SSI net profit dips, pays 60 p.c.

By Our Special Correspondent

CHENNAI, AUG. 28. SSI has reported a net profit of Rs. 55.80 crores for the year ended June 30, 2001, down from Rs. 56.93 crores, on an income from operations of Rs. 410.51 crores (Rs. 197.52 crores).

The board has recommended a 40 per cent dividend for the year ended June 2001.

Further, it has also announced a special dividend of 20 per cent to commemorate 10 years of operations. These are, however, subject to approval of the shareholders.

The net profit is down primarily due to the Rs. 20-crore provision made in the final quarter for `extraordinary and non- recurring items'.

Mr. Kalpathi Suresh, chairman of the company, said the provision was made for the diminution in investment value of Netfinex.com India, a retail financial services network.

Other income amounted to Rs. 36.10 crores (Rs. 16.83 crores). Out of this, about Rs. 10.32 crores came through exchange rate difference.

Total expenditure has risen to Rs. 309.27 crores (Rs. 126.37 crores). Interest charges claimed Rs. 6.79 crores (Rs. 3.52 crores). The company has made a provision of Rs. 32.36 crores (Rs. 14.91 crores) towards depreciation.

The profit before tax is Rs. 98.19 crores (Rs. 69.55 crores). The provision for taxation is Rs. 19.61 crores (Rs.12.61 crores). The provision for income tax is for a 15-month period from April 2000 to June 2001. In the preceding year tax provision was made for the period between April 1999 and March 2000, says a company release.

Reserves (excluding revaluation reserves) were Rs. 812.42 crores (Rs. 576.43 crores).

The education segment of the SSI business has contributed about Rs. 230.70 crores to the total revenue. The operating margin from this business is around 22.2 per cent.

According to Mr. Suresh, SSI will, over time, adopt a largely franchisee-based strategy in the education field. This could bring down fixed cost and also insulate somewhat margins in a `dipping business' scenario.

The technology division has contributed around Rs. 162.65 crores to the total revenue. This division has managed to clock an operating margin of 30.7 per cent.

The industry slowdown has seen the number of employees in SSI Education come down to 1533 from 1718 in the third quarter of the just ended year. Likewise, SSI Technology has also seen a drop in number of employees to 712 from 855.

Mr. Suresh said `Things have bottomed out in July' on the education software training front. On the technology side, SSI, he said, would look for `mining existing accounts' and `engaging clients'.

According to the chairman, the U.S. operations of the company have been revamped into five regions with each assigned a top as well as bottomline targets.

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