Business process management (BPM) major WNS Holdings on Thursday posted a marginal dip in net profit to USD 29.5 million for March quarter, and said it is temporarily suspending its annual guidance due to volatility and lack of visibility amid COVID-19 outbreak.
As per the general accounting standards, the company had registered a net profit of USD 29.7 million in the same quarter last year.
Its revenues grew by 18 cent to USD 248.3 million in the March 2020 quarter from USD 210.5 million in the year-ago period, WNS said in a statement.
WNS Chief Financial Officer Sanjay Puria said based on the volatility and lack of visibility stemming from the COVID-19 pandemic and the associated impacts on WNS and its clients' businesses, the company has temporarily suspended its annual guidance.
"WNS will continue to monitor the COVID-19 situation and plans to resume guidance when visibility improves," he said adding that the company is in a strong financial position with USD 269 million in net cash, USD 64 million in unused lines of credit, and a business model with low capital requirements and operating cost flexibility.
IT firms like Wipro and Infosys have also suspended their practice of offering revenue growth forecast, while Cognizant had retracted its annual outlook for 2020.
WNS Chief Executive Officer Keshav Murugesh said while the company closed the year with a solid fourth quarter and full-year performance, it enters fiscal FY21 in a "challenging, uncertain, and rapidly changing environment".
He added that the company is focused on ensuring the health and safety of its over 44,000 global employees and on servicing the needs of clients in this difficult time.
WNS said the COVID-19 pandemic is having a significant impact on its clients' businesses, and on its operations, financials, and visibility.
"Revenue is currently being pressured by declining client volumes, delays in new business ramps, and regional lockdowns which impact service delivery. In addition, we are also receiving client requests for price reductions, discounts, and extended payment terms," it noted adding that the company is actively working to understand its client's changing requirements, adapt delivery to a 'work from home' model, ensure data security, prioritise critical processes, adjust service levels, and manage costs.
WNS said it is now able to deliver over 80 per cent of its client's current requirements, with ongoing improvement expected over the next few months, and the "adverse impact of COVID-19 on fiscal Q4 2020 financials was limited to a ramp-down in the second half of March".
WNS expects a "much greater financial and operational impact" in the first quarter of 2020-21 and potentially subsequent quarters. The magnitude of the impact to the first quarter and 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 for client's businesses to stabilise and recover, WNS noted.
"While we understand that our financial performance in fiscal 2020-21 will be impacted by the COVID-19 pandemic, our goal is to manage what is within our control, continue to invest and innovate, and remain focused on the long-term BPM opportunity. WNS firmly believes that when this pandemic is behind us, we will return to a healthy environment for BPM services," Murugesh said.
WNS posted revenue less repair payments of USD 235.8 million in March quarter, up 14.1 per cent from USD 206.6 million in the year-ago period.
In 2011-12, WNS re-negotiated contracts with certain clients and repair centres in the auto claims business, whereby the primary responsibility for providing the services is borne by the repair centres instead of WNS.
Its global headcount stood at of 44,292 as of March 31, 2020.
For 2019-20, WNS' net profit was up 10.8 per cent at USD 116.8 million, while revenue grew 14.7 per cent to USD 928.3 million from the previous fiscal.
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