Sify Enterprise Solutions :: Extensity Newsletter

Sify announced its consolidated US GAAP results for the third quarter ended December 31, 2004.

Revenues grew to $21.85 million, a 33% increase over the same quarter last year.
Sify made cash profits of $1.09 million (in terms of adjusted EBITDA) compared to a cash profit of $1.02 million for the same period last year. (See the reconciliation below of Adjusted EBITDA to the Company's GAAP operating results.) solution
Adjusted EBITDA, excluding foreign exchange translation losses, for the quarter was $1.85 million, a growth of 74% over $1.07 million for the same period last year.
The company reduced its net loss for the quarter to $2.20 million from a net loss of $2.37 million for the same quarter last year.
Sify had a positive cash flow of $0.47 million after capital expenditures of $3.33 million. This is Sify's fifth consecutive quarter of being free cash flow positive.
Cash balance at the end of the quarter was $36.7 million.

Mr. R Ramaraj, Managing Director and CEO, Sify, said, "Our revenues continue to grow steadily. We are confident that the investments made in the last quarter to expand our network to support our large enterprise wins, and to establish resources for our International Remote Infrastructure Management Services will translate into additional revenue streams in the future. The alliance with Global Crossing has started to benefit our customers with extended global reach as they pursue international business opportunities, while Global Crossing's customers will benefit from reach across India. We continue to grow our revenues while increasing efficiencies to generate cash from operations. We are pleased that this was the fifth consecutive quarter where we have been free cash flow positive."

Mr. George Zacharias, President and COO, said, "We continue to grow our corporate businesses, both new customers and additional business from existing customers. We also increased the number of our iWay cyber cafŽs, and grew the broadband customer base. Our portal business developed a revamped, new home page on www.sify.com. Revenues from content services for mobile telephones continued strong growth over the previous quarter, as well as the number of advertisers on the portal. In addition, we have renewed advertising alliances with major online service providers such as Monster.com."

New orders for Internet connectivity services were received from Airtel, Cable & Wireless, India Comnet and Mastek. IP VPN service contracts were signed with Elder Pharma, Khaitan and Nestle. Repeat contracts were received from Amazon, CLI3L, GE, Google, MensaMind, MindTree, Oracle and Satyam for Internet connectivity services. Orders for IP VPN services were extended by major customers such as HDFC Standard Life, Hutch, Group 4, Perfetti and Wipro.

Sify further strengthened its presence in the Retail Distribution segment by integrating 26 stores of Vishal Megamart, a leading chain of retail stores in Northern India. Services to Vishal stores include video conferencing and data connectivity between the stores. We were also contracted for the integration of Hutch shops, a mobile shopping initiative of one of the premium mobile service providers in India.

In December 2004, the Department of Telecommunications (DoT) issued guidelines for amending the ISP licenses to include IP VPN services. The new guidelines require an entry fee of Rs. 100 Million ($2.31 million) to amend the license and an annual fee of 8% of Adjusted Gross Revenues. The Internet Industry body in India is expected to file an appeal against DoT's decision. However, in order to eliminate market uncertainties for our IP VPN services business, Sify paid the Rs. 100 Million entry fee in early January 2005.

Sify's alliance with Global Crossing led to new contracts with customers including Equinox, GECIS and Seaton.

Two leading consumer product manufacturers, Pidilite Industries and Perfetti Van Melle India, selected Forum, Sify's supply chain solution, for managing their distribution operations across India.