Infosys (NYSE: INFY) Announces Results for the Quarter Ended September 30, 2018

Infosys (NYSE: INFY) Announces Results for the Quarter Ended September 30, 2018

PR Newswire

BENGALURU, India, October 16, 2018

BENGALURU, India, October 16, 2018 /PRNewswire/ --

Broad-based Growth and Digital Resulted in a Strong Q2 19  

"We are delighted with our broad-based growth across all business segments and geographies during the quarter. This is a testimony to our strong client relationships, digital led full service capabilities, and intense focus on the needs of our clients," said Salil Parekh, CEO and MD. "Large deal wins at over $2 billion during the quarter demonstrate our increased client relevance and also give us better growth visibility for the near-term."

     (Logo: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg )

*USD/INR exchange rate as of September 30, 2018 

  1. Financial Highlights- Consolidated results under International Financial Reporting Standards (IFRS)

- For the Quarter ended September 30, 2018 

- For six months ended September 30, 2018 

"We had another quarter of solid operating parameters with utilization being stable and offshore mix improving to all-time high," said U B Pravin Rao, COO. "Our Digital services grew double digits sequentially, while growth in top clients was also robust."

"Our unwavering focus on strong financial performance on multiple fronts continued to deliver results during the quarter. Operating margins for the quarter as well as for the half year was at 23.7%, near the top end of our guidance band," said M.D. Ranganath, CFO. "Operating Cash Flow was over $1 billion during the first half of the year and ROE was at 24.7%. We will continue to make strategic investments in digital to leverage opportunities and at the same time keep sharp focus on key operational efficiency parameters."

2. Bonus issue of equity shares 

The Company has allotted 2,18,41,91,490 fully paid up equity shares of face value ₹5/- each during the three months ended September 30, 2018 pursuant to a bonus issue approved by the shareholders through postal ballot. The bonus shares have been issued to celebrate 25th year of public listing in India and to further increase the liquidity of its shares. Bonus share of one equity share for every equity share held, and a bonus issue, viz., a stock dividend of one American Depositary Share (ADS) for every ADS held, respectively, has been allotted. Consequently, the ratio of equity shares underlying the ADSs held by an American Depositary Receipt holder remains unchanged.


3. Acquisitions 

4. Update on arbitration proceedings 

On September 17, 2018 the Arbitral Tribunal of Hon'ble Justice R.V. Raveendran (retired) communicated the decision with regard to the dispute between Infosys Ltd. and its former CFO Mr. Rajiv Bansal. The Company has received legal advice and will comply with the award and make the necessary payments.


5. Shareholder visit to Mysuru campus 

Shareholders of the Company are being offered an opportunity to visit the Company's campus in Mysuru on November 24, 2018. Shareholders who would like to avail this opportunity need to register at http://www.infosys.com  between October 25, 2018 and November 15, 2018. As the number of shareholders the company can host on this visit are limited, shareholders will be accommodated on a first come, first serve basis. This visit is for shareholders only, and is not extended to family and friends. This follows several requests made by shareholders to visit the Company campus. The Company will provide transport from its registered office in Electronics City, Bengaluru and incur all associated costs for this visit from Bengaluru to Mysuru.

About Infosys 

Infosys is a global leader in next-generation digital services and consulting. We enable clients in 45 countries to navigate their digital transformation. With over three decades of experience in managing the systems and workings of global enterprises, we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.

Visit http://www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor 

Certain statements mentioned in this release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect 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, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2018. These filings are available at http://www.sec.gov . Infosys 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. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company unless it is required by law.

Infosys Limited and subsidiaries  

Audited Condensed Consolidated Balance Sheet as at 

             


                                            (Dollars in millions except equity share data)
                                                             September 30,
                                                                  2018      March 31, 2018

                                                     ASSETS
                                             Current assets
                                  Cash and cash equivalents          2,462           3,041
                                        Current investments          1,046             982
                                          Trade receivables          2,039           2,016
                                           Unbilled revenue            716             654
                       Prepayments and other current assets            662             662
                           Derivative financial instruments              3               2
                                                                     6,928           7,357
                                    Assets held for sale(3)            270             316
                                       Total current assets          7,198           7,673
                                         Non-current assets
                              Property, plant and equipment          1,707           1,863
                                                   Goodwill            344             339
                                          Intangible assets             50              38
                                    Investment in associate              -               -
                                    Non-current investments            713             883
                                 Deferred income tax assets            188             196
                                          Income tax assets            839             931
                                   Other non-current assets            249             332
                                   Total non-current assets          4,090           4,582
                                               Total assets         11,288          12,255
                                     LIABILITIES AND EQUITY
                                        Current liabilities
                                             Trade payables            164             107
                           Derivative financial instruments             43               6
                             Current income tax liabilities            200             314
                                            Client deposits             12               6
                                           Unearned revenue            332             352
                               Employee benefit obligations            214             218
                                                 Provisions             85              75
                                  Other current liabilities          1,080           1,036
                                                                     2,130           2,114
       Liabilities directly associated with assets held for
                                                    sale(3)             48              50
                                  Total current liabilities          2,178           2,164
                                    Non-current liabilities
                            Deferred income tax liabilities             66              82
                               Employee benefit obligations              6               7
                              Other non-current liabilities             50              42
                                          Total liabilities          2,300           2,295
                                                     Equity
          Share capital- ₹5($0.16) par value 4,800,000,000
       (2,400,000,000) equity shares authorized, issued and
          outstanding 4,347,452,598 (2,173,312,301), net of
    20,930,382 (10,801,956) treasury shares as at September
                    30, 2018 (March 31, 2018), respectively            340             190
                                              Share premium            261             247
                                          Retained earnings         11,285          11,587
                                    Cash flow hedge reserve            (3)               -
                                             Other reserves            348             244
                                 Capital redemption reserve              9               9
                                 Other components of equity        (3,252)         (2,317)
         Total equity attributable to equity holders of the
                                                    company          8,988           9,960
                                  Non-controlling interests              -               -
                                               Total equity          8,988           9,960
                               Total liabilities and equity         11,288          12,255

