Kale records 24% growth in Revenue

October 25, 2005 - Kale Consultants Limited (Kale), the leading provider of software solutions and outsourced services to the Travel & Transportation industry, has recorded revenues of Rs. 154.60 million for the quarter ended September 30, 2005 as compared to Rs. 124.24 million for the corresponding quarter of the previous year, a growth of 24%.

The company recorded a PAT of Rs 5.20 million for this quarter as compared to Rs. 3.58 million for the corresponding quarter of the previous year, a substantial growth of 45%.

Revenue for first half of current year showed a growth of 31% to Rs 293.26 million from Rs 224.22 million. The PAT stood at Rs 10.17 million, from Rs 5.17 million, an impressive growth of 97%.

On a serial quarter basis, Kale's revenue grew by 12%, having recorded revenue of Rs 138.66 million in Q1 F06. The PAT rose by 5% to Rs 5.20 million from Rs 4.97 million.

Commenting on the performance, Mr. Vipul Jain, CEO & Managing Director said, “In this quarter we have acquired new customers, extended relationships with our existing customers and developed a strong pipeline which looks very encouraging thereby ensuring sustained revenue growth going forward.”

Highlights for the Quarter ended September 30, 2005

PRA Solutions:
REVERA™, Kale's Revenue Accounting solution, has once again proved itself to be one of the world's most powerful PRA solutions. REVERA™ has been successfully implemented at Bangkok Airways this year. Additionally, this year, Air Mauritius also went live with Kale developed iDEALS™, the Online Deal Management System. Both have signed a five-year contract with Kale.

This quarter, Cebu Pacific, the “on time, great value” airline from Philippines also signed a five-year contract for REVERA™. Increased passenger volumes, ambitious growth plans and focus on more international traffic prompted the airline to select REVERA™ to manage the increasingly complex revenue accounting function.

NFP Service:
Kale's NFP service during this quarter has been quite steady and has helped Kale strengthen its position in the industry. It has had a direct and positive impact on the business - the number of airlines signing for this service resulting in increase in revenue for the company.

In this quarter Air Canada has singed up for Kale's NFP service in addition to the existing 5 airlines (comprising 3 of the top 10 airlines globally). Several other carriers have shown interest and few are already undergoing trials. During the forthcoming quarter we expect more carriers to sign up.

With NFP service, Kale has also managed to capitalize on its superior product development and deployment expertise to gain repeat as well as corollary business from its clients.

Cargo Solutions:
Implementation for Indian Airlines, one of the largest regional airlines in Asia that signed a five-year contract with the company for CSP™- the Enterprise-Wide Cargo Solution is on schedule. This contract is for the complete suite of CSP™ solutions, provided on a hosted basis across 63 domestic and international stations of the airline. To offer a complete solution, Kale will also provide and maintain hardware at 10 Indian Airlines stations.

This is an important milestone for Kale as it marks the launch of CSP™ Rel 2.0 on a hosted basis.

Managed Process Services (Kale MPS™):
Revenues from the long term, multi-year contracts from Kale MPS™ grew by 38% to Rs. 123.50 million over the corresponding half year of the previous year.

Cabo Verde migrated from PRAXIS to a licensed REVERA™ customer early this year. As a value added service, Kale MPS™ will offer outsourced revenue accounting services to Cabo Verde for its past one year data. This is one of Kale's initiatives to simplify ease of migration for its customers.

Travel Services
This quarter Kale has strengthened relationships with its travel customers resulting in increased volumes. Kale has renewed the contract with Lastminute.com, one of the leading online travel & leisure company.

Kale has also successfully developed, implemented and integrated new systems for Zuji in Singapore.

Other Highlights
“Simplify the Business (StB)” is worldwide strategic initiative driven by IATA. To support this initiative and to facilitate airlines in meeting StB goals, IATA has chosen a select few organizations as StB preferred partners. Kale is the only Indian company to be selected for this coveted partnership. This will position Kale as a key facilitator for the airlines, in their efforts to implement the StB projects initiated by IATA.

Kale Softech Inc., a subsidiary of the company, is now a member of the IATA Clearing House (ICH); a positive move for smoother and faster invoice settlement for all customers. This will enable the company to improve its collection cycle

Viral Raval , Vice – President, IT, Kale was short listed as one of the top three nominees for the SecureSynergy Security Strategist Awards 2005 in the IT/ITES category

Kale was re-certified under ISO 9001:2000 (International Organization for Standardization). In addition to this certificate, Kale is also BS 7799 Part 2 certified. BS 7799 (British Standard for Information Security) is an internationally recognized generic information security standard intended to serve as a single reference point for identifying a range of controls needed for most situations where information systems are used.

Investor Relations
Kale Consultants Ltd is committed to create long-term sustainable shareholder value through successful implementation of its growth plans. The company's investor relations mission is to maintain an ongoing awareness of its performance among shareholders and financial community.

 

For additional information, please contact:

Mr. Sumeet Nadkar
Chief Financial Officer
Kale Consultants Ltd.
Tel: 91-22-28272500
Email: Sumeet_Nadkar@kaleconsultants.com

 

Safe Harbor

Certain statements in this release concerning our future growth prospects are forward-looking statements which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.