Satyam Infoway net loss down 5.5%

CHENNAI: Satyam Infoway Ltd on Friday reported its net loss for the

April-June quarter declined 5.5 per cent from the previous quarter, signaling it

was on track to break even. India's leading private Internet services firm

reported a loss of $17.1 million in the first quarter (April-June) versus a loss

of $18.1 million in January-March, which is the fourth quarter of the company's

financial year.

The Chennai-based firm is majority-owned by Satyam Computer Services, India's

fourth-largest software exporter. Satyam also runs Internet access and portals

businesses. The net loss per American Depositary Receipt (ADR) eased to $0.18 in

the quarter, from $0.20 in the fourth quarter last year.

Total revenue, however, declined 20.2 per cent quarter-on-quarter to $9.5

million, on account of lower revenue from its Internet consulting and services

businesses. "The decline in EBITDA (cash) loss for the second consecutive

quarter, at $6.3 million from $7.3 million in the preceding quarter shows that

the firm is absolutely on the right track towards breaking-even," an

analyst with a foreign brokerage said.

Operating loss at the company broke a trend and narrowed for the first time

to $7.3 million in January-March, from $8.5 million in the previous quarter. The

analyst said the decline in sales revenues appeared to be mainly on account of a

large one-time web-solutions order the firm had bagged from India's largest

bank, State Bank of India Ltd, in the fourth quarter last year.

"The SBI order, which was worth about Rs 80 million ($1.7 million),

appears to have been the predominant cause for the lower revenues, with the

overall slowdown also affecting sales and I see growth continuing but at a

slower pace," the analyst added. The company's ADRs, each representing

one-fourth of an underlying share, were trading up 2.7 percent at $2.26 in early

Friday trade following the announcement.

The ADR is up 3.7 per cent from its 52-week low of $2.18 on July 18, but a

whopping 89.4 per cent lower than its 52-week high of $21.31 on September 5. A

firm statement quoted Satyam Infoway managing director and chief executive R.

Ramaraj as saying that he expected sales revenues to grow by 20 per cent in the

second quarter.

"This quarter marks the second strong signal of Sify's path to

profitability and maturity. Cash burn has come down to one-half of last

quarter," he said. Cash burn, or the net reduction in cash during the

quarter, stood at $7.9 million, down nearly 50 percent from $15.6 million in the

preceding quarter.

(C) Reuters Limited 2001.