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Businesswire

Wipro Limited Announces Results for the Quarter and Year Ended March 31, 2018 Under IFRS

by businesswireindia.com

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Business Wire India
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for its quarter and year ended March 31, 2018.
 
Highlights of the Results

Results for the Year ended March 31, 2018:
  • Gross Revenue was Rs 544.9 billion ($8.4 billion1), a decline of 1.0% YoY.
  • IT Services Segment Revenue was $8,060.2 million, an increase of 4.6% YoY.
  • Non-GAAP constant currency IT Services Segment Revenue grew 2.9% YoY.
  • IT Services Segment Revenue in Rupee terms remained flat at Rs 528.4 billion ($8.1 billion1).
  • IT Services Margin was 15.8%. Excluding the impact of insolvency of two customers and the impairment loss in one of our acquisitions, IT Services Margin for the year was 16.8%*.
  • Net Income3 was Rs 80.1 billion ($1.2 billion1), a decrease of 5.7% YoY.
Results for the Quarter ended March 31, 2018:
  • Gross Revenue was Rs 137.7 billion ($2.1 billion1), an increase of 0.7% sequentially.
  • IT Services Segment Revenue in dollar terms was $2,062.0 million, up 2.4% sequentially and 5.5% YoY.
  • Non-GAAP constant currency IT Services Segment Revenue grew 1.1% sequentially and 2.5% YoY.
  • IT Services Segment Revenue in Rupee terms at Rs 134.1 billion ($2.1 billion1), an increase of 1.3% sequentially.
  • IT Services Margin for the quarter was 14.4%. Excluding the impact of insolvency of a customer and the impairment loss in one of our acquisitions, IT Services Margin for the quarter was 16.0%*.
  • Net Income3 for the quarter was Rs 18.0 billion ($277 million1).
Performance for the quarter and year ended March 31, 2018

Abidali Z. Neemuchwala, CEO and Member of the Board said – “Our investments in Digital and our efforts in client mining are paying off well. Our strong order bookings in the last two quarters provide us the right foundation to grow as we progress through the year.”
 
Jatin Dalal, Chief Financial Officer said – “We continue to make progress in our client mining, with number of clients contributing revenues over $75 million increasing from 17 to 20 during the quarter. Our investments in Wipro HOLMESTM and our automation suite are resulting in consistent productivity improvements. We generated robust Operating Cash Flows of Rs 84 billion at 105% of our Net Income in FY18.”

Outlook for the Quarter ending June 30, 2018

We expect Revenue from our IT Services business to be in the range of $2,015 million to $2,065 million*. We had announced the divestiture of our hosted data center services business to Ensono for a consideration of $405 million. We expect the transaction to complete during the quarter ending June 30, 2018. For the purpose of the Outlook, we have not considered the impact of the divestment on the Revenue for the quarter ending June 30, 2018. We will revise the Outlook for the quarter based on the actual date of completion of the divestment.
 
* Outlook is based on the following exchange rates: GBP/USD at 1.39, Euro/USD at 1.24, AUD/USD at 0.78, USD/INR at 65.12 and USD/CAD at 1.27.
 
Capital Allocation:
The Board of Directors at its meeting held on January 19, 2018, had declared an interim dividend of Rs 1 per equity share for the financial year 2017–18. The Board recommends adoption of the interim dividend as the final dividend for the financial year 2017–18. Thus, the total dividend for the financial year 2017–18 remains Rs 1 per equity share. We also completed a buyback of Rs 110,000 million in December 2017.
 
IT Services

We signed a definitive agreement to divest Wipro’s hosted data center services business to Ensono, a leading hybrid IT services provider, for USD 405 million. Wipro will unlock value by transitioning eight data centers and over 900 employees of its hosted data center services business to Ensono. As part of the agreement, Wipro will make a strategic investment of USD 55 million in Ensono’s combined entity.
 
