Weak Retail Market Sees SSI Q3 Net Plummet 77 PC

Chennai: | Updated: Apr 30 2002, 05:30am hrs
SSI Ltd has reported a 76.98 per cent decline in net profit to Rs 4.05 crore for the third quarter ended March 2002, as against Rs 17.60 crore for the corresponding period last year. Income from operations declined 45.10 per cent to Rs 56.94 crore (Rs 103.72 crore).

During the quarter, Rs 10 crore (nil) has been charged towards depreciation of intellectual property obtained from the earlier acquisition of AlbionOrion LLC, USA. Other income boosted net profit by Rs 9.03 crore (Rs 1.75 crore).

“The retail education market continues to be weak. Unless students see software firms recruiting, they hesitate to join software education programmes. Enrolments have fallen during the quarter to about 30,492 students (58,525 students) and the average fee realisation has come down by about 15 per cent. We are now seeing the first signs of recovery in the software services business,” said Mr Kalpathi S Suresh, chairman and chief executive officer, at a news conference held here on Monday.

In Q3, revenues from software education was at Rs 20.89 crore and software services contributed Rs 36.06 crore. In the fourth quarter, the company expects the institutional education segment, which currently accounts for 17 per cent of education revenues, to drive growth. Software services will focus on increasing size of engagements and higher offshore component.

SSI is considering the demerger of its education and software business. “The synergies that existed a year ago no longer exist. Earlier, it was difficult to get quality software professionals and having an education arm helped. Currently, there is a glut of experienced programmers. In terms of differences, the education business is domestic oriented and the software business is export-oriented,” he said.

Meanwhile, total expenditure stood at Rs 43.99 crore (Rs 75.63 crore). Interest charges stood at Rs 1.26 crore (Rs 1.22 crore). Paid-up share capital remained at Rs 13.46 crore. Number of employees in software education were 793 while software services had 747. At the end of the third quarter, it had cash and cash equivalent of Rs 198.7 crore and a total debt of Rs 133.5 crore.