Country for PR: United Kingdom
Contributor: PR Newswire Europe
Saturday, January 12 2019 - 01:31
AsiaNet
Infosys (NYSE: INFY) Announces Results for the Quarter Ended December 31, 2018
BENGALURU, India, Jan. 11, 2019 /PRNewswire-AsiaNet/--

    
    10.1% CC YoY Revenue Growth in Q3 Leads to Upward Revision in Guidance

    "With increased client relevance, we saw double digit (10.1%) year-on-year 
growth in Q3 on a constant currency basis," said Salil Parekh, CEO and MD. "We 
also had another strong quarter in our digital business with 33.1% growth and 
large deals at $1.57 billion which gives us confidence entering 2019", he added.

         (Logo: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg )

    8.5%-9.0% Revision in FY 19 Guidance in CC terms

    2.7% QoQ revenue growth in CC terms

    33.1% YoY Digital revenue growth in CC terms

    $1.5 Bn+ Large deal signings

    22.6%* Operating margin

    *Includes additional depreciation and amortization impact of 0.4% due to
reclassification of assets of Panaya and Skava from "Held for Sale."

    
    - Q3 19 revenues grew year-on-year by 8.4% in USD terms; 10.1% in constant 
      currency terms
    - Q3 19 revenues grew sequentially by 2.2% in USD terms; 2.7% in constant 
      currency terms
    - Digital revenues at $942 million (31.5% of total revenues), year-on-year 
      growth of 33.1% and sequential growth of 5.0% in constant currency terms
    - 9 months revenues grew by 7.4% in USD terms; 8.1% in constant currency 
      terms
    - FY 19 revenue guidance in constant currency revised upward to 8.5%-9.0%; 
      Operating margin guidance retained at 22%-24%
    - Announces buyback under open market route of ₹8,260 crore at a 
      Maximum price of 800 Indian Rupees per share
    - Announces a special dividend of 4 Indian Rupees  per share

    1. Financial Highlights - Consolidated results under International 
Financial Reporting Standards (IFRS)

    For the Quarter ended December 31, 2018
    - Revenues were $2,987 million, growth of 8.4% YoY and 2.2% QoQ
    - Operating profit was $675 million, growth of 0.9% YoY and decline of 
      2.6% QoQ#
    - Basic EPS was $0.12, decline of 33.9% YoY@ and 13.6% QoQ#

    For nine months ended December 31, 2018
    - Revenues were $8,740 million, growth of 7.4% YoY
    - Operating profit was $2,038 million, growth of 3.7% YoY
    - Basic EPS was $0.37, decline of 11.3% YoY##@

    # Includes additional depreciation and amortization expenses of $12 million 
for Panaya and Skava. Additionally, Basic EPS includes reduction in fair value 
of Skava which together resulted in a reduction in EPS by $0.02. 

    ##Includes additional depreciation and amortization expenses, reduction in 
fair value and carrying value of Panaya and Skava, respectively which resulted 
in a reduction in EPS by $0.03. 

    @Includes impact on account of conclusion of an APA with the US IRS which 
has led to an increase in EPS of $0.05 for the quarter and nine months ended 
December 31, 2017. 

    "Volume growth was strong and revenue productivity was stable despite Q3 
being a seasonally weak quarter. We had good growth across geographies and 
large business segments," said Pravin Rao, COO. "Attrition declined during the 
quarter and we are continuing on the path of increased interventions and 
employee engagements to reduce it further."

    "We saw significant currency volatility during the quarter and managed it 
effectively by our hedging strategy," said Jayesh Sanghrajka, Interim CFO. 
"Cash generation was strong during the quarter. Executing on the capital 
allocation strategy announced in April 2018, we have announced a share buyback 
program and a special dividend."

