VIDESH SANCHAR NIGAM LIMITED
30 July 1999
VSNL - UNAUDITED (PROVISIONAL) FINANCIAL RESULTS
FOR THE QUARTER ENDED 30 JUNE 1999
Videsh Sanchar Nigam Limited (VSNL). India's exclusive provider of international
telecommunications services, today announced its unaudited (provisional)
financial results for the first quarter of the financial year 1999-2000.
Key Highlights
* Q1 Net Profit at Rs.355.1 Crores, Gross Profit at Rs.548.4 Crores.
* Revenues from Value-added Services double - Rs.172.9 Crores (Q1 ending June
1998 - Rs.81.4 Crores).
* Q1 Internet revenues grow 163% to Rs.53.9 Crores (Q1 1998 Internet revenues _
Rs.20.5 Crores).
* Leased channel revenues grow by 51%, Frame Relay revenues by 400% versus Q1
1998.
* Q1 total revenues at Rs.1780.9 Crores.
VSNL today declared strong financial results for the quarter ended June
1999. The Net Profits of the Company have risen to Rs.355.1 Crores for
the quarter (against Rs. 311.3 Crores in Q1 1998), showing a growth of
14.07%. The Gross Profits of the Company have grown to Rs.584.4 Crores for
the quarter, against Rs,470.1 Crores for Q1 1998, exhibiting a growth of 20%.
The growth in Net Profits arises out of strong operational performance of the
Company, as the 'Other Income' in the current quarter has been lower at Rs.91.1
Crores against Rs.123.8 Crores in Q1 1998, while the impact of taxation has been
higher by Rs.169 Crores (Rs.140.3 Crores in Q1 1998). The lower 'Other Income'
signifies significantly lower depreciation of the Rupee which was only 95 paise
in Q1 1999 as against Rs.1.81 during Q1 1998.
The telephone traffic for the quarter ended 30 June 1999 aggregated to Rs.524.47
million paid minutes compared to 457.18 million paid minutes recorded during the
corresponding period of the previous year, representing a growth of 14.72%. The
total telephone traffic for the year ended 31 March 1999 was 1935 million paid
minutes.
VSNLs total revenues in Q1 1999 amounted to Rs.1780.9 Crores against
Rs.1690.8 Crores in Q1 1998, exhibiting a growth of 5.33%. The lower growth in
revenues is commensurate with the fall in accounting rates of about 10% in
the corresponding period and a growth in traffic of 15%.
Value-added Services
There has been a strong growth in Value-added Services provided by
VSNL, showing positive results of its diversification activities. VSNL's
International Private Leased Line Services, Internet and Managed Data Services
are primarily drivers for India's IT industry.
* Leased channel revenues have grown to Rs.77.3 Crores (Q1 1998-Rs.51.1
Crores), exhibiting a growth of 51.27%. Leased line revenues now comprise
4.6% of VSNL's Gross Revenues. 64 Kbps equivalent leased circuits have grown
to 1238 from 957 in Q1 1998, exhibiting a growth of 29.36%.
* Internet revenues have grown to Rs.53.9 Crores from Rs.20.5 Crores in Q1
1998, exhbiting a growth of 162.93%. The above financial growth is despite a
steep reduction in Internet leased line tariffs, effected from 1 April 1999,
as per TRAI recommendations. Internet revenues now comprise 3.22% of VSNL's
Gross Revenues.
* Frame Relay revenues have grown to Rs.8.5 Crores in Q1 1999 as against Rs.1.7
Crores in Q1 1998, exhibiting growth of 400%.
* Other Value-added Services, including TV Uplinking. GEMS 400, etc.,
contributed Rs.33.4 Crores in Q1 1999 against Rs.8.1 Crores in Q1 1998.
Commenting on the results, Shri Amitabh Kumar, Acting Chairman & Managing
Director, VSNL, said, 'VSNL has proved to be a strong value creator for its
customers and shareholders. Our investments in new technologies and
infrastructure strongly position the Company to take advantage of the emerging
opportunities with the increasing liberalisation in the telecommunications
sector.
VSNL's growing revenues in Value-added Services mirror the growth of the IT
industry in India. Recent developments, including the new IT Policy which gives
a thrust to investment in telecommunications, and the new tariff structure now
in place for telephony services, will continue to drive the revenues of the
Company in the current year.'
