Kale records 31% growth in Revenue

January 24, 2005 - Kale Consultants Limited (Kale), the leading provider of software solutions and outsourced services to the Travel & Transportation industry, has recorded revenues of Rs. 163.80 million for the quarter ended December 31, 2005 a s compared to Rs. 124.67 million for the corresponding quarter of the previous year, a growth of 31 %.

The company recorded a PAT of Rs 13.87 million for this quarter as compared to Rs. 4.30 million for the corresponding quarter of the previous year, a substantial growth of 223%.

Revenue for the nine months ended December 31, 2005 , showed a growth of 31% to Rs. 457.06 million from Rs. 348.89 million. The PAT stood at Rs. 24.04 million, from Rs. 9.48 million, an impressive growth of 154%.

The improved margins are on account of Kale's Product led business model, wherein, costs corresponding to the incremental revenues grow at a lower rate, resulting in improved profitability. The dedicated investment towards the creation and enhancement of product solutions has started paying off.

Commenting on the performance, Mr. Vipul Jain, CEO & Managing Director said, “We continue to be on track in terms of revenue growth and margin expansion. Our solution offerings are finding good traction in the market-place and increasing margins are beginning to reflect our business model .”

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 . British Midland Airways, UK 's second largest carrier has signed a contract with Kale for the implementation of Revenue Accounting Solutions. Kale has initiated preparatory work for the execution of the order and expects a partial positive impact of this order on the revenue and profitability this fiscal.

Portugalia Airlines migrated from PRAXIS to a licensed REVERA™ customer in this quarter. Portugalia Airlines was the last PRAXIS customer and with this migration, PRAXIS is now a part of Kale's history. PRAXIS was introduced by Kale in 1994 and was the largest selling Revenue Accounting system in the open systems category in the late 1990's.

NFP Service:
Kale's NFP service recorded productivity as high as 95% owing to enhancements in APEX™, NFP engine from Kale. During this quarter, Kale's NFP service continued to be quite steady and further helped strengthening its position in the industry. Kale was invited to participate for a number of industry forums & F&F forums, such as Quality Control Group, technical user group, ICH (IATA Clearing House).

There is an increasing awareness among airlines, which are interested in AIA's First & Final billing service, and as such appreciate the superior functionality of APEX™. A few airlines are undergoing trials on APEX™ and we are expecting more and more carriers to select APEX™ as the NFP engine.

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

Cargo Solutions:
Kale is proud to announce its selection as an Industry Associate of Cargo 2000, an IATA Interest Group. This group brings together some 45 major airlines, freight forwarders and ground-handling agents with the goal of implementing a new quality management system for the worldwide air cargo industry.

The objective of this group is to implement processes, backed by quality standards that are measurable and supported by data, thereby improving the efficiency of air cargo, enhancing customer service levels and reducing operational costs. To enable these processes, airlines need fully supportive IT systems that meet the rigorous requirements laid out by Cargo 2000 group.

Managed Process Services (Kale MPS™):
Kale MPS™ continues to forge ahead with four new customers being added in this quarter.

longside Revenue Accounting Service, Revenue Recovery Protection Services offered by Kale MPS™ has also received a tremendous response from the market. For the new customers added, Kale MPS™ will carry out secondary interline audit, cargo audit, passenger sales audit and RBD audit services. These services will help airlines to prevent the loss of revenue significantly improving their profit margins.

Travel Services
Travel Technologies Solutions group continues to surge ahead. The head count and infrastructure is seeing a ramp up following extension of long term, multi-year contracts from existing customers. Solutions developed for ZUJI, a prominent online travel player in South East Asia and Australia has gone live. The group has also been certified by KPMG to be compliant with BS7799 standards, a widely recognised information security standard.

 

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 .