FOUR SOFT LTD
INVESTOR UPDATE
H1 – FY 2009
www.four-soft.com
FOUR SOFT LTD
CEO’s Note
We at Four Soft believe that ‘In Adversity lies Opportunity’.
These are turbulent times across the globe and India is no
exception. In the US, businesses are going bust and stock prices
are plummeting worldwide.
It pleases us to inform you that amidst all this turbulence, we have
moved on and successfully completed the integration efforts with
our acquired entities, which have started fructifying into business
traction. The company is now equipped with a basket of legacy
products which offer stable revenues while its e-Products are
poised to drive scalability.
Being a Software Products company, Four Soft’s products find
usage in the logistics and supply chain domain, primarily linked
to Third Party Logistics (3PL) and the manufacturing industry. As
a result of the economic slowdown these companies will be
looking at cost rationalization on a priority basis to boost
profitability, given that revenues maybe difficult to garner against
the backdrop of the slackening demand. Hence, Four Soft will
actually benefit from this phenomenon as its products enhance
operational efficiency and reduce supply-chain costs for its clients.
With a view to keeping our stakeholders well informed of the
progress of the company, we are now going beyond our statutory
mandate of providing you with a Management Discussion &
Analysis (MDA) once a year ( in the Annual Report ).
Instead, in keeping with our commitment to transparency and
good corporate governance, we will be providing a Half Yearly
Investor Update Note (on the lines of a MDA) that not only
provides a better insight into the key numbers posted, but also
details the key developments during the six months under review.
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FOUR SOFT LTD
The highlights of the first half of the year include new business in
India, Japan, Thailand and Europe. We are looking forward to
important eTrans, our Web-centric application for Freight
Forwarding companies, implementations going live in USA,
Canada, Thailand and India in the next quarter. The eCustoms
product, the first global customs software on J2EE covering the
customs brokerage, from us has now been certified in USA,
Europe and India.
In the next half we will continue to focus on consolidation of our
existing business as well as procurement of new business.
Signed
Rajshekhar Roy
Chief Executive Officer
www.four-soft.com
FOUR SOFT LTD
Financial Highlights (consolidated)
Rs. million
Particulars
Income from Operations
Other Income
Total Income
Total Expenditure
Staff Cost
Exchange Difference Loss/(Gain)
Other Expenditure
EBITDA
Depreciation
EBIT
Interest
Profit Before Tax
Taxes
Profit after Tax
EPS (Basic)
EPS (Diluted)
6 months (H1)
Sep-08
Sep-07
1034.5
889.0
76.9
7.1
1111.4
896.1
446.2
-9.7
213.7
461.3
19.5
441.7
23.4
418.4
100.7
317.7
571.8
20.6
199.0
104.7
21.4
83.3
21.8
61.5
18.8
42.7
8.3
8.2
1.1
1.1
Notes pertaining to the Financials:
REVENUES :
Four Soft’s Net Sales stood at Rs 1034.5 million for the first half of Financial
Year 2009, up by 16%. During Q1 FY09 the company witnessed a significant
jump in revenues with a unique transaction involving sale of customer-specific
legacy software solution to an existing customer on non- exclusive basis.
Four Soft, as a result realized huge cash. Although this income is a part of the
core business, it may not be sustainable over other quarters. However it must
be noted that the part of the cash has been used to repay debts, which will reduce the
annual interest outgo by around Rs.10 million and this will directly benefit the
company’s profitability at the net level.
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FOUR SOFT LTD
EARNINGS BEFORE INTEREST TAX & DEPRECIATION
The EBITDA stood at Rs 461.3 million account of the unique transaction
besides the serious cost cutting measures undertaken by the company.
The company’s UK presence reflects in its relatively high staff costs. The
company has undertaken initiatives to rationalize the same and this is evident
in the reduction in expenses to sales ratios.
CURRENCY EXPOSURE:
The multi location presence of Four Soft results in multi currency operations
thus giving it a natural hedge against sharp currency movements. It receives
and incurs the majority of its revenue and expenses in local currencies (GBP
for United Kingdom, Euros for Netherland, DKK for Denmark, AUD for
Australia, SGD for Singapore and USD for North America) except for the
development and implementation costs in India which is incurred in INR. For
this, the revenues are earned from subsidiaries in USD and the strengthening
of USD against INR, has resulted in positive cash flow for Four Soft. The same
is reflected on the Expenditure side as Net Exchange Difference.
PROFIT AFTER TAX
The PAT figure at Rs. 317.7 million was on account of the good performance
at the operating level.
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FOUR SOFT LTD
Business Highlights
During the First Half of the Financial Year 2009, Four Soft added 8
new clients.
4S Product
Client Details
Aries Global Logistics,US
4S ePOMS
New York based
International Freight
Forwarder/NVO and
Customs-House broker
Colvan Netherlands BV
4S eTrans
UK based international
freight forwarding company.
