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S Mobility* reported declined revenues of Rs 445.5 crore for the quarter ending June 30, 2013 (Q4-FY13), down 12.9% from Rs 511.6 crore in the same quarter last year but up 13% from Rs 394.3 crore revenues in the previous quarter. The company was however profitable at an operating level: a net profit of Rs 9.91 crore in the quarter, as compared to Rs 5.13 crore loss in the same quarter last year and Rs 2.18 crore profit in the previous quarter.

For the fiscal ending June 30, 2013 (FY13), S Mobility posted total revenues of Rs 1,869.94 crore and a net profit of Rs 5.48 crore. Note that S Mobility had extended its financial year to 15 months in the previous fiscal and hence cannot be compared to the current fiscal which accounts for only 12 months. In the previous fiscal FY12, S Mobility had reported revenues of Rs 2,738.03 crore and a net loss of Rs 9.70 crore.

Mobile Devices Reports Profit: S Mobility’s mobile devices segment registered a total revenue of Rs 382.9 crore for the quarter, down 18.5% from Rs 453.9 crore in the same quarter last year. The segment however reported a profit: a profit before tax of Rs 9.3 crore for the quarter as compared to Rs 14.86 crore loss in the same quarter last year and Rs 5.43 crore loss in the previous quarter. The segment has reported profit after six straight loss quarters. It had last reported profit in Q2-FY12, where it had reported profit of Rs 2.1 crore.

Mobile devices however continues to dominate S Mobility’s revenues and the segment now contributes for around 86% of S Mobility’s consolidated revenues for the quarter, down from 88.7% contribution in the same quarter last year.

The segment reported revenues of Rs 1,631.2 crore and a loss before tax of Rs 0.44 crore for the fiscal FY13. It had reported total revenues of Rs 2,448.7 crore and net loss of Rs 45.06 crore in the previous fiscal.

Services Sees Increased Profit: S Mobility’s services segment reported increased revenues of Rs 63.9 crore, up 10.6% from Rs 57.82 crore in the same quarter last year and up 8.5% Rs 58.9 crore in the previous quarter. The profit before tax also increased to Rs 9.28 crore for the quarter, up from Rs 6.27 crore profit in the same quarter last year and Rs 5.21 crore profit in the previous quarter. Services contribute for 14% of S Mobility’s consolidated revenues for the quarter, up from 11.3% contribution in the same quarter last year.

For the fiscal FY13, the Services segment reported revenues of Rs 240.2 crore and a loss before tax of Rs 0.11 crore, whereas it had reported revenues of Rs 289.68 crore and a profit before tax of Rs 25.17 crore in the 15 month ended FY12.

Share Buyback: In June 2013, the company board had approved a buyback of fully paid equity shares, having a face value of Rs 3, from the open market through stock exchange mechanism. The company started the buyback on July 10, 2013 and has bought 38.17 lakh shares (38,17,037 shares) until now, of which 38.04 lakh shares (38,04,416 shares) has been extinguished till date.

Highlights

– In June 2013, S Mobility decided to close down its two handset manufacturing units, both in Baddi in Himachal Pradesh, India. Both units used to manufacture feature phones. S Mobility will instead focus entirely on contract manufacturing and distribution of handsets.

– S Mobility has also decided to transfer its mobile handset business to Spice Retail Ltd, a wholly owned subsidiary of the company, by way of a slump sale with effect from July 1, 2013. Accordingly, it has entered into a business transfer agreement with Spice Retail Ltd.

– In July 2013, Spice launched a cloud-based backup service called ‘Spice Cloud‘ for its Android based smartphones and tablets.

– Google had partnered with Spice Global in June 2013, to set up Android Nation retail stores in various Indian cities, starting with New Delhi later this year.

– Spice Digital had partnered IRCTC to launch a B2B travel and tourism solution called Spice Safar for travel agents, as a part of Spice’s retail initiatives.

– In April 2013, Spice Digital had rolled out an audio blogging service Voice Tube in Bangladesh. The service was initially available on telecom operator Robi (an Axiata company) and it was expected to be rolled out on Airtel Bangladesh as well. Its not clear if the company has rolled the service to Airtel Bangladesh.

– Spice Global had also invested an undisclosed amount in Formation 8, a Silicon Valley based venture capital fund.

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*Disclosure: Spice Digital, a subsidiary of S Mobility is an advertiser with MediaNama