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Our Bureau

New Delhi, July 21

Nucleus Software Exports has posted a 43 per cent drop in the consolidated net profit for first quarter ended June 2008 to Rs 8.03 crore, on the back of a 12 per cent decline in EBITDA (earnings before interest, taxes, depreciation and amortisation) and foreign currency losses.

The consolidated EBITDA declined by 12 per cent to Rs 14.19 crore, with total expense rising 36 per cent. After accounting for foreign currency loss of Rs 7.48 crore primarily on account of Mark to Market losses on dollar rupee options, the consolidated profit after tax (PAT) is 43 per cent lower than recorded in the corresponding quarter of the previous year.

Commenting on the dip in EBITDA, Mr Vishnu R. Dusad, CEO and Managing Director, Nucleus Software, said, “This is owing to a delay in the start of certain order executions. In addition, performance appraisal cycle for the company is April and Rs 4 crore addition to cost has also happened at the same time.”

He said the company currently has hedges to the tune of $50 million. “The strategy for us is that we will continue hedging for 50 per cent of the next three years’ revenue,” Mr Dusad said.

Nucleus’ consolidated revenue at Rs 82.90 crore from software products and software development services was up 24 per cent in comparison to Rs 66.66 crore for the corresponding quarter of the previous year. Its product business revenue at Rs.57.26 crore rose by 30 per cent in comparison to the year ago period, while the projects and services business revenue for the quarter at Rs 25.64 crore increased by14 per cent over the previous year.

Earning per share (EPS) for the quarter decreased to Rs 2.48 from Rs 4.34 as compared to corresponding quarter of the previous year.

In a statement issued here, Mr Dusad said, “Nucleus is a product company and product companies’ revenues by definition have to be looked at with a long term perspective as they do depend on the timing of booking of new orders and the start date for implementation. While our markets are not affected significantly by the prevailing economic conditions, we have observed delays in conclusion of order negotiations.”

“We believe that quarterly figures do not truly represent the long-term potential of the company and that with our constant efforts to deliver quality and price performance, we will continue to grow both revenue and profits in the medium term,” he pointed out.

Nucleus bagged orders from six new customers for implementing 27 product modules in the first quarter of 2008-2009. Product orders were bagged from leading financial institutions in Africa, India, China and West Asia. During the quarter, nine product modules went live in various markets.

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