    2. Capital Allocation Policy 

    The Board in its meeting held today approved the following:    
    
    -  Buyback of Equity Shares, from the open market route through the Indian 
       stock exchanges, amounting to Indian Rupees 8,260 crore (Maximum
       Buyback Size) (approximately $1,184 million) at a price not exceeding 
       Indian Rupees 800 per share 
       (Maximum Buyback Price) (approximately $11.46 per share), subject to
       shareholders' approval by way of Postal Ballot, and 
    -  A Special Dividend ofIndian Rupees 4/- per share (approximately $0.06 
       per share)that would result in a payout of approximately Indian 
       Rupees 2,107 crore(approximately $302 million) (including dividend 
       distribution tax)

    After the execution of the above, along with the special dividend 
(including dividend distribution tax) of Indian Rupees 2,633 crore ($386 
million) already paid in June 2018, the Company would complete the distribution 
of Indian Rupees 13,000 crore, which was announced as part of its capital 
allocation policy in April 2018.

    As the USD/INR* exchange rates have moved from April 2018 when the capital 
allocation policy was announced, the total capital allocation in US$ terms 
amounts to $1,872 million (comprising $1,184 million pertaining to buyback as 
mentioned above, $386 million towards special dividend paid in June 2018 and 
$302 million towards special dividend to be paid to shareholders in January 
2019).

    *US$ 1= 69.78 Indian Rupees as at December 31, 2018    

    3. Assets Held for Sale 

    The company had earlier classified its subsidiaries Kallidus & Skava 
(together referred to as "Skava") and Panaya as "Held for Sale". During the 
quarter ended December 31, 2018, based on evaluation of proposals received and 
progress of negotiations with potential buyers, the Company concluded that it 
is no longer highly probable that sale would be consummated by March 31, 2019. 
Accordingly, Panaya and Skava have been de-classified from "held for sale" in 
accordance with the requirements of IFRS 5.

    On de-classification, the Company recognized additional depreciation and 
amortization expenses of $12 million and a reduction of $65 million in the 
carrying value for Skava. The impact of the same on the Basic Earnings Per 
Share was a decrease of $0.02 for the quarter ended December 31, 2018.The 
Company plans to repurpose Skava's micro services based business and refocus 
Panaya's suite of products.

    4. Board Update 

    Based on the recommendation of the Nomination and Remuneration Committee, 
the Board approved the re-appointment of Kiran Mazumdar-Shaw as the Lead 
Independent Director from April 1, 2019 to March 22, 2023, subject to 
shareholder' approval.

    "I am delighted that the Infosys Board of Directors has unanimously 
recommended Kiran Mazumdar-Shaw for reappointment as the Lead Independent 
Director," said Nandan Nilekani, Chairman of the Board. "Kiran has been a 
pillar of strength to the board, especially over the last eighteen months as we 
steered the company to stability and growth. As chair of the Nominations & 
Remuneration Committee, she played a critical role in the CEO and CFO selection 
process. Her continuity, experience and insights are greatly valued by the 
Board as it guides the company in executing its strategy in the coming years," 
he added.

    About Infosys 

    Infosys is a global leader in next-generation digital services and 
consulting. We enable clients in 45 countries to navigate their digital 
transformation. With over three decades of experience in managing the systems 
and workings of global enterprises, we expertly steer our clients through their 
digital journey. We do it by enabling the enterprise with an AI-powered core 
that helps prioritize the execution of change. We also empower the business 
with agile digital at scale to deliver unprecedented levels of performance and 
customer delight. Our always-on learning agenda drives their continuous 
improvement through building and transferring digital skills, expertise, and 
ideas from our innovation ecosystem.

    Visit: www.infosys.com [http://www.infosys.com ] to see how Infosys (NYSE: 
INFY) can help your enterprise navigate your next.

