Subex Q1 net falls 53% on accounting change

By agencies   |   Friday, 28 July 2006, 07:00 Hrs
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MUMBAI: Telecom software company, Subex Ltd. had acquired U.K based Azure Solutions in April. Due to a change in the accounting policy after the acquisition, the company Subex Azure Ltd. posted a 53 percent fall in net profit for the June quarter.

Subex shares were down 4.5 percent to Rs 382 in a firm Mumbai market.

"We are realigning our accounting policies worldwide and that is why our profits have taken a hit. We will be back on track again in the third and fourth quarters," Subash Menon, the Chairman and Managing Director, told after the results were declared on Thursday.

In April, the company had expectations of a net profit of Rs 650 million, on product revenues of 2.4 billion rupees, for the year ending March 2007.

For the June quarter, Subex has reported a net profit of Rs 40.28 million on
total sales of Rs 434.47 million, which is a marginal increase from a year ago.

Menon informed that Subex received orders worth $6.5 million and was expecting further orders worth $160 million, as result of the acquisition.

"This is an indication of the integration working well," he said. "The positioning and stature we have gained with the acquisition will get us larger and better deals."

Menon even showed a positive picture of the future of Subex. He added, in the next two years Subex expected the deal sizes to increase by 30 to 40 percent from its current levels.

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