OREANDA-NEWS. March 02, 2012. IBS Group Holding Limited (IBSG:GR; IBSGq.DE), a leading IT services provider in Eastern Europe, announces its preliminary unaudited operating results for the third quarter (1 October – 31 December 2011) and nine months (1 April – 31 December 2011) of fiscal year 2011, reported the press-centre of IBS Group.

Highlights
Consolidated revenues for the third quarter of fiscal year (FY) 2011 increased by 26.3% year-over-year (y-o-y) to USD 277.3 million. For the nine months of the FY2011, consolidated revenues increased by 25.7% y-o-y to USD 633.5 million.

Revenues in the IT Services segment grew 30.8% y-o-y for the third quarter of FY2011 to USD 187.1 million. For the nine months of the FY2011, the segment’s revenues reached USD \\$384.6 million, an increase of 25.2% y-o-y.

Revenues in the Software Development segment grew 27.1% y-o-y for the third quarter of FY2011, to USD 71.2 million. For the nine months of FY2011, the segment’s revenues increased by 37.9% y-o-y to USD 198.5 million.

For the nine months of FY2011, the share of revenues generated in Europe and North America rose by 33.2% y-o-y to USD 189.3 million and reached 29.9% of the consolidated total revenues.

As of the end of the third quarter of FY2011, net debt amounted to USD 16.6 million, a material decrease of USD 16.7 million y-o-y that took place against the backdrop of 25.7% consolidated revenues growth over the same period.

The Group’s headcount continued to grow and reached 8,334 employees as of the end of the third quarter of FY2011.

Guidance for consolidated revenues for FY2011 (ending 31 March 2012) is reiterated at USD 835 million - USD 850 million.

For the third quarter of FY2011, consolidated revenues increased by 26.3% y-o-y to USD 277.3 million, driven by strong growth in both the Software Development segment and the IT Services segment.Consolidated revenues for the nine months of FY2011 increased 25.7% y-o-y to USD 633.5 million.

The IT Services segment (IBS IT Services) demonstrated a 30.8% y-o-y revenue growth in the third quarter of FY2011, driven by continued growth in demand for IT services in Russia as well as continued efforts to expand market share in strategic business lines. The segment’s revenues for the nine months of FY2011 increased by 25.2% y-o-y.

The Software Development segment (Luxoft) demonstrated a 27.1% y-o-y revenue growth in the third quarter of FY2011, which was driven by both existing and new customers. The segment’s revenues for the nine months of FY2011 increased by 37.9% y-o-y.

During the nine months of FY2011 IBS Group’s share of international revenues amounted to 29.9% of consolidated total, up from 28.2% in the nine months of FY2010. This was a result of continued diversification of the Group’s business and strong growth in the Software Development segment, which is primarily focused on international customer base.

The share of revenues generated in Europe increased to 21.3% of consolidated total in the nine months of FY2011 compared to 18.8% in the nine months of FY2010. This reflected, among other factors, a successful expansion strategy focused on Western European accounts over the past year. Revenues from Europe reached USD 135.1 million in the nine months of FY2011, an increase of 42.8% y-o-y.

The share of revenues generated in North America reached 8.6% of consolidated total in the nine months of FY2011, down from 9.4% in the nine months of FY2010. In absolute terms, however, the North American revenues increased by 14.1% y-o-y to USD 54.2 million in the nine months of FY2011 from USD 47.5 million in the nine months of FY2010.

The share of revenues generated in Russia and the CIS reached 70.1% of consolidated total in the nine months of FY2011 compared to 71.8% in the nine months of FY2010. Revenues from Russia and the CIS reached USD 444.2 million in the nine months of FY2011, an increase of 22.8% y-o-y.

IBS Group continues to adhere to its conservative financial policy, which has brought about a significant reduction in net debt in FY2011. As of the end of the third quarter of FY2011, total debt stood at USD 55.8 million, a decrease of USD 13.6 million or 19.6% y-o-y. As of the end of the third quarter of FY2011, the net debt amounted to USD 16.6 million, a material decrease of USD 16.7 million y o y that took place against the backdrop of 25.7% consolidated revenues growth over the same period. Compared to the end of the second quarter of FY2011, the net debt declined a significant USD 36.4 million or 68.7%, as seasonally strong cash flows of the third financial quarter were used to materially strengthen the balance sheet.

Outlook
Based on current market trends and conditions, IBS Group reiterates its guidance for consolidated revenues for the FY2011 (ending 31 March 2012) at USD 835 million - USD 850 million, compared to USD 656 million for FY2010. 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
Anatoly Karachinsky, President of IBS Group said, “We are very pleased with the performance of both our business segments for the third quarter of fiscal year 2011. Our Software Development business continued to grow rapidly, driven by expansion of existing client relationships and new business wins. In particular, we achieved strong progress for our clients in automotive, finance and telecommunications industries. At the same time our IT Services segment demonstrated very strong growth that reflected our successful efforts to expand our market share in strategic lines of business, such as industrial and financial sectors, as well as the on-going expansion of the domestic IT services market. Notably, the IT Services segment achieved substantial revenue growth while keeping its headcount largely unchanged, thus reflecting increased productivity and utilisation levels. Finally, we significantly improved our financial position, reducing net debt to just \\$16.6 million and increasing our cash position to \\$39.2 million as of the end of 2011. Continued growth in demand for sophisticated IT services in Russia and globally, as well as our strong financial position, make us reasonably optimistic about IBS Group’s business outlook for 2012.”