Liege Handling
Services,Belgium
4S eTrans SME
Ramp and warehouse
handler at the airport of
Liege, Belgium
Deal
AGL will be able to execute,
track, and manage the
purchase orders of its clients
for continuous shipment
visibility and supply chain
partner collaboration.
Better visibility of shipments
across the supply-chain, time
reduction in executing a
shipment
Single user interface for all
employees to access and
share its operational and
financial supply-chain
information, and
consolidation of its multimodal operations.
A Petrochemical company
4S eTrans
A Fortune 500 company,
largest Petro company based
in Thailand is expanding into
downstream business to
distribute both in domestic
market and international
markets
4S will support the client’s
trucking business
Writer Corporation,India
4S eTrans
A leading multi services
corporate solutions provider
based in India.
www.four-soft.com
Visibility over Multiple
locations.
FOUR SOFT LTD
NorCargo Thermo,Norway
4S axsFreight
Primarily into exporting fish
and importing vegetable /
fruits out of Norway
AFL Dachser,India
4S eTrans
One of India's biggest freight
forwarder
The implementation counts
140 users and is scheduled to
go live in Norway by 1st of
Feb 2009 and then in
Holland and France
4S will support its air and
sea business across multiple
locations in India
Senko Logistics,Japan
4S VisiLog
One of the largest logistics
companies in Japan, located
in 297 locations with
multiple warehouses across
Japan
Support global logistics
platform and OMS between
their multiple shippers
Existing Client Updates
Leading global Freight forwarding company headquarterd in US,has gone live on 4S etrans in two countries.
Cargo Masters BV , an international freight forwarding company has been using 4S eTrans
SME Air, but will now add Ocean across their locations in Netherlands
Ontime Worldwide Express has implemented 4S eTrans SME Air in their Schiphol (NL)
office
MP Holland BV has implemented 4S eTrans SME Air in their Zaventem (BE) and Schiphol
(NL) office.
Carmichael, a freight forwarding and customs brokerage service providers has signed up for
e-214 add-on module.
UTi, a global integrated logistics provider, signed up for e-214 add-on module.
Rohlig,Poland, signed for the 4S eTrans SME Air module. Herfurth Aircargo - division of
Akomar Shipping bv is now using the Air module
Adelantex , Belgium has signed for 4S eCustoms PLDA module in combination with 4S
eTrans SME.
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FOUR SOFT LTD
Key Events & Marketing Initiatives
•
Four Soft, USA has joined The Florida Customs Brokers & Forwarders
Association (FCBF) as a trustee member in October 2008. The FCBF, Inc was
founded in 1960 by a handful of Miami brokers & forwarders and has grown
into an active representative body of the Florida freight forwarding and
customs brokerage community.
It has strong influence in policy making at federal level on imports and
exports, given their geographic advantage in the cross-border commercial
operations with Latin America. This membership provides Four Soft with an
opportunity to show case its basket of offerings whenever a member wants to
consider an IT solution to manage their Transport or Customs operations. It
would also keep Four Soft abreast with the changing customs regulations and
equip it with a good insight into the business practices to suitably modify its
service applications.
•
Senko group, which has signed Four Soft for 4S VisiLog intends to be its
marketing partner to sell the products and services for external clients. Four
Soft conducted a successful training for the customer for analyzing the
product’s ability to suit their business operations, and their future expansion.
This has enhanced the company’s prospects in the Japanese markets.
•
Four Soft has undertaken a Brand building exercise at the International
Federation of Freight Forwarders Associations in Canada where it has
generated some active leads.
www.four-soft.com
FOUR SOFT LTD
About Four Soft
Headquartered in Hyderabad, Four Soft is an enterprise solutions company
offering Logistics and Transportation Software Products. A 100% Export
Oriented Unit under the Software Technology Park scheme of GOI, the company
has 300 customers with 50,000 plus users in across 120 countries. To support the
same it has 10 development centres across the globe and its clients include
leading freight forwarders, NVOCCs, customs brokers, container freight stations,
ships agents, warehouses, cartage, trucking and Third and Fourth Party Logistics
Providers. The company is ISO 9001: 2000 certified with CMMi level 5 initiative.
It is listed on NSE as well as BSE
52 Week High / Low – Rs. 62 / Rs. 11
Contact Person
Mr.Prakash Lohia, GM - Finance
Email ID: [email protected]
Contact Numbers: (040) 2310 0600 / 601
URL: www.four-soft.com
Disclaimer:
Statements made in this Investor Update Note describing the Company’s
objectives, projections, estimate, expectations may be “Forward-looking
statements” within the meaning of applicable securities laws & regulations.
Actual results could differ from those expressed or implied. Important factors
that could make a difference to the Company’s operations include economic
conditions affecting demand supply and price conditions in the domestic &
overseas markets in which the company operates, changes in the government
regulations, tax laws & other statutes & other incidental factors.
www.four-soft.com