Bangalore, India and East Brunswick, New Jersey, USA – January 17, 2014 -- Wipro Limited (NYSE:WIT) today announced financial results under International Financial Reporting Standards (IFRS) for its third quarter ended December 31, 2013.
Highlights of the Results:
Results for the Quarter ended December 31, 2013:
- Revenues from continuing operations were `113.3 billion ($1.8 billion1), an increase of 18% YoY.
- Net Income from continuing operations was `20.1 billion ($325 million1), an increase of 27% YoY which includes a non-recurring expense incurred due to the cessation of manufacturing Wipro branded desktop, laptops and servers. Excluding the non-recurring expense, Net Income from continuing operations was `20.3 billion ($328 million1), an increase of 28% YoY
- Non-GAAP Adjusted Net Income from continuing operations was `20.1 billion ($325 million1), an increase of 27% YoY.
- IT Services Revenue was $1,678.4 million, a sequential increase of 2.9% and YoY increase of 6.4%.
- IT Services Revenues in Rupee terms was `103.3 billion ($1,668 million1), an increase of 20% YoY.
- IT Services Earnings Before Interest and Tax (EBIT) was `23.8 billion ($384 million1), an increase of 33% YoY.
- Operating Income to Revenue for IT Services was 23% for the quarter.
- The Opus CMC acquisition (announced in December 2013) was completed in January 2014, upon completion of customary closing conditions. Opus CMC’s revenue for calendar year 2013, prior to the closing of the acquisition, was approximately $ 43 million.
- Wipro declared an interim dividend of `3 ($0.051) per share /ADS.
Performance for the quarter ended December 31, 2013
Azim Premji, Chairman of Wipro, commenting on the results said, “As the global economy is progressing towards stability, we see optimism amongst clients, especially in the West. Corporations are leveraging technology to reduce operational costs and investing resources in differentiating themselves in the marketplace.”
- 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 December 31, 2013, for cable transfers in Indian rupees, as certified by the Federal Reserve Board of New York, which was US $1= `61.92. However, the realized exchange rate in our IT Services business segment for the quarter ended December 31, 2013 was US$1= `61.53 T K Kurien, Executive Director & Chief Executive Officer of Wipro, said, “Our focus on account management has yielded encouraging results. We continue to execute to our strategy for superior engagement with clients while investing in emerging technologies to drive towards a higher growth trajectory. During the quarter, our Global Infrastructure Services business grew strongly on revenues.”
Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said – “Our strategy of ‘standardization at the core’ is yielding results. Our investments in automation and productivity tools have driven efficiencies and helped us expand margins of IT Services by 54 basis points to 23%.”
Outlook for the Quarter ending March 31, 2014
We expect Revenues from our IT Services business to be in the range of $ 1,712 million to $1,745
million* including the revenues from our acquisition.
* Guidance is based on the following exchange rates: GBP/USD at 1.63, Euro/USD at 1.37, AUD/USD at 0.92, USD/INR at 62.0
The IT Services segment had 146,402 employees as of December 31, 2013. We added 42 new customers for the quarter.
A leading integrated construction and support services company has selected Wipro as its sole preferred global strategic partner to provide integrated IT and BPO services. As part of the multi-year relationship, Wipro will deliver operational and cost efficiency through its outsourcing services and partner with the customer in business and technology transformation initiatives.
One of the world’s largest consumer goods companies has renewed its infrastructure services contract with Wipro. Wipro will provide Network, Datacenter, Global Service Desk and Security Services in a managed services model and partner to transform their IT landscape.
One of the largest banks in Africa has extended its existing relationship with Wipro for an additional 3 years. This renewed engagement is a validation of the value that Wipro is bringing to the bank’s ‘transformation journey’ in its capacity as an Enterprise Testing Partner.
A large global universal bank has selected Wipro as one of its strategic partners to provide application development, maintenance and testing services.
Wipro won a deal from a non-profit research institution in the Kingdom of Saudi Arabia to provide IT infrastructure and applications management services. Wipro has been chosen by a leading hospital group in Saudi Arabia to provide end-to-end IT Infrastructure services.
Awards and accolades
Wipro has been recognized by Amazon Web Services as an AWS Partner Network (APN) Premier Consulting Partner for 2014, marking the second year in a row that the Company has achieved this designation. Wipro Life Sciences has been positioned as a ‘Leader’ in the IDC MarketScape: Worldwide Life Science Manufacturing & Supply Chain ITO 2013 Vendor Assessment (doc #HI244265, November 2013), being recognized for its account management capabilities. Wipro Healthcare and Life sciences continues to leverage its strengths in differentiated domain offerings - patient centricity and compliance through sales and marketing analytics, business intelligence and master data management.
Wipro was named as a leader in the India 200 Climate Disclosure Leadership Index (CDLI), for the second time in a row. Wipro continues to retain the top position with a disclosure score of 98/100. The average disclosure score of Indian companies is 68.
Wipro was named a "Leader" by technology global research and advisory firm Forrester Research Inc. in its report "The Forrester Wave™: Business Intelligence Service Providers in Asia Pacific, Q4 2013". Forrester Research Inc. evaluated leading Business Intelligence (BI) Services providers across 53 criteria relating to current offering, strategy and market presence based on client inquiries, user needs assessments, and vendor and expert interviews. It identified Wipro as a leader in Business Intelligence Services for Asia Pacific-based organizations.
Wipro received the ‘2013 ESCAP-Sasakawa Award for Disability-Inclusive Business in Asia and the Pacific’ in the category ‘Disability-Inclusive Multinational Enterprise’.
- Our IT Products segment delivered Revenue of `10.2 billion ($164 million1) for the quarter, a YoY increase of 2%.
- EBIT was negative `116 million (negative $2 million1) for the quarter. The operating income of IT Products segment for the quarter includes non-recurring expense of `209 ($3 million1) incurred due to cessation of manufacturing of Wipro branded desktops, laptops and servers. Operating income of the IT Products segment excluding the above non-recurring expense is `93 million ($1.5 million1).
Please see the table on page 8 for a reconciliation between (i) IFRS Net Income and non-GAAP Adjusted Net Income (excluding the impact of stock-based compensation) and (ii) 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 8 provides Adjusted Net Income for the period, which is a non-GAAP measure that excludes the impact of accelerated amortization in respect of stock options that vest in a graded manner, and 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 consider a stock option award with a graded vesting schedule to be in substance a single award and not multiple stock option awards and accordingly believe the straight line amortization reflects the economic substance of the award. 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. We believe that the presentation of this Non-GAAP Adjusted Net Income, when shown in conjunction with the corresponding IFRS measure, provides useful information to investors and management regarding financial and business trends relating to its Net Income for the period.
These Non-GAAP financial measures are 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 these non-GAAP measures, 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.
For internal budgeting process, our management also uses financial statements that exclude the impact of accelerated amortization relating to stock options that vest in a graded manner. Management of the Company also uses Non-GAAP Adjusted Net Income, in addition to the corresponding IFRS measure, in reviewing our financial results.
Results for the quarter ended December 31, 2013, computed under IFRS, along with individual business segment reports, are available in the Investors section of our website at www.wipro.com.
Quarterly Conference Call
We will hold a conference call today at 06:45 p.m. Indian Standard Time (08:15 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 (NYSE: WIT)
Wipro provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, IT enabled services, package implementation, software application development and maintenance, and research and development services to corporations globally. Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally.
For more information, please visit our websites at www.wipro.com.
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Aravind V S
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