    Safe Harbor 

    Certain statements mentioned in this release concerning our future growth 
prospects are forward-looking statements regarding our future business 
expectations intended to qualify for the 'safe harbor' under the Private 
Securities Litigation Reform Act of 1995, which involve a number of risks and 
uncertainties that could cause actual results to differ materially from those 
in such forward-looking statements. The risks and uncertainties relating to 
these statements include, but are not limited to, risks and uncertainties 
regarding fluctuations in earnings, fluctuations in foreign exchange rates, our 
ability to manage growth, intense competition in IT services including those 
factors which may affect our cost advantage, wage increases in India, our 
ability to attract and retain highly skilled professionals, time and cost 
overruns on fixed-price, fixed-time frame contracts, client concentration, 
restrictions on immigration, industry segment concentration, our ability to 
manage our international operations, reduced demand for technology in our key 
focus areas, disruptions in telecommunication networks or system failures, our 
ability to successfully complete and integrate potential acquisitions,
liability for damages on our service contracts, the success of the companies in 
which Infosys has made strategic investments, withdrawal or expiration of 
governmental fiscal incentives, political instability and regional conflicts, 
legal restrictions on raising capital or acquiring companies outside India, and 
unauthorized use of our intellectual property and general economic conditions 
affecting our industry. Additional risks that could affect our future operating 
results are more fully described in our United States
Securities and Exchange Commission filings including our Annual Report on Form 
20-F for the fiscal year ended March 31, 2018. These filings are available at 
www.sec.gov 
[https://www.infosys.com/Links/redirectlink.aspx?id=www.sec.gov.aspx ]. Infosys 
may, from time to time, make additional written and oral forward-looking 
statements, including statements contained in the company's filings with the 
Securities and Exchange Commission and our reports to shareholders. The company 
does not undertake to update any forward-looking statements that may be made 
from time to time by or on behalf of the company unless it is required by law.

    Infosys Limited and subsidiaries  

    Audited Condensed Consolidated Balance Sheet as at 

                    (Dollars in millions except equity share data) 

    
                                      December 31,     March 31,  
                                           2018           2018
ASSETS
Current assets
Cash and cash equivalents                  2,357           3,041
Current investments                        1,407             982
Trade receivables                          2,130           2,016
Unbilled revenue                             688             654
Prepayments and other current assets         776             662
Derivative financial instruments              60               2
                                           7,418           7,357
Assets held for sale(4)(5)                    -              316
Total current assets                       7,418           7,673
Non-current assets
Property, plant and equipment              1,817           1,863
Goodwill                                     514             339
Intangible assets                            108              38
Investment in associate                      -               -
Non-current investments                      650             883
Deferred income tax assets                   174             196
Income tax assets                            932             931
Other non-current assets                     259             332
Total non-current assets                   4,454           4,582
Total assets                              11,872          12,255
LIABILITIES AND EQUITY
Current liabilities
Trade payables                               219             107
Derivative financial instruments             -                 6
Current income tax liabilities               247             314
Client deposits                                5               6
Unearned revenue                             434             352
Employee benefit obligations                 229             218
Provisions                                    83              75
Other current liabilities                  1,190           1,036
                                           2,407           2,114
Liabilities directly associated with
assets held for sale(4)(5)                   -                50
Total current liabilities                  2,407           2,164
Non-current liabilities
Deferred income tax liabilities               76              82
Employee benefit obligations                   6               7
Other non-current liabilities                 63              42
Total liabilities                          2,552           2,295
Equity
Share capital- ₹5 ($0.16) par value
4,800,000,000 (2,400,000,000) equity
shares authorized, issued and
outstanding 4,347,938,160 (2,173,312,301),
net of 20,709,738 (10,801,956) treasury 
shares as at December  31, 2018
(March 31, 2018), respectively               340             190
Share premium                                268             247
Retained earnings                         11,252          11,587
Cash flow hedge reserve                        5             -
Other reserves                               385             244
Capital redemption reserve                     9               9
Other components of equity                (2,947)         (2,317)
Total equity attributable to equity
holders of the company                     9,312           9,960
Non-controlling interests                      8             -
Total equity                                9,320           9,960
Total liabilities and equity               11,872          12,255


    Infosys Limited and subsidiaries 

    Audited Condensed Consolidated Statement of Comprehensive Income for the
    (Dollars in millions except equity share and per equity share data) 


                      Three          Three         Nine        Nine 
                      months         months        months      Months    
                      ended          ended         ended       ended
                      December       December      December    December   
                      31, 2018       31, 2017      31, 2018    31, 2017  


Revenues              2,987         2,755         8,740        8,134
Cost of sales         1,956         1,773         5,660        5,208
Gross profit          1,031           982         3,080        2,926
Operating expenses:
Selling and
marketing
expenses                161           136           464          405
Administrative 
expenses                195           177           578          555
Total operating 
expenses                356           313         1,042          960
Operating
profit                  675           669         2,038        1,966
Other income, 
net(3)                  105           149           317          413
Reduction in the
fair value of
disposal 
Group held for
sale(4)                  -             -            (39)           -
Adjustment in respect 
of excess of carrying 
amount over recoverable
amount on 
reclassification 
from "Held for 
Sale"(5)              (65)              -           (65)            -
Share in net 
profit/(loss)
of associate,
including
impairment(6)           -              -             -             (11)
 
