OREANDA-NEWS. December 05, 2011. IBS Group Holding (IBSG:GR; IBSGq.DE), a leading IT services provider in Eastern Europe, announces its preliminary unaudited operating results for the second quarter (1 July – 30 September 2011) and first half (1 April – 30 September 2011) of the fiscal year 2011, reported the press-centre of IBS Group.

Highlights
Consolidated revenues for the second quarter of 2011 increased by 17.6% year-over-year to USD 179.9 million. For the first half of the fiscal year 2011 consolidated revenues increased by 25.3% year-over-year to USD 356.3 million.

Software Development segment revenues for the second quarter of 2011 increased by 37.4% year-over-year to USD 65.8 million. For the first half of the fiscal year 2011 consolidated revenues increased by 44.8% year-over-year to USD 127.3 million.

Share of revenues generated in Europe and North America in the first half of the fiscal year 2011 increased by 42.1% year-over-year to USD 123.6 million and reached 34.7% of consolidated total revenues.

Group headcount surpassed 8,000 employees as of the end of the second quarter of 2011.

IBS Group upgrades its guidance for consolidated revenue for the 2011 fiscal year ending 31 March 2012 to USD 835 million - USD 850 million, up from the previous guidance of USD 805 million - USD 820 million based on current market trends and business visibility.

Consolidated revenues for the second quarter of the fiscal year 2011 increased by 17.6% year-over-year (y-o-y) to USD 179.9 million, driven primarily by strong growth in the Software Development segment. Consolidated revenues for the first half of the fiscal year 2011 increased 25.3% y-o-y to USD 356.3 million.

IT Services segment (IBS IT Services) demonstrated a 9.8% y-o-y revenue growth in the second quarter of the fiscal year 2011, supported by its broad customer base and project pipeline as well as by on-going growth in demand for IT services in Russia. Segment revenues for the first half of the fiscal year 2011 increased by 20.3% y-o-y.

Software Development segment (Luxoft) demonstrated a 37.4% y-o-y revenue growth in the second quarter the fiscal year 2011, driven by the continued strong global demand for sophisticated software engineering and its focus on the fastest growing IT market segments: application outsourcing and custom application development. Segment revenues for the first half of the fiscal year 2011 increased by 44.8% y-o-y.

During the first half of the fiscal year 2011 IBS Group’s share of international revenues increased to 34.7% of consolidated total from 30.6% in the first half of the fiscal year 2010 - a reflection of continued diversification of the Group’s business and strong growth in the Software Development segment, which is primarily focused on international client base.

The share of revenues generated in Europe reached 25.2% of consolidated total in the first half of the fiscal year 2011 compared to 20.1% in the first half of the fiscal year 2010 reflecting, among other factors, success of expansion strategy among Western European accounts over the past year. Revenues from Europe reached USD 89.7 million in the first half of the fiscal year 2011, a 56.8% y-o-y increase.

The share of revenues generated in North America reached 9.5% of consolidated total in the first half of the fiscal year 2011 compared to 10.5% in the first half of the fiscal year 2010, with revenues in the region remaining stable in absolute terms y-o-y.

The share of revenues generated in Russia and the CIS reached 65.3% of consolidated total in the first half of the fiscal year 2011 compared to 69.4% in the first half of the fiscal year 2010. Revenues from Russia and the CIS reached USD 232.7 million in the first half of the fiscal year 2011, a 17.9% y-o-y increase.

As of 30 September 2011, the headcount of IBS Group exceeded the 8,000 employee milestone for the first time in the Company’s history and has reached 8,062 employees, a 19.1% increase y-o-y. During the second quarter of 2011, IBS Group had a net personnel increase of 431 employees, a 5.6% gain compared to its headcount at the end of first quarter of the fiscal year 2011. Headcount growth was associated primarily with rapid expansion of the Software Development segment, which continued to actively hire personnel in most of its regional development centres.

IBS Group uses debt instruments primarily to finance working capital requirements stemming from the seasonal fluctuation of revenues and receivables in the IT Services segment. As of the end of the second quarter of the fiscal year 2011, total debt stood at USD 71.7 million, a decrease of USD 7.7 million, or 9.7%, y-o-y. Net debt as of the end of the second quarter of the fiscal year 2011 stood at USD 53.0 million, up USD 0.8 million, or 1.5%, y-o-y and a marginal increase in the context of 25.3% consolidated y-o-y revenue growth during the first half of the fiscal year 2011.

Outlook
On the basis of current business visibility and overall positive market trends both in IT Services and Software Development segments, IBS Group upgrades its previous guidance for consolidated revenue for the 2011 fiscal year ending 31 March 2012 from the range of USD 805 million - USD 820 million to USD 835 million - USD 850 million, compared to USD 656 million in 2010 fiscal year. This forecast is subject to certain risks and the stated revenue goal assumes continued and growing demand for software and applications development outsourcing services, a continued recovery of the Russian IT services market, generally sound economic environment, and stable financial conditions.

Comment from President
Commenting on the results, President of IBS Group Anatoly Karachinsky said: “We continued to successfully execute our organic growth strategy in the first half of 2011 fiscal year, reporting strong results across major operational segments and geographical markets. In particular, the Software Development segment delivered 44.8% revenue growth year-over-year, with most of revenue growth coming from the new projects for the existing global client base.

At the same time, the continued trend towards virtualization and use of cloud technologies in the Russian IT space creates new growth opportunities for IBS IT Services, which in August 2011 was ranked for the fifth consecutive year as the largest Russian IT company by market share in the influential IDC survey. We are also proud that our achievements in innovation had been recognized by numerous recent industry awards, including the Frost & Sullivan 2011 European Telematics and Infotainment Competitive Strategy Innovation Award.

We are pleased to see the momentum building from our continued investment into delivery of innovative software engineering and business transformation solutions for our clients. Along with our continuous new customer wins, we believe we are building a solid foundation for future growth of our business in the coming years.”