WNS Q3 results: Net profit rises marginally to $31 mn

WNS Q3 results: Net profit rises marginally to $31 mn

Business process management (BPM) major WNS Holdings on Thursday reported a marginal rise in net profit at USD 31 million (around Rs 226 crore) for December 2020 quarter.

As per the general accounting standards, the company had registered a net profit of USD 30.9 million in the year-ago same period, WNS said in a statement.

The company’s revenues, however, declined marginally to USD 238.4 million in the quarter under review, from USD 239.2 million in the year-ago period, it added.

On a sequential basis, net profit was higher by 6.1 per cent from USD 29.2 million and revenue was up 7.1 per cent from USD 222.6 million in September 2020 quarter.

Year-on-year, profit improvement was the result of reductions in travel, facility-related and discretionary expenditures, favourable currency movements net of hedging, and lower amortisation of intangible expense, WNS said.

These benefits were higher than the headwinds from the COVID-19 pandemic including revenue reductions and increased business continuity costs, it added.

“In addition, the company recorded a higher effective tax rate versus last year, driven by the geographic mix of profit. Sequentially, Q3 profit increased as a result of revenue improvement, currency movements net of hedging, and a lower effective tax rate,” WNS said.

These benefits more than offset headwinds from the USD 4 million one-time reversal of corporate leave provision in the second quarter and increased share-based compensation expense in the third quarter, the statement said.

“Year-over-year, fiscal Q3 revenue was adversely impacted by the COVID-19 pandemic including lower volume requirements from certain clients and service delivery constraints resulting from the transition to a ‘work from home’ delivery model,” WNS said.

These headwinds more than offset the year-on-year revenue growth driven by new client additions, the expansion of existing relationships, and currency movements net of hedging, it added.

“Sequentially, revenue improvement was driven by broad-based revenue growth across verticals, services and geographies, and currency movements net of hedging,” the statement said.

WNS Chief Executive Officer Keshav Murugesh said during the third quarter, the company re-initiated global hiring in support of both signed new business and a healthy sales pipeline.

“Looking forward, while we continue to expect some COVID-related volatility in our business over the next few quarters, we believe the long-term BPM market opportunity continues to improve. Driven by disruption and the need for “hyperautomation”, clients are looking to WNS to help them transform their business models and improve competitive positioning,” he added.

WNS will continue to focus on superior execution and investing in the breadth and depth of its capabilities to ensure it delivers sustainable value to all of key stakeholders, he said.

WNS posted revenue less repair payments of USD 224.5 million, down 1.6 per cent from USD 228.2 million in the December 2019 quarter.

It now expects its revenue less repair payments to be between USD 860-870 million, down from USD 896.2 million in fiscal 2020. WNS added nine new clients in the quarter and expanded 14 existing client relationships.

Its global headcount stood at 42,830 as on December 31, 2020.

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