
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SOURCE Wipro Limited