Oracle Financial Services Software (532466) Q4 08/09 earnings summary

Executive summary

• FY09 consolidated revenue rose 23% to Rs 29,276.2 million; net income increased 77% to Rs 7,365.4 million, with EPS of Rs 87.93.

• Earnings growth reflected stronger product performance, improved segment margins, higher interest income and foreign-exchange gains; results also included a Rs 468.9 million exceptional settlement and Rs 291.1 million goodwill impairment.

Financial highlights

• Revenue Rs 29,276.2 million, up 23% YoY; operating profit Rs 7,196.8 million, up 81%; net income Rs 7,365.4 million, up 77%.

• Basic and diluted EPS were Rs 87.93 and Rs 87.90, respectively, versus Rs 49.66 and Rs 49.58 in FY08.

• Interest and other income rose to Rs 1,789.4 million from Rs 639.7 million, including higher interest income and FX gains amid rupee depreciation against the US dollar and euro.

• Cost of revenue fell to 49% of revenue from 55%; net margin rose to 25% from 17%.

Outlook and guidance

• Current economic conditions were viewed as an opportunity to address institutions’ cost, service, resilience and compliance needs; core banking, risk and compliance, investor services and internet banking were identified as areas of potential.

• Growth opportunities included large-bank core-system adoption, untapped markets and expanding offerings in consumer finance, Basel II, AML, private wealth and Islamic banking.

• Priorities included product innovation and expanding market reach and delivery capacity; cash from operations was expected to cover foreseeable working-capital and capital-expenditure needs.