WNS (Holdings) Ltd on Thursday reported a marginal increase in net profit at $31 million for October-December quarter of the ongoing financial year. The company had posted a net profit of $30.9 million in the year-ago quarter.
Revenue declined 0.3 per cent year-on-year to $238.4 million during October-December quarter, but rose 4.7 per cent sequentially.
"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. These headwinds more than offset the year-over-year revenue growth driven by new client additions, the expansion of existing relationships, and currency movements net of hedging," the company said in a release.
It attributed the sequential rise in revenue to broad-based revenue growth across verticals, services and geographies, and currency movements net of hedging.
"Year-over-year, profit improvement was the result of reductions in travel, facility-related and discretionary expenditures, favourable currency movements net of hedging, and lower amortization of intangible expense. These benefits more than offset headwinds from the COVID-19 pandemic including revenue reductions and increased business continuity costs," it added.
Besides, the company recorded a higher effective tax rate versus last year, driven by the geographic mix of profit.
The COVID-19 pandemic continues to have a significant impact on the company's performance, and WNS is actively working to manage clients' changing requirements, adapt service delivery models, ensure data security, and manage costs. "Going forward, impacts to our financial performance will be a function of how long the COVID-19 pandemic lasts on a global basis, and how long it takes our clients' businesses to stabilize and recover," it said.
The business process management (BPM) company's revenue less repair payments declined 1.6 per cent to $224.5 million in October-December. It updated its revenue less repair payments guidance for fiscal year ending March 2021 to between $860 million to $870 million from $896.2 million in fiscal 2020.
"Our guidance for the full year reflects a reduction in revenue less repair payments of -4% to -3% on both a reported and constant currency basis. We currently have over 99% visibility to the midpoint of the range, consistent with January guidance in previous years," WNS Chief Financial Officer Sanjay Puria said.
Its chief executive officer Keshav Murugesh said, "During the third quarter, we also 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."
WNS added nine new clients during October-December and expanded 14 existing relationships. Its global head count stood at 42,830 as of December 31, 2020.