Subex cuts FY08 products biz profit, rev outlook

MUMBAI (Reuters) - Telecoms software firm Subex Azure Ltd on Friday cut its products business net profit and revenue guidance for 2007/08 because a customer had postponed its capex commitments.

The company forecast the products business to post net profit of 1.04 billion rupees on revenues of 5.2 billion rupees for the year to March 2008, down from 1.55 billion rupees net profit and 6.15 billion rupees revenue forecast earlier.

Subex said it would not be able to book contracts from the customer in the third and fourth quarters of the year, because of the customer's decision to defer its commitments.

The products business accounted for 70 percent of the firm's revenue last year and is set to increase to 80 percent this year.

Subex would be able to limit the impact of the sharp fall in revenue on profit by managing its costs better, Managing Director and CEO, Subash Menon, said in a statement.

"By adopting prudent cost management measures, we have ensured that a reduction of 950 million rupees in revenue will result in only 510 million rupees reduction in net profit," he said.

Syndesis, which Subex acquired in January 2007, will contribute to its earnings in the current fiscal year, the statement said.

With the integration of Syndesis, the operating profit of products business will rise 43 percent this year, it said.

Ahead of the announcement shares in the company closed down nearly 3 percent at 509.60 rupees in the Mumbai market.