VSNL's Diversification in Value-added Services
SI Item Quarter ended Quarter Ended Growth
No. 30 June 1999 30 June 1998 %
1. Telephone Traffic (million 524.47 457.18 14.72%
minutes)
2. Net Telephone Revenue @Rs.10 Rs.524.47 Crores Rs.457.18 Crores 14.72%
per minute
3. Value-added Services:
3.1 Leased Channels Rs.77.3 Crores Rs.51.1 Crores 51.27%
3.2 Internet Rs.53.9 Crores Rs.20.5 Crores 162.93%
3.3 Frame Relay Rs. 8.5 Crores Rs. 1.7 Crores 400%
3.4 Other Value-added Services
including TV Uplinking Rs.33.4 Crores Rs.8 Croes
Total Value-added Service
Revenues Rs.172.9 Crores Rs.81.4 Crores
4. Value-added Service Revenues
as percentage of Net Telephone 33% 17.8%
VSNL has exhibited and achieved higher operational efficiency. The network cost
has increased marginally from Rs.1180.7 Crores in quarter ended June 1998 to
Rs.1189.5 Crores in quarter ended June 1998 (0.75%) despite a growth in traffic
of 14.72% and growth in traffic revenues of 8.1%. The telephone revenue as a
percentage of total revenue for the quarter ended 30 June 1999 works out to
83.92% as compared to 86.22% for the corresponding period in the previous year.
Other Highlights
* VSNL completed and commissioned the ground segment for INSAT-2E satellite and
commenced uplinking in June 1999 for Indian boradcasters. A new Standard-A
earth station has been commissioned for this purpose at Chennai.
* A new Standard-A earth station was commissioned at Arvi in June 1999 at a
cost of approximately Rs.40 Crores. This is the third Standard-A earth
station commissioned at Arvi, and brings the number of operational antennas
in the western region to eight operating on various satellites of the
INTELSAT system.
* Internet Central Control Facility (ICCF) comprising of a highly advanced
monitoring and control system for Internet, and an international Internet
Exchange was commissioned in April 1999.
* ISP Business Picks Up. Commissioned services to 33 ISPs. Links to 20 ISPs
under commissioning.
* Internet Value-added Services enhanced with Global Roaming, E-Mail to Paging,
Page Mail Services launched in India.
* SEA-ME-WE-3 construction and testing completed. System awaiting
commissioning by the consortium.
VSNL has signed an MOU in July 1999 for operating and financial performance with
the DOT.
VSNL performance is currently on target to meet the MOU requirements.
Internet Version available at: www.vsnl.com
Media reports - Press Release Section.
UNAUDITED FINANCIAL RESULTS (PROVISIONAL)
FOR THE QUARTER ENDED 30th JUNE, 1999
(Rupees in million)
For the For the For the year
Quarter ended quarter ended
30.06.99 ended 31.03.99
(Unaudited) 30.06.98 (Audited)*
(Unaudited)
1. Net Sales/Income from
operations 16,898 15,670 68,315
2. Other Income 911 1,238 3,441
TotaL Income 17,809 16,908 71,756
3. Total Expenditure 12,325 12,207 51,812
4. Interest 0 0 0
5. Gross Profit(+)/Loss(-) 5,484 4,701 19,944
after interest but
before depreciation
and taxation
((1 + 2)- (3 + 4))
6. Depreciation 243 185 800
7. Provision for Taxation 1,690 1,403 5,894
8. Net Profit (+)/Loss(-) 3,551 3,113 13,250
(5-(6 + 7))
9. Paid-up Equity Share
Capital 950 950 950
10. Reserves excluding - - 53,256
revaluation reserves
(as per balance
sheet of previous
accounting year)
11. Earnings per share (Rs.) 149.52 131.07 139.47
(Annualised) (Annualised)
* Subject to CAG audit
1. The above results were taken on record by the Board of Directors of the
Company at its Meeting held on 30th July 1999.
2. Interest on GDR Funds has been considered as income earned during
the construction period and adjusted against carrying cost of the assets as
done in the previous year.
3. Figures of previous year have been regrouped wherever necessary.
4. The Company has made a detailed assessment of risks posed to its operations
by the year 2000 (Y2K) problem and has initiated, since 1997, appropriate
risk mitigation measures. VSNL has adopted BSI PD-2000 standard as
definition of Y2K readiness. Although most of the systems are Y2K-ready,
full readiness is expected to be achieved by November 1999. The company has
a budget estimate of approx. Rs.363 million for the purpose. Detailed
contingency plans are under preparation.
For Videsh Sanchar Nigam Limited
Place: Mumbai Amitabh Kumar
Date: 30 July 1999 Acting Chairman and Managing Director