Wipro continued its momentum in winning large deals globally as described below:
 
A leading North American healthcare technology company has chosen Wipro as a strategic partner to help enhance its services and solutions, consolidate operations and grow the scale and scope of their offerings. Leveraging the Wipro HOLMESTM platform, Wipro will implement digital solutions that harness the power of cognitive computing, machine learning and hyper-automation. This engagement will help the client address the emerging needs of the industry as they work towards enabling a more value-based healthcare system.
 
Wipro has won a multi-year infrastructure transformation deal in the Securities & Capital Markets domain from a global financial services firm. The deal encompasses hybrid cloud management services, workplace services, cybersecurity operations, and cloud-enabled transformation, and will standardize and modernize IT operations across the client’s lines of business. In addition to leveraging Wipro's expertise in infrastructure operations transformation, the engagement will be powered by Wipro HOLMESTM for intelligent automation, and analytics-driven insights.

Wipro has won a multi-year contract from a leading German automotive company to transform and operate a large advanced analytics platform. The program will foster business agility and scalability for the client through transformation of enterprise operations and data-driven business insights.
 
A leading network equipment provider has selected Wipro to enhance its Internet Protocol products. Wipro will develop next-generation platforms for the client as well as support their existing product portfolio.
 
Digital highlights

We continue to see increasing traction in digital oriented deals as illustrated below:
 
A national U.S. retailer has hired Wipro Digital to support the ongoing development of its new omnichannel B2B platform and website. Wipro Digital’s Buildit engineering team will partner with the retailer to introduce new approaches and agile methodologies to enhance the user experience.
 
A North American healthcare company has chosen Wipro as its digital transformation partner to digitize and improve its partner experience to take advantage of the evolving business models in the healthcare industry. The project will leverage the offerings of Wipro Digital and its strategic design firm Designit – in product design, product branding and technology implementation.
 
Designit and Wipro Digital undertook a strategic design engagement to reimagine the merchant onboarding process for a large credit card processing firm. The extensive desk and field research resulted in the development of a reimagined onboarding experience. The new platform will help the client differentiate and remain competitive in a highly disrupted industry.
 
Wipro continues to win deals in the cloud applications space by leveraging Appirio Cloud Services:
  • A large US-based healthcare company has selected Wipro to support the consolidation and standardization of its CRM processes;
  • Wipro was selected by a social purpose-driven software company to standardize the user experience of their organization and its sub-brands on a cloud platform;
  • A global financial services firm has selected Wipro to upgrade its existing CRM solution; and
  • An international non-profit organization has chosen Wipro to transform its financial accounting processes.
Analyst Accolades and Awards

Wipro was positioned as a Leader in the NelsonHall Big Data & Analytics NEAT Report 2017.
 
Wipro won the ‘Best Blockchain Application of the Year’ award at the Global Logistics Excellence Awards 2018.
 
Wipro was recognized as the leading AI Partner for 2017 by Intel Corporation at the Intel AI and HPC Ecosystem Summit 2018, for driving transformational outcomes for clients, by leveraging solutions powered by Wipro HOLMESTM and Intel’s AI-optimized hardware platforms.
 
Wipro was recognized at the 14th Annual 2018 Info Security Product Guide's Global Excellence Awards®, in three categories – Managed Security Services, Security Products and Solutions for Enterprise (Large) and Identity Management.
 
All product names, logos, and brands are property of their respective owners.
 
IT Products
  • IT Products Segment Revenue for the quarter ended March 31, 2018 was Rs 4.2 billion ($64 million1).
  • IT Products Segment Revenue for the year ended March 31, 2018 was Rs 18.0 billion ($276 million1).
  • IT Products Margin for the year was 2.0%.
Please refer to tables at the end for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.
 
About Non-GAAP financial measures

This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.
 
The table at the end of the release provides IT Services Revenue on a constant currency basis, which is a non-GAAP financial measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance.
 
This non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS, and may be different from non-GAAP measures used by other companies. In addition to this non-GAAP measure, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.
 
