Full year: PAT of INR 1,251 Crores; Data services revenue grew by +4.5% YoY;
Consolidated EBITDA increased by +29.5% YoY with margin expansion of 560 Bps
Singapore – April 29th, 2021: Tata Communications today announces its financial results for the quarter ended December 31st, 2020.
1. Highlights | FY2021
- Consolidated revenue was at INR 17,100 Crore (USD 2,303 Mn); up by +0.2% YoY. Business environment has been impacted due to pandemic and this has also affected our growth.
- Data revenue was at INR 14,309 Crore (USD 1,927 Mn); up by +4.5% YoY supported by a healthy performance in Traditional services.
- Consolidated EBITDA came in at INR 4,261 crore (USD 574 Mn); up +29.5% YoY as a result of strong focus on right operating structure and cost efficiencies.
- Profit for the year was at INR 1,251 Crore (USD 168 Mn) as compared to a loss of INR 86 Crore in FY20 due to strong operating performance during the year. This has been the highest profit in last 11 years, translating into an EPS of INR 44 per share.
- Strong cash flow generation has helped bring debt at comfortable levels. Net Debt to EBITDA is now at 1.8x as compared to 2.8x a year earlier. Net Debt is now at INR 7,786 crore.
- Return on Capital Employed for FY21 is at 24.6% as compared to 11.5% in FY20; and improvement of over 13 percentage points.
- The Board recommends a dividend of INR 14 per share.
2. Highlights | Q4 FY2021
- Consolidated revenue was at INR 4,073 Crore (USD 559 Mn), decrease of -7.4% YoY. This has been largely due to degrowth in Voice business and Data business.
- Data revenue was at INR 3,515 Crore (USD 482 Mn); down by -2.2% This reduction is primarily due to longer deal conversion and execution cycle due to COVID-19 and moderation of UCC traffic.
- We maintained profitability despite slower revenue growth, EBITDA at INR 1,015 Crore (USD 139 Mn); up +16.8% YoY, EBITDA margin at 24.9%.W
- Profit at INR 299 Crore as compared to a loss of INR 275 Crore in same quarter last year.
A.S Lakshminarayanan, MD and CEO, Tata Communications said, “FY21 has been a great year; making excellent progress on our well-defined strategy. Execution on financial fitness is yielding good results and the shifts from products to platforms, deeper customer engagements are a work in progress and we anticipate continued progress on these strategic levers to achieve our goals. Our teams have gone the extra mile in delivering benchmark level Net Promoter Score (NPS) in a difficult year and are committed on execution to deliver on our strategy.”
Commenting on the results, Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications, said, “Our focus on right operating structure and cost efficiencies have started to show results during the year. There has been significant improvement in profitability making our business fit to compete effectively. Profit and cash flow generation has improved dramatically. We now have a stronger balance sheet providing us the flexibility to invest for future growth of business.”
An investor fact sheet providing detailed analysis of the results for the quarter ended March 31st, 2021 has been uploaded on the Tata Communications website and can be accessed here.
3. Business highlights | FY2021
- One of the largest government-owned banks of India, has expanded its relationship with Tata Communications to strengthen its customers’ trust and scale up the bank’s capabilities to protect its customers assets ensuring the integrity of sensitive data from cyberattacks. Tata Communications will extend the bank’s current portfolio of Security Operations Center (SoC) services, along with increasing the number of on-site SoC teams to support the incremental requirement. Users of the bank’s service will benefit from reduced downtimes, making them more reliable and available for their customers 24X7. The effectiveness of the security controls are enhanced by our continuous monitoring which reduces cyber-risks and real-time tracking using our centralised reporting and dashboard. This also leads to operational and cost efficiencies for the bank. The enhanced services will support the bank build a stronger security posture while scaling up its adoption of advanced digital technologies, giving its customers a more secure and seamless banking experience.
- An integrated container logistics company and global leader in shipping services have selected Tata Communications to enhance its customer engagement experience. The solution will enable their inbound and outbound customer communications in over 200 locations across 109 countries on an integrated global platform. The service offers a user-friendly, cloud-based capability and makes it easy for customers and agents to interact at any time, from anywhere. The Tata Communications solution combines our Global SIP Connect service with the Cisco WebEx Cloud Contact Centre. The solution brings the ecosystems together for a seamless user experience. Merging disparate systems into one globally consistent service platform is helping drive improved IT operational efficiencies and increased customer agent productivity. The model will result in significant cost savings for them in the next five years. This solution will significantly impact their digital transformation journey and strengthen their position as a global integrator of logistics while delivering a seamless experience for their customers.
- One of Asia’s leading multinational automotive manufacturing companies, has selected Tata Communications to provide end-to-end connectivity for their connected tractor use case, offering a cloud-based Intelligent Connected Vehicle platform for a multi-country launch. They will be able to enhance the productivity of farmers who use their tractors by remotely and on a real-time basis sharing with them vital information such as, climatic conditions, precision farming, driver’s information and vehicle’s health, using Tata Communications MOVETM Automotive solution. This solution will help the company step away from the traditional physical SIM card and replace it with embedded connectivity across their countries of launch. This will offer a pure multi-network support with true auto-switching capability, ensuring the device in these new tractors always have seamless connectivity on the best available network. The company will be able to successfully execute its multi country rollout through the B2B connectivity platform that we offer. Company’s operations team will also be using our Intelligent Connected Vehicle platform to access information, manage connectivity and generate reports available on the portal.
- One of the leading brand franchise operators in the Middle East, is working with Tata Communications to empower their franchisees to deliver enhanced customer service and brand experiences using our robust, secure and high-performance network. The brand franchisees as well as the company’s employees will be able to access business critical applications hosted over multi-cloud environment in a more secure, efficient, reliable and cost-effective manner using Tata Communications IZOTM Private Connect service. This will enable them to address the high latency and scalability challenges of traditional Internet based solutions by providing a private network connectivity to all cloud service provider platforms, over a highly resilient and robust core network backbone of Tata Communications. The service will provide 100 percent availability and predictability for all their Software as a Service (SaaS) applications, increasing their employee productivity and enhancing the consumer facing apps experience, leading to customer delight.
- Ascend Digital Solutions Limited, a trusted technology and solutions providers for the Government of Ghana – in partnership with Tata Communications Transformation Services (TCTS) – a subsidiary of Tata Communications, have been retained to manage and operate the network infrastructure for the National Information Technology Agency (NITA), the ICT policy implementing arm of the Ministry of Communications of the Republic of Ghana. TCTS, along with Ascend, will assist the Ghana Investment Fund for Electronic Communication (GIFEC), an agency mandated to deliver universal basic telephony access to the unserved and underserved communities, in rolling out Rural Telephony, a project initiated to provide data and voice connectivity to more than 2000 rural sites across 172 districts in 9 regions in Ghana, reaching over 3 million people. This venture will make Internet and basic telephony easily and economically accessible in unconnected communities, ensuring quality coverage and seamless end-user experience across Ghana. From providing farmers with accessibility to market information, to helping the underserved realize the potential of the technology to catalyse economic opportunity, this endeavour will make the recipients more productive members of society. We will leverage our Network Operations Centre (NOC) services to maintain NITA’s network infrastructure across fibre cable, wireless LTE and Data Centre domains, to provide reliable networks to their subscribers. TCTS, in conjunction with Ascend, will provide strategic advice to enterprise customers on business enablement strategies such as product portfolio and more, to facilitate digital transformation through next-generation technologies.”