Business process management major WNS Holdings on Thursday posted a 1.7 percent rise in net profit to USD 29.2 million for the September quarter.
As per the general accounting standards, the company had registered a net profit of USD 28.7 million in the same quarter last year. Its revenues, however, declined 1.6 percent to USD 222.6 million in the September 2020 quarter, from USD 226.2 million in the year-ago period, WNS said in a statement.
Year-over-year, profit improvement was the result of lower share-based compensation expense, a one-time reversal of corporate leave provision, reductions in travel, facility-related and discretionary expenditures, and favourable currency movements net of hedging, it added.
The leave provision reversal contributed USD 4 million to the second quarter's pre-tax profit, and was the result of a policy change which removed employees' ability to carry forward unused leave for fiscal 2021, it added. "These benefits more than offset headwinds from the COVID-19 pandemic including revenue reductions, employee carrying costs, and increased business continuity costs. In addition, the company recorded a higher effective tax rate versus last year, driven by the geographic mix of profit," it said.
On COVID-19, WNS said the pandemic is having a significant impact on its clients' businesses and on its operations, financials, and visibility.
Revenue continues to be pressured by lower client volumes, delays in new business ramps, client concessions, and facility lockdowns which impact service delivery, it noted.
It added that the company is now able to deliver 98 percent of its clients' current requirements as compared to 95 percent as reported on July 16, 2020.
Impacts to its full-year financial performance will be a function of how long the COVID-19 pandemic lasts on a global basis, and how long it takes clients' businesses to stabilise and recover, it said.
"In the fiscal second quarter, WNS made solid progress growing our top line, adjusting our cost structure, and ensuring our ability to service clients' requirements in a difficult business environment," WNS Chief Executive Officer Keshav Murugesh said. He added that as a result, WNS was able to post solid sequential revenue growth and healthy margins and that visibility has now improved to the point where the company is comfortable providing annual guidance.
Looking forward, while we are seeing some delays in converting larger signed deals into revenue, we are pleased with the overall health of the sales pipeline including new opportunity additions, progress of deals through the pipeline, and contract signings for both new logos and existing client expansions," he said.
WNS posted revenue less repair payments of USD 214.4 million, down 2.9 percent from USD 220.7 million in the September quarter last year. It now expects its revenue less repair payments to be between USD 830 million and USD 854 million, down from USD 896 million in fiscal 2020.
Its global headcount stood at 41,466 as of September 30, 2020. WNS ended the second quarter with USD 366.5 million in cash and investments and USD 25.1 million of debt.