Results for the quarter and year ended March 31, 2018, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com
 

Quarterly Conference Call
 

We will hold an earnings conference call today at 07:15 p.m. Indian Standard Time (09:45 a.m. U.S. Eastern Time) to discuss our performance for the quarter. The audio from the conference call will be available online through a web-cast and can be accessed at the following link- http://services.choruscall.eu/links/wipro180425.html
 
An audio recording of the management discussions and the question and answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com
 

About Wipro Limited 
 

Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) is a leading global information technology, consulting and business process services company. We harness the power of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging technologies to help our clients adapt to the digital world and make them successful. A company recognized globally for its comprehensive portfolio of services,  strong  commitment to sustainability and good corporate citizenship, we have over 160,000 dedicated employees serving clients across six continents. Together, we discover ideas and connect the dots to build a better and a bold new future.

Forward-looking statements

The forward-looking statements contained herein represent Wipro’s beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipro’s control. Such statements include, but are not limited to, statements regarding Wipro’s growth prospects, its future financial operating results, and its plans, expectations and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, complete proposed corporate actions, intense competition in IT services, our ability to maintain 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, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our business and industry. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We 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. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.
 
  1. For the convenience of the readers, the amounts in Indian Rupees in this release have been translated into United States Dollars at the certified foreign exchange rate of US$1 = Rs 65.11, as published by the Federal Reserve Board of Governors on March 31, 2018. However, the realized exchange rate in our IT Services business segment for the quarter ended March 31, 2018 was US$1= Rs 65.04
  2. Segment Profit refers to Segment Results Total.
  3. Net Income refers to ‘Profit for the period attributable to equity holders of the Company.
  4. * For the year, we recognized provisions totaling Rs 5,255 million ($81 million1) with respect to insolvency of two customers and the impairment loss in one of our acquisitions. For the quarter, we recognized provisions totaling Rs 2,080 million ($32 million1) with respect to insolvency of a customer and the impairment loss in one of our acquisitions.
Wipro Limited and Subsidiaries
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
(Rupees in millions, except share and per share data, unless otherwise stated)
             
  As of March 31,   As of March 31,
    2017   2018   2018
             Convenience translation into US dollar in millions (unaudited) Refer footnote
ASSETS            
Goodwill                       125,796                        117,584                                     1,806
Intangible assets                         15,922                         18,113                                        278
Property, plant and equipment                         69,794                         64,443                                        990
Derivative assets                              106                               41                                           1
Investments                           7,103                           7,668                                        118
Investment in equity accounted investee                                –                             1,206                                          19
Trade receivables                           3,998                           4,446                                          68
Deferred tax assets                           3,098                           6,908                                        106
Non-current tax assets                         12,008                         18,349                                        282
Other non-current assets                         16,793                         15,726                                        242
Total non-current assets                        254,618                       254,484                                     3,910
             
Inventories                           3,915                           3,370                                          52
Trade receivables                         94,846                        100,990                                     1,551
Other current assets                         30,751                         30,596                                        469
Unbilled revenues                         45,095                         42,486                                        653
Investments                        292,030                        249,094                                     3,826
Current tax assets                           9,804                           6,262                                          96
Derivative assets                           9,747                           1,232                                          19
Cash and cash equivalents                         52,710                         44,925                                        690
                       538,898                      478,955                                    7,356
Assets held for sale                                –                           27,201                                        418
Total  current assets                      538,898                      506,156                                    7,774
             
TOTAL ASSETS                      793,516                      760,640                                  11,684
             
EQUITY            
Share capital                           4,861                           9,048                                        139
Share premium                              469                              800                                          12
Retained earnings                        490,930                        453,265                                     6,962
Share based payment reserve                           3,555                           1,772                                          27
Other components of equity                         20,489                         18,051                                        277
Equity attributable to the equity holders of the Company                        520,304                        482,936                                     7,417
Non-controlling interest                           2,391                           2,410                                          37
TOTAL EQUITY                       522,695                      485,346                                    7,454
             
