Conference Call with R Systems Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen in to the full transcript.
Call Participants: Mr. Rekhi Singh - Managing Director, Mr. Nand Sardana - CFO, Mr. Avirag Jain - CTO
Introductory Remarks from Rekhi Singh
Good morning everybody and thank you for being a part of this investor call. I want to reiterate what Kumar said. We are all going through unprecedented times and I hope everybody is staying safe and healthy. The company has implemented the required work from home guidelines to ensure the health and safety of our associates while we continue to provide seamless services to our customers. We are working closely with our customers and our vendors as a long term partner to handle these challenges together. There is still uncertainty in the global economy. However, R System with a strong balance sheet and deep product engineering and services offering is well positioned to tackle the near term challenges and to emerge as a stronger, agile and dynamic organization. Further, in these challenging times, the various governments like the USA and Singapore have also offered certain financial stimulus packages to support the businesses.
R Systems will continue to closely monitor any material changes to the future economic conditions. During the first quarter of 2020, we have reported revenues of Rs 209 crores, $28.9 million. We had a reasonable growth of 7% against the same quarter last year. The EBITDA for the year was Rs 20 crore which is 9.6% as against 9% in same quarter, last year and 10.2% in previous quarter. The margin was impacted by yearly salary raises and conservative AR provisions as offset by rupee depreciation. Profit after tax was Rs 9.5 crore as against Rs 12.38 crore same quarter, last year and Rs 23.23 crores in the previous quarter. Net profit after tax was impacted by mark to market loss of Rs 6.85 crores on lease statement of forward covers.
We saw 25 million-dollar customers during the quarter including five customers contributing $3 million plus revenues. Also, we added 5 key customers who continue to contribute 40% of our revenues. We have however started witnessing softness in the demand towards the end of Q1 2020 due to the global lockdown.
As I have mentioned, we have implemented the required work from home guidelines to ensure that we are able to provide seamless services to our customers and at the same time ensure the health and safety of our associates. We have a strong balance sheet with shareholders fund at Rs 350 crores and cash and bank balances of Rs 218 crores to support our liquidity and growth.
Detailed financial analysis from Mr. Nand Sardana
Good morning to all. Thank you everybody for attending the call. I do hope that everybody is staying safe and are adapted to this new normal. Let me go into detail of each line item of our profitability statement.
Revenue for the quarter was Rs 209.9 crores, QoQ decrease of 1.7% and YoY increase of 6.6% in rupee terms. Traditionally Q1 is a weak quarter as clients are still in the process of releasing their IT budgets. We started reasonably well in 2020 with 6.6% YoY growth.
We have added 5 key elements in the quarter and 75 plus associates during the quarter. We started feeling softness in demand due to Covid-19 towards the end of the quarter when several economies announced lockdown. It seems that it will impact our Q2 and Q3 to some extent and as our business gets tuned to this normal, we can see a regular Q4.
Getting down to gross margin, it was 30.04% in this quarter compared to 36.04% in the last quarter and 33.66% in the same quarter, last year. Reduction of 100 basis point QoQ is mainly due to the impact of imperial decrease in utilization as offset by the acquisition. Covid-19 challenges will have impact on our revenue as correspondingly it will impact the margins. However, we have taken certain cautionary measures to protect the margins.
As you know that in this pandemic, the travel and hospitality sector and retail to some extent has been impacted, R System’s exposure is not more than 5% in these sectors. Infact, more than 30% of revenue comes from the telecom sector which has been a beneficiary. So our telecom sector and most of the computerised part of the business which is mainly into telecom have kind of performed well in this quarter and we are hopeful that it will perform well in the quarters to come.
We have some exposure in BFSI, but more or less we are not majorly impacted. Coming on to the challenges, I think most of the customers are dependent on our project delivery. It is a difficult time for them as you know that 65% of our business comes from the US. As of now, to some extent there is an impact but we feel that as the lockdown ease and things start moving, maybe from the start of July things will start moving to normal.
Conference Call with Ujjivan Small Finance Bank Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen in to the full transcript.
Earnings Call Transcript for Embassy Office Parks REIT Q4FY20 earnings performance and outlook.
Michael Holland Chief Executive Officer (CEO), Embassy REIT
These are challenging times across the world and wherever you are, we sincerely hope that you, your family and colleagues are healthy and safe.
Today we announced our fourth quarter and full year FY20 results – in a world which is exhibiting unprecedented uncertainty, we are pleased to report a great outcome for FY20, a Q4 distribution of Rs.5,317 million, that’s a total distribution for FY20 of Rs.18,821 million, ahead of our revised guidance last quarter, and an NOI growth of 15% YOY, all demonstrating the resilience of our business despite COVID related disruptions in March 2020.
Our core business proposition of predictable, low volatility cash flows and quarterly distributions has delivered in FY20 what we said at the beginning of the year - a record 2.4 msf new leases, 15% YOY growth in NOI, early delivery and healthy pre-commitments on our 1.4 msf on-campus development, culminating in the strong distributions for our Unitholders. Notwithstanding this strong set of results for FY20, our full focus now is on our business today and the year ahead given the difficult external environment which has enveloped global and Indian markets since the COVID outbreak. In India, COVID-19 started to emerge as a potentially significant business disruptor in late February.
We entered this crisis in a position of great strength, the result of a number of years of prudent and proactive management of the business. Our strong balance sheet, ample liquidity, the long term lease contracts with our 160+ corporate office occupiers, the strong relationships and trust we have built with them over the years and our first class on-ground operations teams across the country all contribute to the resilience of our platform, and surely that resilience will be required over the coming year. Since the outbreak and subsequent lock-down by government, our focus has been to facilitate business continuity for our occupiers operating critical services from our parks and ensuring the health, safety, and well-being of all our stakeholders.
Our parks remained open for business to support core business functions of our occupiers throughout the national lockdown within the parameters laid out by the Central Government and the multiple States in which we operate. The many accolades from our occupiers reflect the hard work and unwavering commitment of our on-ground teams. We acknowledge and sincerely thank all of our front-line employees and service providers for their efforts to date.
We are in very early stages of this global business disruption and there is a great deal of uncertainty, many views and speculative comments about potential impact of issues such as social distancing, work from home, workplace de-densification, business travel reductions, liquidity squeeze, and so on. In addition, we’re still operating in a restricted environment even today, and it is difficult to estimate with a reasonable level of certainty as to how long the current challenges will persist.
However, amid this uncertainty, we have a positive view on a number of areas: Firstly, it is clear that a significant reduction in the densities of the workplace is coming, given increased priority to employee wellness, and this will drive demand. Some of this de-densification, but certainly not all, will be offset by more flexible workstyles including work from home. The work from home experiment in India has delivered in this crisis but my recent interactions with many corporate occupiers leads us to a preliminary assessment that while the industry may see more flexibility in employee workstyles, the total business environment which Embassy REIT provides to its occupiers and their employees cannot, in India, be fully replaced by solitary work from home changes. One business leader from a global corporation explained to me that, for his people, a young demographic of digital/tech experts serving cloud, cyber security and data needs of western corporations, the “office is their home”.
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Conference Call with Bharti Airtel Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen in to the full earnings transcript
