Sify bleeds less, but losses mount

Our eFE Bureau in Chennai

Nasdaq-listed Satyam Infoway on Wednesday reported a marginal decrease in cash loss of $4.8 million (Rs 23.04 crore) for the second quarter ended September 2001, as against $4.9 million (Rs 23.5 crore) for the corresponding quarter last year.

Net loss after amortisation of goodwill/investment written off stood at $117.00 million-Rs 561.60 crore ($12.9 million- Rs 61.9 crore), due to write off of $109 million (Rs 523 crore) goodwill and acquisition costs. Topline grew to $10.9 million - Rs 52.30 crore crore ($9 million- Rs 43.2 crore).

The Internet and e-commerce company took advantage of the opportunity presented by the consistent low market value of its stock and ISP market in general to write off its goodwill for the acquisitions including Indiaworld ($78 million), India Plaza ($23 million) and Cricinfo ($23 million), so that it can show a healthy profit in the coming quarters. The company is also further getting ready for strategic acquisitions and alliances in areas they are not present - for instance P&G’s Masti.com - a youth portal.

In fact, Mr R Ramaraj, managing director and chief executive officer of Sify has been travelling through the last one month negotiating such deals, apart from looking for new business. “We will grow organically and through acquisitions”, said Mr Ramaraj.

On a sequential quarter basis, revenues have shown a 16 per cent increase. During the quarter, the company was able to reduce its cash loss to $4.8 million, as against $6.1 million during the preceding quarter. The cash burn rate during the quarter was $4.6 million, down 40 per cent from the preceding quarter.

“A healthy combination of growth in revenue, reduction in costs and tight management of working capital has been the main accomplishment this quarter,” Mr Ramaraj said.

Corporate services accounted for a major portion of the revenues at $6.6 million ($5.6 million), retail Internet access chipped in $3.0 million ($2.6 million), portal revenues $1.1 million (0.8 million). The retail net access base grew to 5,50,000. The number of ‘Iway’ cybercafes grew to 520 from 427 last quarter.

The rollout of fixed wireless broadband connectivity services continues in key cities.