LIABILITIES            
Long – term loans and borrowings                         19,611                         45,268                                        695
Derivative liabilities                                 2   7                                          –  
Deferred tax liabilities                           6,614                           3,059                                          47
Non-current tax liabilities                           9,547                           9,220                                        142
Other non-current liabilities                           5,500                           4,230                                          65
Provisions                                 4                                 3                                          –      
Total non-current liabilities   41,278                            61,787                                        949
             
Loans, borrowings and bank overdrafts                        122,801                         92,991                                     1,428
Trade payables and accrued expenses                         65,486                         68,129                                     1,047
Unearned revenues                         16,150                         17,139                                        264
Current tax liabilities                           8,101                           9,417                                        145
Derivative liabilities                           2,708                           2,210                                          34
Other current liabilities                         13,027                         16,613                                        256
Provisions                           1,270                              796                                          12
                       229,543                      207,295                                    3,186
Liabilities directly associated with assets held for sale                                –                             6,212                                          95
Total current liabilities                      229,543                      213,507                                    3,281
             
TOTAL LIABILITIES                      270,821                      275,294                                    4,230
             
TOTAL EQUITY AND LIABILITIES                      793,516                      760,640                                  11,684
      Wipro Limited and Subsidiaries          
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME
(Rupees in millions, except share and per share data, unless otherwise stated)
                     
                     
                     
     Three months ended March 31,     Year ended March 31,    
  2017 2018   2018   2017 2018   2018
           Convenience translation into US dollar in millions (unaudited) Refer Footnote 1           Convenience translation into US dollar in millions (unaudited) Refer Footnote 1 
Gross revenues             139,875               137,686                   2,115              550,402               544,871                     8,368
Cost of revenues           (100,771)               (97,794)                 (1,502)             (391,544)             (385,575)                    (5,922)
Gross profit             39,104               39,892                    613             158,858            159,296                      2,446
                     
Selling and marketing expenses             (11,836)               (11,263)                     (173)               (40,817)               (42,349)                       (650)
General and administrative expenses               (7,267)                 (9,801)                     (151)               (32,021)               (34,141)                       (524)
Foreign exchange gains/(losses), net                    745                     557                          9                  3,777                    1,488                           23
Other Operating Income                4,082                       –                            –                    4,082                         –                              –  
                     
Results from operating activities             24,828               19,385                     298               93,879              84,294                      1,295
                     
Finance expenses               (1,170)                 (1,564)                       (24)                 (5,942)                 (5,830)                         (90)
Finance and other income                 5,753                  4,803                        74                 22,419                  23,999                         369
Share of profits/(loss) of equity accounted investee                     –                         (3)                         –                         –                           11                            –  
Profit before tax                29,411               22,621                     348              110,356               102,474                     1,574
Income tax expense               (6,742)                 (4,615)                       (71)               (25,213)               (22,390)                       (344)
Profit for the period                22,669               18,006                       277                 85,143                 80,084                      1,230
                     
Attributable to:                    
Equity holders of the Company               22,611                 18,028                       277                 84,895                  80,081                      1,230
Non-controlling interest                     58                     (22)                         –                       248                          3                            –  
Profit for the period             22,669               18,006                     277               85,143              80,084                     1,230
                     
                     
Earnings per equity share:                    
Attributable to equity share holders of the Company                    
Basic                4.68                    4.00                      0.06                  17.48                    16.86                         0.26
Diluted                4.66                    4.00                      0.06                  17.43                    16.83                         0.26
                     
Weighted average number of equity shares used in                    
computing earnings per equity share                    
Basic
4,835,568,066
     4,503,353,231        4,503,353,231      4,857,081,010        4,750,043,400           4,750,043,400
Diluted  
4,849,694,210
     4,511,906,041        4,511,906,041      4,871,347,138        4,758,361,975           4,758,361,975
Additional Information                    
Segment Revenue                    
IT Services Business Units                    
BFSI               34,911                 39,013                       599               135,967                148,062                 2,274
HLS               20,456                 18,575                       285                 82,242                  74,177                 1,139
CBU               21,204                 21,029                       323                 83,417                  83,762                 1,286
ENU               17,515                 16,768                       258                 68,883                  68,427                 1,051
MNT               30,657                 30,870                       474               119,175                120,272                 1,847
COMM               9,278                 7,864                     121               38,756              33,710                   518
IT SERVICES TOTAL             134,021               134,119                    2,060               528,440                528,410                  8,115
IT PRODUCTS                6,613                  4,169                        64                 25,922                  17,998                     276
RECONCILING ITEMS                 (14)                    (45)                      (1)                  (183)                   (49)                      (1)
TOTAL            140,620             138,243                  2,123             554,179            546,359                    8,390
                     