Profit before 
income taxes           715           818          2,251        2,368
Income tax 
expense(7)             213            22            633          453
Net profit             502            796         1,618        1,915
Other comprehensive
income Items that will
not be reclassified 
subsequently to profit
or loss: 
Re-measurements of 
the net defined 
benefit
liability/asset, 
net                    (4)              2           (3)            3
Equity instruments
through other
comprehensive 
income, net             8              -            10            -
Items that will  
be reclassified
subsequently
to profit or loss:
Fair valuation
of investments,
net                     6            (4)            (3)            2
Fair value 
changes on
derivatives
designated 
as cash flow
hedge, net             8              1              5           (6)
Foreign
currency
translation          295            229           (634)          182
Total other 
comprehensive
income/(loss),
net of tax           313             228          (625)          181
Total 
comprehensive
income                815          1,024           993         2,096
Profit attributable
to: Owners of 
the Company           502            796         1,618         1,915
Non-controlling 
interests              -              -             -            -
                      502            796         1,618         1,915
Total comprehensive
income attributable
to: Owners of the 
Company               815          1,024           993         2,096
Non-controlling 
interests              -             -             -            -
                      815         1,024           993          2,096
Earnings per equity 
share(8)
Basic ($)            0.12          0.17           0.37          0.42
Diluted ($)          0.12          0.17           0.37          0.42
Weighted average equity shares
used in computing earnings per
equity share(8) 

Basic       4,347,673,466	4,550,149,608	4,347,130,342	4,564,373,542
Diluted     4,352,731,387	4,552,763,140	4,352,705,150	4,568,574,984




    NOTES:

    
    1) The audited condensed consolidated Balance sheet and Statement of 
Comprehensive Income for the three months and nine months ended December 31, 
2018 have been taken on record at the Board meeting held on January 11, 2019.   
    2) A Fact Sheet providing the operating metrics of the Company can be 
downloaded from www.infosys.com [http://www.infosys.com ].
    3) Other income for three months and nine months ended December 31, 2017 
includes interest on income tax refund of $31 million and $41 million 
respectively. 
    4) In the three months ended March 2018, Kallidus and Skava (together 
referred to as "Skava") and Panaya, were classified as "Held for Sale". 
Consequently, a reduction in the fair value amounting to $18 million and $39 
million in respect of Panaya was recognized for the year ended March 31, 2018 
and three months ended June 30, 2018, respectively. 
    5) During the three months ended December 31, 2018, based on evaluation of 
proposals received and progress of negotiations with potential buyers, the 
Company concluded that it is no longer highly probable that sale would be 
consummated by March 31, 2019. Accordingly, Panaya and Skava have been 
de-classified from "Held for Sale" in accordance with IFRS 5.  
      On such reclassification, the Company recognized additional depreciation 
and amortization expenses of $12 million and an adjustment in respect of excess 
of carrying amount over recoverable amount of $65 million in respect of Skava 
during the three months ended December 31, 2018. 
    6) During the nine months ended December 31, 2017, the Company has written 
down the entire carrying value of $11 million in its associate DWA Nova LLC. 
    7) During the quarter ended December 31, 2017, on account of the conclusion 
of an Advance Pricing Agreement ("APA") with the U.S. Internal Revenue Service 
("IRS"), the Company has reversed income tax expense provision of $225 million 
which pertains to previous periods which are no longer required. 
    8) Previous period share numbers and EPS have been adjusted for September 
2018 bonus issue in accordance with IAS 33, Earnings per share 

    IFRS-INR press Release:
https://www.infosys.com/investors/reports-filings/quarterly-results/2018-2019/Q3/Documents/IFRS-INR-press-release.pdf 


    Factsheet:
https://www.infosys.com/investors/reports-filings/quarterly-results/2018-2019/Q3/Documents/fact-sheet.pdf 


    Source: Infosys