Subex extended its losses for the September quarter to Rs 71.6 crore as the telecom software product firm was under pressure due to premature redemption of foreign currency convertible bonds (FCCBs). It had posted a loss of Rs 34.83 crore in the corresponding quarter a year ago.
In spite of having a profit before interest, tax and depreciation (PBITD) of about Rs 21 crore, the company had to pay out close to Rs 71 crore towards the premature redemption of FCCBs it had raised earlier. Subex had raised close to $180 million through FCCBs to part-finance the acquisition of Syndesis. The FCCBs were up for redemption in 2012.
The Bangalore-headquartered company said, “The actual exchange loss/gain, if any, on redemption would be determined based only on the exchange rates prevailing on the date of redemption and the number of FCCBs redeemed. Hence, losses on restatement of FCCBs, which is a non-cash item for the quarter, is treated as an exceptional item.”
However, the company’s revenue grew 30 per cent to Rs 142.2 crore y-o-y, with products revenue contributing Rs 112.7 crore, representing an increase of 57 per cent. The strong revenue growth is indicative of the fact that despite the global credit crunch, telecom service providers, who are mostly the clients of companies such as Subex, have not cut down their IT budget to a great extent.
CEO and MD Subash Menon said, “Business is continuing to improve as indicated by the significantly high order intake at $26 million. We are very pleased with this increased level of business, despite the worsening economic environment, indicating that telecom software has not been impacted.”