Other operating Income                    
IT Services                4,082                         4,082      
IT Products                    
Segment Result                    
IT Services Business Units                    
BFSI                5,153                 6,298                       97               24,939              24,626                       378
HLS                   (11)                 1,824                       28                 9,479                9,620                       148
CBU                3,719                 3,013                       46               14,493              13,060                       201
ENU                4,097                 2,286                       35               14,421                8,060                       124
MNT                5,969                 5,475                       84               23,453              21,742                       334
COMM                1,449                  (753)                    (12)                 6,149                3,158                         49
OTHERS                     –                         –                         –                         –                       –      
Other Operating Income                4,082                          4,082      
UNALLOCATED                   811                 1,180                       18                  (951)                3,347                         51
TOTAL IT SERVICES              25,269               19,323                     296               96,065              83,613                    1,285
IT PRODUCTS                (428)                      48                         1               (1,680)                   362                           6
RECONCILING ITEMS                  (13)                      14                       –                    (506)                   319                           5
TOTAL              24,828               19,385                     297               93,879              84,294                    1,295
FINANCE EXPENSE             (1,170)               (1,564)                    (24)               (5,942)              (5,830)                     (90)
FINANCE AND OTHER INCOME                5,753                 4,803                       74               22,419              23,999                     369
SHARE OF PROFIT/(LOSS) OF EQUITY ACCOUNTED INVESTEE                     –                        (3)                     –                         –                        11                         0
PROFIT BEFORE TAX              29,411               22,621                     347              110,356            102,474                  1,575
INCOME TAX EXPENSE             (6,742)               (4,615)                    (71)             (25,213)            (22,390)                   (344)
PROFIT FOR THE PERIOD             22,669               18,006                     276               85,143              80,084                  1,231
                     
Segment result represents operating profits of the segments and dividend income and gains or losses (net) relating to strategic investments, which are presented within “Finance and other income” in the statement of Income.

"The Company is organized by the following operating segments; IT Services and IT Products.

The IT Services segment primarily consists of IT Service offerings to customers organized by industry verticals. The industry verticals are as follows: Banking, Financial Services and Insurance (BFSI), Healthcare and Lifesciences (HLS), Consumer Business Unit (CBU), Energy, Natural Resources and Utilities (ENU), Manufacturing & Technology (MNT), Communications (COMM). IT Services segment also includes Others which comprises dividend income relating to strategic investments, which are presented within “Finance and other income” in the statement of Income. Key service offerings to customers includes software application development and maintenance, research and development services for hardware and software design, business application services, analytics, consulting, infrastructure outsourcing services and business process services.In the IT Products segment, the Company is a value added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables."                                
 
Reconciliation  of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)
Three Months ended March 31, 2018    
IT Services Revenue as per IFRS $      2,062.0       IT Services Revenue as per IFRS   $        2,062.0
Effect of Foreign currency exchange movement $       (26.6)       Effect of Foreign currency exchange movement   $          (58.0)
Non-GAAP Constant Currency IT Services Revenue based on previous quarter exchange rates $       2,035.4       Non-GAAP Constant Currency IT Services Revenue based on previous year exchange rates   $        2,004.0
                     
Reconciliation  of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($MN)
Year ended March 31, 2018    
IT Services Revenue as per IFRS $     8,060.2            
Effect of Foreign currency exchange movement $     (131.0)            
Non-GAAP Constant Currency IT Services Revenue based on previous quarter exchange rates $    7,929.2            
                     

Source: Businesswire