Infosys Limited and subsidiaries 

Audited Condensed Consolidated Statement of Comprehensive Income for the
                                                                                                 


                       (Dollars in millions except equity share and per equity share data)
                                    Three months  Three months    Six months   Six months
                                           ended         ended         ended        ended
                                       September September 30, September 30,    September
                                        30, 2018          2017          2018     30, 2017

                           Revenues        2,921         2,728         5,753        5,379
                      Cost of sales        1,884         1,743         3,703        3,435
                       Gross profit        1,037           985         2,050        1,944
                Operating expenses:
     Selling and marketing expenses          154           132           303          269
            Administrative expenses          191           194           384          377
           Total operating expenses          345           326           687          646
                   Operating profit          692           659         1,363        1,298
                  Other income, net          105           137           212          263
     Reduction in the fair value of
    Disposal Group held for sale(3)            -             -          (39)            -
      Share in net profit/(loss) of
               associate, including
                      impairment(4)            -             -             -         (11)
         Profit before income taxes          797           796         1,536        1,550
                 Income tax expense          216           218           420          431
                         Net profit          581           578         1,116        1,119
         Other comprehensive income
             Items that will not be
       reclassified subsequently to
                    profit or loss:
         Re-measurements of the net
                    defined benefit
               liability/asset, net            1             1             1            1
         Equity instruments through
    other comprehensive income, net            2             -             2            -
    Items that will be reclassified
    subsequently to profit or loss:
     Fair valuation of investments,
                                net          (2)             2           (9)            6
              Fair value changes on
     derivatives designated as cash
                    flow hedge, net          (4)             3           (3)          (7)
       Foreign currency translation        (461)         (107)         (929)         (47)
          Total other comprehensive
          income/(loss), net of tax        (464)         (101)         (938)         (47)
         Total comprehensive income          117           477           178        1,072

            Profit attributable to:
              Owners of the Company          581           578         1,116        1,119
          Non-controlling interests            -             -             -            -
                                             581           578         1,116        1,119
         Total comprehensive income
                   attributable to:
              Owners of the Company          117           477           178        1,072
          Non-controlling interests            -             -             -            -
                                             117           477           178        1,072
       Earnings per equity share(5)
                          Basic ($)         0.13          0.13          0.26         0.24
                        Diluted ($)         0.13          0.13          0.26         0.24
     Weighted average equity shares
     used in computing earnings per
                       equity share
                                                               
                         Basic     4,347,055,177 4,571,730,722 4,346,857,296 4,571,524,372          
                       Diluted     4,352,208,472 4,575,052,366 4,351,915,210 4,575,765,068                         
                                               

NOTES:  

  1. The audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the three months and half year ended September 30, 2018 have been taken on record at the Board meeting held on October 16, 2018  

  2.  A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com


3. During the three months ended June 30, 2018, on remeasurement, including consideration of progress in negotiations on offers from prospective buyers for Panaya, the Company has recorded a reduction in the fair value of Disposal Group held for sale amounting to $39 million in respect of Panaya. Consequently, profit for the half-year ended September 30, 2018 has decreased by $39 million, resulting in a decrease in Basic earnings per equity share by $0.01 (adjusted for September 2018 bonus issue) for the half-year ended September 30, 2018 


4. During the quarter ended June 30, 2017, the Company has written down the entire carrying value of the investment in its associate DWA Nova LLC amounting to $11 million 


5. Previous period share numbers and EPS have been adjusted for September 2018 bonus issue in accordance with IAS 33, Earnings per share 


IFRS-INR Press Release: https://www.infosys.com/investors/reports-filings/quarterly-results/2018-2019/Q2/Documents/IFRS-INR-press-release.pdf

Fact Sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2018-2019/Q2/Documents/fact-sheet.pdf   


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