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August 27, 2001
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Money > Reuters > Report August 27, 2001 |
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'SSI hit by training slowdown'SSI Ltd's earnings had been hit by a sharp fall in the revenue and margins of its training division on the back of a slowdown, the head of the computer training and services company said on Monday. "Given that the April-June quarter is traditionally a quarter when education does very well, our revenues in education actually fell eight per cent on quarter and the operating margin was just over 10 per cent," SSI chief executive Kalpathi Suresh told reporters on an earnings conference call. He said the average operating margin in the education business for the full year to June was 22.2 per cent. Earlier on Monday, the firm stunned investors with a net loss for the quarter, which sent its shares tumbling as much as 15.5 per cent. SSI posted a loss of Rs 144.58 million due to an extraordinary write-off of Rs 200 million for the diminution in value of a strategic investment in Netfinex.com India Ltd, an Internet-based securities trading firm. The firm, which posted sales of Rs 898.4 million in the quarter to June, said its training division contributed over 57.8 per cent of revenues at Rs 519.1 million. Suresh said the training business had been hurt by an industry-wide fall in demand, sparked by the technology slowdown in the key US market. "The overall education market has shrunk by about 20 to 25 per cent and we believe that though there is still a little bit of settling happening in the market, it has more or less bottomed out in July." Suresh said the firm's technology division had also seen fourth quarter revenues fall by over Rs 60 million quarter-on-quarter. He said a significantly higher level of depreciation, made on account of a transfer of $51.38 million in intangible assets from an acquired US firm, AlbionOrion Company, had also hit the firm's fourth-quarter earnings. "Depreciation in the fourth quarter went up to Rs 156 million from about Rs 60 million in the preceding quarter mainly on account of depreciation of the AOC IPRs (intellectual property rights), which we will be depreciating over the next six years."
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