IBS Group Reports Operating Results for the Quarter Ended June 30, 2012
RAMSEY, the Isle of Man, September 4, 2012 /PRNewswire/ --
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IBS Group Holding Limited (IBSG:GR; IBSGq.DE), a leading software development and IT services provider in Central and Eastern Europe, has announced today its preliminary unaudited operating results for the quarter ended June 30, 2012 (1Q FYE March 2013).
Highlights
- Consolidated revenues amounted US$165.4 mn, a decline of 2.5% y-o-y, which was mostly driven by FX volatility across geographies where the Group operates, and deconsolidation of non-core business in the IT Services segment.
- International revenues (ex-Russia) amounted to US$66.9 mn, and now account for 40.5% of consolidated Group revenues against 33.6% a year ago.
- Total headcount reached 8,363 employees, an increase of 9.6% y-o-y, which is attributable to Software Development segment expanding delivery centers in Eastern Europe.
- Total debt amounted to US$62.4 mn, a decline of US$3.1 mn y-o-y, with the net debt position largely unchanged.
- Consolidated revenues growth guidance for FYE March 31, 2013 is maintained in the range of 9-15%.
Consolidated revenues by segment *
1Q FYE March 1Q FYE March US$, mn 2013 2012[1] Change y-o-y Consolidated revenues 165.4 169.6 -2.5% IT Services segment 78.5 92.6 -15.2% IT Services segment, RUB mn 2,500 2,476 0.9% Software Development segment 71.0 61.8 14.9% Corporate, other and eliminations 15.9 15.2 4.6%
* Source: preliminary unaudited management accounts.
1. Consolidated and IT Services segment revenue in 1Q FYE March 2012 quarter is adjusted for results of OOO Borlas Group
Consolidated revenues amounted US$165.4 mn, a decrease of 2.5% y-o-y.
The IT Services segment revenues amounted US$78.5 mn, a decline of 15.2% y-o-y. In February 2012 the Group finalized transaction which resulted in the increase of interest in IT Services segment by 14.09% to 97.02%, and deconsolidation of OOO Borlas Group which added US$7mn of segment's revenue in 1Q FYE March 2012. Adjusted for depreciation of RUB vs. US$ in respective periods, segment's revenues would increase by 0.9%. We reiterate our full year revenues growth guidance for the segment in the range of 6-12%.
The Software Development segment revenues climbed to US$71.0 mn, an increase of 14.9% y-o-y owing to sustained demand for advanced software engineering services from clients in Western Europe and North America. The growth rates were most aggressive in several key verticals, such as telecom, automotive, and technology, however, were tempered by depreciation of EUR vs. USD in respective quarters. We reiterate our full year revenues growth guidance for the segment in the range of 18-23%.
Consolidated revenues by geography *
Share Share Change 1Q FYE of 1Q FYE of in March total March total absolute US$ mn 2013 revenue 2012 revenue result Revenues generated in Russia 98.5 59.5% 117.2 66.4% -16.0% Revenues generated in Europe 33.5 20.3% 30.8 17.4% 8.8% Revenues generated in North America 33.4 20.2% 28.6 16.2% 16.8%
* Source: preliminary unaudited management accounts, customer geography determined based on the location of clients key decision maker.
Revenues from Russian operations totaled US$98.5 mn, a decline of 16% y-o-y mostly driven by currency fluctuations in respective periods and deconsolidation of non-core business in IT Services segment.
Revenues generated in Europe totaled US$33.5 mn, an increase of 8.8% y-o-y and now account for 20.3% of the Group revenues. Revenues generated in North America amounted US$33.4 mn, up 16.8% y-o-y and now account for 20.2% of the Group revenues. The revenue growth in both geographies was driven by the business activity picking up in the Software Development segment.
Headcount *
June June 30, 30, Change March 31, Change Number of employees 2012 2011 y-o-y 2012 q-o-q Group 8,363 7,631 9.6% 8,252 1.3% IT Services segment 2,526 2,804 -9.9% 2,668 -5.3% Software Development segment 5,528 4,506 22.7% 5,277 4.8% Corporate and other 309 321 -3.7% 307 0.7%
* Source: preliminary unaudited management accounts.
The Group's total headcount rose by 9.6% y-o-y to 8,363 employees. In line with our strategy to focus on the efficiency of IT Services segment, we further streamlined our operations which resulted in 5.3% q-o-q decline in number of employees with headcount now standing at 2,526. Our Software Development segment continued to expand delivery centers mostly in Ukraine and other Eastern European locations that increased headcount by 4.8% q-o-q to 5,528.
Debt *
March June 30, June 30, Change 31, Change US$ mn 2012 2011 y-o-y 2012 q-o-q Total debt 62.4 65.6 -3.1 42.5 19.9 Current debt 42.0 40.7 1.3 20.9 21.1 Non-current debt 20.4 24.9 -4.4 21.6 -1.2 Net debt 40.9 40.3 0.6 24.0 17.0
* Source: preliminary unaudited management accounts.
Group's total debt declined by US$3.1 mn y-o-y to US$62.4 mn, while net debt position remained mostly unchanged. Over the last quarter Group's debt position increased by US$19.9 mn, and net debt position increased by US$17mn - both are attributable to seasonal rise of working capital requirements in the IT Services segment.
Comment from President
Anatoly Karachinsky, President of IBS Group said, "The current febrile economic climate affecting the European, US, and as a result Russian markets has given way to weakened growth in the IT-market. However, having taken steps to factor this into our forecast, I am pleased to report that first quarter results sit well within the projected figures. The software development segment is still showing a double-digit growth, and indicative of a wider long-term trend, aimed at offshore model of utilising IT-services. If uncertainty grows, this segment is likely to be further losing momentum, however. While it is indisputable that the performance of the IT-segment has been impacted by the recent volatility of the RUB/USD rate and the deconsolidation of non-core businesses, on a comparable basis, rouble revenues within the segment have remained robust."
About IBS Group Holding Limited
IBS Group is a leading software development and IT services provider in Central and Eastern Europe. Through its two principal subsidiaries, Luxoft and IBS IT Services, it offers a wide variety of information technology services, such as software development and IT services outsourcing, IT infrastructure and business applications implementation. IBS Group has business operations in Russia, Ukraine, Romania, Poland, Germany, Switzerland, the UK, the USA, Vietnam and Singapore. IBS Group employs more than 8,300 people worldwide. In the year ended March 31, 2012, the Group reported US GAAP consolidated revenues of USD816.3 million. IBS Group's Global Depositary Receipts are listed on the Regulated Market (General Standard) at the Frankfurt Stock Exchange (Bloomberg: IBSG:GR; Reuters: IBSGq.F)
Disclaimer
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SOURCE IBS Group Holding Limited
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