Sonata Software (SONATSOFTW) Q4 01/02 earnings summary

Executive summary

• FY 2001-02 consolidated total income was Rs.2,286.68m, EBIDT Rs.262.69m and PAT Rs.208.89m; parent-only total income was Rs.837.14m and PAT Rs.178.05m. Parent figures are not comparable with FY 2000-01 after the Indian business transfer effective 1 July 2000.

• Q4 consolidated total income was Rs.667.91m and PAT Rs.30.28m; parent-only Q4 revenue was Rs.169.15m and PAT Rs.20.95m, versus Rs.254.38m and Rs.82.83m a year earlier.

• Added 17 customers during the year, including five in Q4; growth plans centered on existing accounts, expanding service breadth and depth, and domain strengths in financial services, logistics, healthcare and insurance.

Financial highlights

• Parent-only FY revenue from sales and services was Rs.813.72m, versus Rs.1,275.92m in FY 2000-01; the prior-year period included Indian operations through 30 June 2000.

• Parent-only FY PBT was Rs.185.92m and PAT Rs.178.05m, versus Rs.342.42m and Rs.333.35m; provision for tax was Rs.7.87m.

• Consolidated FY PBT was Rs.222.57m and PAT Rs.208.90m; consolidated EPS was Rs.1.99 per Rs.1 share.

• Parent-only operating expenditure fell 9.61% YoY, mainly on lower onsite subsistence and travel costs and other savings measures.

• Parent-only operating cash flow was Rs.238.19m; investing outflow was Rs.398.46m and financing outflow Rs.56.24m, leaving cash and equivalents of Rs.95.56m at year-end.

Outlook and guidance

• The US recovery pace remained a key uncertainty; plans focused on deepening existing customer relationships, extending offerings and leveraging expertise in financial services, logistics, healthcare and insurance.

• Indian operations planned to add channel partners, pursue value-added and higher-margin distribution, and build ERP skills in SAP and PeopleSoft while preparing for a potential market revival.

• R&D priorities included reusable IP, industry-specific applications and web-services frameworks; management viewed web services as a future growth area.